Set of Heritage Shophouses on Singapore’s Club Street Sell for $18.6M

ABR Holdings is buying a row of heritage commercial buildings on Singapore’s Club Street from entities linked to Citystate Group for a total of S$25.88 million ($18.61 million), according to a joint announcement on Tuesday.

A subsidiary of the SGX-listed F&B operator agreed to purchase five adjacent shophouses at 1, 3, 5 Club Street and 7, 9 Club Street in the Outram area of Singapore’s downtown core via two separate transactions, adding a combined 7,225 square feet (671 square metres) of retail and office space to its portfolio.

“ABR is excited to join the vibrant community at Club Street with the acquisitions of 1,3,5,7,9 Club Street,” said Ang Jun Hung, ABR’s group strategy and operations director. “This standalone island of shophouses, which boasts a rich heritage, presents a myriad of opportunities for ABR to strengthen our F&B portfolio, alongside our growing presence in the property development space. We look forward to contributing to the area.’’

Sitting at the junction of Club Street and Cross Street, the row of F&B occupied properties sit opposite the Cross Street Exchange, an office and retail complex which PAG agreed to purchase in January for S$810.8 million investors increasingly turn their attention to commercial assets in Singapore’s central business district.

Soon To Rise Hotel Nearby

ABR Land is paying the equivalent of S$3,582 per square foot of the built area for the heritage assets, which reflects a 9.2 percent discount from the S$28.5 million asking price when the portfolio was put up for sale in February, with that with that original target equivalent to $3,945 per square foot.

Situated on two land parcels, Citystate Properties was the vendor for the first three shophouses,  which are three storeys high with an attic, while the adjoining pair of two-storey buildings at 7 and 9 Club Street were sold by Dr Ling Ai Ee, the widow of the company’s former chairman, Leow Siak Fah, who passed away in 2015.

The ground floor of the properties are all leased to food and beverage retailers, including popular food chains Merci Marcel Bistro, Parallel Coffee Roasters cafe and Yen Bar while the upper floors are dedicated to office space.

Located a few blocks away from Telok Ayer MRT Station, the site is expected to enjoy increased foot traffic with the opening of an upcoming 20-storey hotel at 8 Club Street near the end of this year by Worldwide Hotels Group.

Leow Tze Wen, group chief executive of Citystate Group, said the divestment is part of the company’s strategy of recycling capital. The divestment comes around eight years after the firm and the Leow family bought the portfolio in 2014 for S$22 million, based on local news reports.

Attracting Offshore Buyers

While ABR won the bid, Sophia Lim, an associate director for investment sales and capital markets at Savills Singapore who brokered the sale, said the property, which occupies a wedge-shaped plot between Gemmill Lane and Cross Street, attracted a number of inquiries from overseas buyers looking to enter the local commercial property market, including investors from mainland China, Hong Kong and Indonesia.

“Given its rarity as an island-site coupled with excellent locational attributes in the CBD, Savills ran a competitive bidding exercise and the response to the EOI (expression of interest) was overwhelming,” Lim said. “We are delighted to broker this flagship property in an exciting precinct that is still undergoing urban transformation.’’

Lim said ABR, which runs the Season Confectionary and Bakery and serves as the operator of Swensen’s ice cream parlour in Singapore, is purchasing the portfolio to expand its real estate holdings as well as its food and beverage operations in the Lion City.

Shophouses Sales Hit Record Sales in 2021

There has been a string of conservation shophouses either sold or are being put out in the market over the past year, especially in Chinatown in Singapore’s core financial district where most of these low-rise, heritage commercial blocks are concentrated.

In late 2021 the RB Family office, a private investment vehicle for tycoon Raj Kumar and his son, exercised an option to acquire the Porcelain Hotel, a hostelry spanning a row of shophouses at 46-50 Mosque Street for a reported S$90 million.

Then in April of this year, CBRE started marketing a row of seven conservation shophouses at 20 Trengganu Street for S$110 million – a deal which if completed would break the record for largest shophouse sale in the city-state.

The volume of shophouses sold in Singapore hit an all-time high of S$1.9 billion last year according to a report by Knight Frank, as investor sentiment improves on expectations of an economic rebound.