8M Real Estate paying S$70.4m in latest shophouse purchase

Singapore

A SLEW of commercial property deals have been sealed recently, including four adjoining conservation shophouses along South Bridge Road and another three along Tanjong Pagar Road bought for a total of S$70.35 million by 8M Real Estate.

In the Kampong Glam Historic District, 38 Sultan Gate is being sold for S$35.5 million by an entity linked to Tan Koo Chuan, the founder of Yi Kai Development; the buyer is a Singapore-incorporated company that is fully owned by Huang Zhichao, a citizen of Cyprus.

In the industrial property segment, Luxasia Group has entered a deal to sell its namesake building at 12 Tai Seng Street for S$66.42 million.

The cosmetics and beauty brand retailer, distributor and e-commerce company is expected to lease back the premises from the buyer, which is believed to be an entity connected to PGIM Real Estate.

The deal is subject to approval from JTC Corp, among other conditions. Luxasia Building is on an 85,577 square foot site with a 30-year leasehold tenure from June 2007, with an option to renew for a further 30-year term.

In the Kampong Glam area, 38 Sultan Gate, a standalone freehold shophouse block comprising an existing two-storey building with five units, is being spruced up.

The refurbishment will include a new roof over the outdoor refreshment area. The property is on a single land lot of about 7,400 sq ft.

Mr Huang, the buyer, is understood to hold multiple citizenships, including those of Cyprus and Vanuatu.

Earlier this year, he purchased the triplex super penthouse at the freehold Boulevard Vue for S$52 million, which translates to S$4,686 per square foot on the strata area of 11,098 sq ft (including 1,238 sq ft of strata void).

That was the final unit to be sold in the 28-unit project by its developer, Far East Organization.

In the Chinatown Historic District, 8M Real Estate is purchasing 265, 267, 269 and 271 South Bridge Road for S$54 million from Eu Realty (Singapore), a subsidiary of Eu Yan Sang International.

The four shophouses have a combined land area of 6,262 sq ft with a 999-year leasehold tenure, but the sale to 8M Real Estate is on a 199-year leasehold land tenure.

JLL, the property's exclusive marketing agent, brokered the deal through an expression of interest exercise that closed in late August.

The four shophouses have three storeys adding up to a gross floor area of 19,885 sq ft; there is also a 2,562 sq ft open terrace on the fourth floor overlooking the Chinatown district.

The ground level of Nos 267, 269 and 271 is where the iconic flagship store of Eu Yan Sang (Singapore), another unit of Eu Yan Sang International, is located.

Boutique hostel Adler used to occupy the whole of No 265 but has vacated the building ahead of its lease expiry soon.

Other tenants in the property include 5footway.inn and a law firm.

When contacted by BT, Ashish Manchharam, founder and CEO of 8M Real Estate, said the group is currently in talks to find a replacement tenant for the space vacated by Adler Hostel. "We are looking at the potential opportunities for this asset but in all likelihood, we'll renovate the property when all the leases expire in slightly more than a year's time, in early 2021.

"This will be well timed for the expected opening of the nearby Maxwell MRT station on the Thomson-East Coast Line ," said Mr Manchharam.

Also located a stone's throw from the upcoming Maxwell station are the three adjoining shophouses - 34, 36 and 38 Tanjong Pagar Road which 8M Real Estate is buying for S$16.35 million from Arcc Holdings, controlled by Tony Chen.

The two-and-a-half storey shophouses are on land with a 99-year leasehold tenure starting from February 2000, leaving a balance lease term of about 79 years.

The acquisition expands 8M Real Estate's presence in the Tanjong Pagar shophouse locale.

It has also boosted the value of the group's property portfolio to more than S$800 million. This comprises mostly shophouses, but also three commercial buildings and a strata retail block at 38 Martin Road.

8M Real Estate was set up in 2014.

As for Eu Realty, its latest sale of 265, 267, 269 and 271 South Bridge Road follows its S$26.5 million divestment last year of the next-door shophouse pair, Nos 273 and 275, to SilkRoad Property Partners.