FRASERS Properties is said to have advanced negotiations on a potential deal for its 72-unit serviced apartment and three conserved buildings along the Singapore River.
One entity associated with Tuan Sing Holdings could be the potential buyer. The Business Times believes that it has conducted exclusive due diligence in relation to a potential sale at a price slightly above S$130 Million.
The asset is a four-storey block named Fraser Residence River Promenade. It also includes three warehouses called godowns. These were the premises of the popular Zouk Nightspot for approximately 25 years.
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The warehouses and serviced apartments are part of a larger development which includes the Riviere. A 455 unit high-end project, it received its Temporary Occupation Permit – TOP – in January 20,23. It was completely sold by April that same year.
BT is aware that the 72 residences with service and three storage units are all part of a single strata.
Frasers Property developed a project on a Jiak Kim Street 99-year Leasehold Site, which they won at an Urban Redevelopment Authority Tender that closed in December 2017
Its winning bid, S$955.4million, translated to S$1,732.55 per square feet per plot ratio. That was only 0.6per cent more than the next-highest offer from Hong Leong Holdings.
The bids received totaled 10. The lease for the site expires in 93 years.
Fraser Residence River Promenade, which opened its doors last September, received its TOP rating in May.
Brewerkz has leased one of three warehouses, and operates Jiak Kim House as a restaurant serving modern Asian cuisine. According to Frasers Property’s most recent annual report, Frasers Property designed the second and third warehouses as versatile spaces suitable for coworking, hosting events, and serving as front-of house for Fraser Residence River Promenade.
Some market watchers claim that it is hard to determine the value because only a part of the space in the warehouses is currently generating revenue. In addition, the warehouses have certain uses.
The Straits Times reported on January 19 that 72 of the 72 serviced apartments are equipped with kitchenettes. The sizes range from 258 ft2 for the studio units, to 516 ft2 for the 1-bedroom units.
A price tag of S$130,000,000 would translate to S$1.8,000,000 per key. Some estimate that the net return is approximately 3 per cent.
Fraser Residence River Promenade offers a price that is comparable to those of freehold hotels located in Singapore. The hotel is situated near Havelock MRT, on the Thomson-East Coast Line. There is potential to increase serviced apartment numbers.
The sale is understood to have been brokered by Savills Singapore, which marketed the property through an expression-of-interest exercise that closed in late March.
Frasers Property, in the first three months of the year, signed a sale agreement for the 313 rooms Capri by Fraser Hotel, Changi City. The deal was worth approximately S$170 millions to a Consortium made up of Atelier capital Partners, TPG Angelo Gordon & Far East Consortium International.
The hotel, which is part of a larger integrated project, was built in a location with a lease that lasted about 45 more years. It is located just a few steps from the Expo MRT and Singapore Expo.
