Singapore’s Royal Holdings Seeks Buyer for $195M Orchard Road Shophouse Complex

A shophouse complex in Singapore’s Orchard Road retail belt has gone on the market less than two weeks after the launch of a collective sale next door at The Centrepoint mall and residences. 

Cuppage Terrace consists of 17 adjoining shophouses and is valued at S$250 million ($195 million), according to a Monday announcement by CBRE, which is marketing the property at 19 Cuppage Road. Developed in 2008 by an arm of Royal Holdings, owned by local tycoon Raj Kumar Hiranandani, the asset comprises 50,891 square feet (4,728 square metres) of total floor area across bars, restaurants and outdoor spaces, with 62 years left on a 99-year leasehold. 

With Cuppage Terrace enjoying an 85 metre (93 yard) road frontage and direct proximity to The Centrepoint, CBRE anticipates interest in the property from both local and international capital, including family offices, funds and high-net-worth investors, said Clemence Lee, executive director of capital markets for Singapore at the consultancy.

“This is a truly generational asset, rarely brought to market, representing an unparalleled opportunity for investors to acquire a unique asset with a palatable investment quantum of S$250 million in the heart of the internationally recognised Orchard Road,” Lee said.

Potential Combination

The sale campaign for Cuppage Terrace runs until 12 February. The exercise has implications for The Centrepoint’s tender, closing on 26 February, due to the potential to merge the properties into a single redevelopment site.

On 7 January, Savills announced the collective sale of 66 retail units and 66 residential units comprising the rear block of The Centrepoint at 176A Orchard Road, setting a guide price of S$418 million. The site has a maximum allowable gross floor area of 250,320 square feet.

The 132 leasehold strata units are held by a mix of independent owners and The Centrepoint’s developer, Frasers Property, controlled by Thai billionaire Charoen Sirivadhanabhakdi. The collective sale excludes the remaining 151 retail units and Frasers’ wholly owned freehold podium fronting Orchard Road.

The Centrepoint’s direct link to Somerset MRT station and location in the heart of Orchard Road offer a chance to develop a landmark property with an internationally recognised address, said Jeremy Lake, managing director for investment sales and capital markets at Savills Singapore.

“Developers have been bidding aggressively for GLS sites and some of these will be keen to buy a part of The Centrepoint,” Lake said. “For this reason, we are confident we can exceed the guide price of S$418 million, which equates to S$2,709 per square foot per plot ratio, after factoring in the Land Betterment Charge of $260 million for topping up the lease to a fresh 99 years and intensifying the total gross floor area to plot ratio 5.6.”

Great Expectations

CBRE’s Lee said Cuppage Terrace would likely set a mark as one of Singapore’s biggest conservation shophouse transactions, given the rarity of large, contiguous portfolios offered for sale in the segment.

“Over the last five years, astute investors have been acquiring such assets for their private, long-term portfolios,” Lee said. “For instance, major shophouse offerings by CBRE like The Rail Mall (43 shophouses), 46-50 Mosque Street (12 shophouses), 42-45 Mosque Street (10 shophouses), 17-33 Jalan Sultan (17 shophouses) and 161 Lavender Street (11 shophouses) were all transacted swiftly after their market introduction, underscoring this strong demand.”

Lake pointed to momentum in several collective sales brokered by Savills along Orchard Road, including the Concorde hotel and mall (S$821 million), Delfi Orchard (S$439 million), Tanglin Shopping Centre (S$868 million) and Ming Arcade (S$172 million).