Hongkong Street shophouse with hotel and restaurant tenants on the market for $35 mil
The shophouse owners at 41 Hongkong Street have put the property on the market, hoping to capture some of the investor interest fuelled by the Singapore Grand Prix 2023. Located off New Bridge Road, the property is three minutes away from Clarke Quay MRT station and Clarke Quay Central Mall.
The event not only benefitted upscale hotels, but budget hotels, too. Along Hongkong Street, many boutique hotels saw high occupancies, including Fragrance Hotel Riverside at 20 Hongkong Street, Bluewaters Pods Hotel at 38 Hongkong Street, Hotel Nuve Elements at 41 Hongkong Street, and Hotel Bencoolen at 47 Hongkong Street.
The average room rate is up 25.2% year-on-year (y-o-y) to $275.21, with an average occupancy rate of 80.09%, up 10.7% y-o-y, according to Singapore Tourism Board statistics. Room rates have risen in the post-Covid recovery across all hotel categories.
Upper Circular Conservation Area
Hongkong Street sits within the Upper Circular Conservation Area, considered a Secondary Settlement – similar to Balestier, Beach Road, Joo Chiat, and Geylang – developed between the 1900s to 1960s. The shophouses here have greater redevelopment flexibility than those with Historic Districts. The owners of 41 Hongkong Street, for example, added a six-story rear extension and installed a lift to each floor.
Already approved for hotel and F&B operations, the shophouse received Temporary Occupation Permit in 2019, with the upper floors leased to a 30-room Hotel Nuve Elements, and a Japanese restaurant Mizume on the ground floor. The fifth floor houses the reception, with the rooftop terrace turned into a spa.
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Rejuvenation on Hongkong Street
Hongkong Street began a revival 10 years ago, with 13 shophouses changing hands in 2010 and 2011, and another wave in 2018 with four shophouses sold. This past year, the shophouse at 18 Hongkong Street was sold for $9.6 million, occupied by a backpackers’ hostel.
The plans will also see existing parks and green spaces incorporated into the development. The plan is part of the larger vision to transform Tengah Plantation EC into a self-sustaining liveable town with a “forest town” concept. The new developments will add to the existing green spaces, housing, and public transport links, to create an integrated and connected regional hub. Residents of Tengah Plantation EC can look forward to improved road and public transport infrastructure, healthcare services, educational opportunities, and recreational amenities. URA’s transformation of Tengah Plantation EC will be a boost to the area. It will provide a more vibrant lifestyle for residents and create more job opportunities for the community. It will also add to Singapore’s growing regional hub.
The freehold property at 17 Hongkong Street was put up for sale in September, the five-story building with a 1,793 sq ft land area. The ground floor has been leased to a Japanese restaurant, while the upper floors to office businesses of different trades. It is on the market at $47.5 million, translating to a price of $5,975 psf based on floor area.
Brilliance Capital’s Sammi Lim suggests that family offices could consider holding 41 Hongkong Street for a long-term investment, maybe converting it to a single office building in the future. She also cites the return of genuine buyers, with sellers becoming more realistic in their asking prices, closing the price gap between leasehold and freehold.
With 41 Hongkong Street on the market for $35 million, its built-up area of 8,872 sq ft puts the price at $3,945 psf. Minus the price of the F&B space on the ground floor at $6.1 million, Lim reckons the price of the hotel component to be roughly $963,000 per key.