Total of S$144 million Spent on 10 Shophouses by 8M Real Estate
In a major deal recently, ten shophouses were bought by 8M Real Estate for properties located at Amoy Street, Lorong Mambong, Tanjong Pagar Road and Gemmill Lane.
It is believed that 8M Read Estate has spent nearly 144 million dollars that has been split into four different transactions.
At $80 million, the biggest deal of the four is for 6 shophouses, numbering 33, 35, 37, 39, 41 and 43 which are located at Tanjong Pagar Road. These shophouses are split in 4 storeys and also includes a mezzanine level.
This property was previously owned by Tony Chen, of Arcc Holdings.
Currently the ground floor shop space of which two are rented by a bridal boutique while other 2 shophouses are rented by Five Oars Coffee Roasters.
The last couple of shophouses is used as office space and also a cocktail bar that is leased to The Proof Collective.
According to the MD of 8M Real Estate, Ashish Manchharam the top storeys of the shophouses are currently vacant.
He said that recently the Urban Redevelopment Authority cleared approval allowing the use of the upper levels for running hotels.
According to Manchharam these levels will be operated by 8M Collective, the operations and hospitality management arm of the company.
When calculated the 6 shophouses occupy 30,800 square feet of built-up area for which 8M approximately had to shell out $2,600 psf.
The land on which the shophouses currently stand have a 99-year lease holding which had started on December 1994. It means that about 75 years of the lease agreement still remain.
8M Real Estate had in 2016 already purchased five shophouses numbered 15, 17, 19, 21 and 23 that are located on the rear end of the block. That sale was made at $2,166 per square feet.
The shophouses 87 and 88 at Amoy Street that belonged to SP Tao’s Shing Kwan was purchased by 8M for 39 million dollars.
The total floor area of these two shophouses measure 14,641 square feet and are on a land which still has a lease agreement for the next 71 years.
There are 4 levels in these two shophouses. Both units of the ground floor are rented by UFIT while the upper storeys are rented to other offices.
CBRE brokered this deal and it is believed that the present rental income of the shophouses are about 3%.
It is believed that 8M Real Estate has alternative plans for the ground floor of these two shophouses after the tenancy agreement expires within the next year.
It has plans to get Urban Redevelopment Authority’s approval so that it can convert the ground floor into a food and beverage section.
The Gemmill Lane property numbering 5 is currently vacant. Manchharam’s company paid 16 million dollars for acquiring this property.
It is believed that the company wants to renovate this property and rent it out soon. Currently the ground floor of the Gemmill Lane property has an approval for use to run food and beverages holdings.
With this current acquisition, 8M Real Estate further expands its presence in Gemmill Lane.
The tenth shophouse that 8M Real Estate has bought is located at 48, Lorong Mambong situated in Holland Village and it paid approximately 8.3 million dollars.
Currently it is a freehold property that has been leased out to a Japanese restaurant and it yields about 3% every year. Savills Singapore’s Simon Monteiro and Richard Jany Real Estate brokered this transaction.
On the other side of the road there are mixed development at Holland Road that is led by Far East Organization that was only last year tendered for $1.2 billion.
The MD of 8M Real Estate said that the company is banking on Holland Road’s development in the near future and as long-term investors they are willing to wait.