SINGAPORE-BASED real estate investment company 8M Real Estate is boosting its shophouse portfolio in the central business district (CBD) with a S$29 million purchase of 28 Stanley Street.

The option on the purchase was exercised this month. The freehold property is in the Telok Ayer Conservation Area of the Chinatown Historic District. 8M is buying the shophouse with vacant possession.

“The first and second floors are approved for restaurant use and the third and fourth floors, for office use,” said Terry Wong, senior director of capital markets at JLL, who brokered the sale via an expression of interest exercise.

Boost from Solitaire on Cecil

The shophouse is diagonally opposite Solitaire on Cecil, a predominantly office project that will be developed on the former PIL Building site, with dual frontages on Stanley and Cecil streets. Market watchers note that businesses in shophouses along Stanley Street are expected to receive a boost when Solitaire on Cecil is completed around 2027.

The 20-storey freehold development will have a through-block link on street level – a fully-covered walkway open 24 hours – from Stanley Street to Cecil Street. Strata sales in the project have begun.

The Business Times understands that both restaurant units on the street level of Solitaire on Cecil have been sold. The smaller unit of 936 square feet faces Cecil Street and has fetched slightly above S$5,400 per square foot (psf); the larger unit of 1,410 sq ft facing Stanley Street has sold for nearly S$6,000 psf.

Buyers of both units are said to be overseas parties looking to operate their own restaurants, in line with the high-end dining offerings in Stanley Street shophouses.

Solitaire on Cecil is being developed by a tie-up between TE Capital Partners and LaSalle Investment Management.

For most foreign buyers new to the Singapore shophouse market, the CBD remains their primary target.

Terry Wong of JLL

Nearby, Telok Ayer Street and Amoy Street are also seeing a string of transactions, say market watchers.

94 Amoy Street is beng sold for S$21.8 million by a unit of Santa United International Holdings which acquired the 999-year leasehold property for S$18.69 million late last year, reaping a nice gain in a matter of months. In the latest deal, the buyer is NC Properties, fully owned by New Century Corporation, which in turn is controlled by Ng Cheow Leng.

Santa United International’s businesses include hospitality (under the Santa Grand brand), property and logistics. It also distributes fuels, lubricants, liquefied petroleum gas and specialty chemicals.

The Santa United family is also understood to be buying the nearby 92 Amoy Street, for S$22 million.

Comparing shophouse prices can be tricky as pricing is affected not just by the property’s floor area but also the condition of the unit and the tenant profile.

Richard Tan of PropNex Shophouse Elites

Word on the street is that SilkRoad Property Partners is selling two adjoining 999-year leasehold shophouses at 78 and 80 Amoy Street. The price is said to be about S$75 million. The three-storey with attic shophouses are fully tenanted – with Italian restaurant Gotti and Korean restaurant Go! K-JJAJANG on street level and offices above.

Meanwhile, a seasoned property investor is selling 180 Telok Ayer Street, also a 999-year property, for S$30 million; the buyer is said to be from China.

Richard Tan of PropNex Shophouse Elites said that prices of conservation shophouses in Districts 1 and 2 (covering the CBD and Chinatown locales) this year have been higher than last year, although he could not say by how much – due to the mix of factors in play. “Comparing shophouse prices can be tricky as pricing is affected not just by the property’s floor area but also the condition of the unit and the tenant profile.”

The transacted price for 28 Stanley Street works out to about S$4,580 psf on the floor area, which some observers say is in line with recent transactions in District 1, factoring in that capital expenditure is required to renovate this shophouse.

Said Wong of JLL: “More seasoned shophouse investors have been diversifying out of districts 1 and 2 because of substantial price gains in the past couple of years. However, for most foreign buyers new to the Singapore shophouse market, the CBD remains their primary target amid a lack of familiarity and confidence in the other locations on the island.”

“Due to the high interest rate environment, buyers would prefer to borrow a smaller quantum or do a full-cash transaction, so they have become more selective than before when acquiring properties.”