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Freehold conservation shophouse sold on Kitchener Road for an estimated $5 mil
By Felicia Tan | September 6, 2021

Photo of the two-storey conservation shophouse at 147 Kitchener Road: Samuel Isaac Chua/EdgeProp Singapore

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SINGAPORE (EDGEPROP) - Aaron Wan, senior group district director at PropNex who is used to acting as the broker in property deals, became the buyer of a two-storey conservation shophouse on Aug 23.

Read also: Shophouse at Kitchener Road for sale at $19.8 mil

The freehold shophouse, which sits on a land size of 1,440 sq ft, is located at 147 Kitchener Road off Jalan Besar.

It is also located within close proximity to City Square Mall, Farrer Park MRT station on the North East line, Parkroyal on Kitchener Road and Mustafa Centre.

Kitchener Road is also home to notable restaurants such as Hillman Restaurant, which sells traditional home-cooked zi-char-style food and Chinese restaurant Putien.

The shophouse has a permanent licence from the Urban Redevelopment Authority (URA) to house food and beverage (F&B) tenants only.

Wan declined to reveal the exact amount paid for the shophouse. He has, however, shared that he paid close to $5 million, or around $3,472.22 psf, for the property. The price psf is calculated based on the land area of 1,440 sq ft.

According to Wan, he purchased the shophouse directly from the owner’s widow, who owned the property, after coming across its listing.

Together with his wife, the couple have been looking to invest in a shophouse for some time, but have not “found the right one”.

“The property has a permanent licence for F&B tenants on the first floor … It is rich in history and culture, and it is located in a superb and prominent location. There was nothing else to ask for,” he adds.

The shophouse, which is estimated to have been built in the 1920s, features an ornate facade as well as spiral stairs that lead to an open terrace on the rooftop.

The land has a maximum plot ratio of 3.0, with the option of further developing an extension at the back of the property.

This means the shophouses in the area have the capacity to expand their rear area to a maximum of six floors, something that a pair of neighbouring shophouses have already done, says Wan.

The shophouse was previously home to Zen Fut Sai Kai, which is one of Singapore’s oldest surviving Chinese vegetarian restaurants.

The restaurant, which first opened in 1953, was known for its Cantonese-style dishes and old-school decor.

The family decided to close the business after 64 years, in September 2017, after the restaurant’s second-generation owner passed away earlier in the year.

​​Between 2017 and this year, the owner’s widow leased the first-floor unit to a Thai restaurant, Thai Goldmine Kitchen, for two years. The remaining two years were leased to an Indian restaurant, Ponnusamy Restaurant.

This year, the owners of Ponnusamy Restaurant decided not to renew their lease after the two-year contract.

“The property has a permanent licence for F&B tenants on the first floor … It is rich in history and culture, and it is located in a superb and prominent location. There was nothing else to ask for,” he adds.

​​While the area makes good business sense to Wan due to its proximity to City Square Mall, the space was a big part of his growing up years as well.

“I grew up attending Saint Andrew’s School (Secondary), which was just two stops away at Potong Pasir MRT. When I was younger, I visited City Square Mall a lot with my friends. The shophouse faces directly opposite the mall. Parking is also convenient for patrons to any future restaurant that leases the space. Furthermore, for those who don't drive, we are also two stops away from Dhoby Ghaut,” he says.

Plans for the property

For now, Wan says he intends to give the property a clean-up, with a fresh coat of paint, and nothing major yet.

“We are already in the midst of talking to contractors,” he says.

“We are also repainting the property with basic or neutral colours that are allowed by the URA. To make it more modern looking, we are looking at colours like off-white,” he adds.

Wan is also keeping the structure of the building unchanged for the time being.

“We have the potential to maximise the 3.0 plot ratio like our neighbours, but that’s not in the works for now.”

He has not yet marketed the property, but he says he will be looking into finding new tenants soon, around the end of September. (See: Check all latest Singapore property Market Trends)

“We are currently sharing with our own network of friends to see if anyone is keen to expand their business, or begin a new business in F&B,” he says.

In the long-term, the couple plan to lease the property out as a long-term investment.

“We are expecting a monthly rent of $10,000 to $12,000 for the ground floor. I’m exploring using the second floor as an office for my team. We may also consider renting it out for $4,000 to $5,000 to a yoga, gym or dance studio,” he says.

However, they are open to selling the property as well, should the right offer come along.

“We are not actually looking to sell, as we are not short of cash at the moment … [although] an amount we would consider would be around $8 million,” he says.

As the shophouse is designated for F&B tenants only, Wan says he hopes to “find a reputable tenant or someone who is able to operate here for many years to come”.

“We hope that the property is able to become an iconic spot for both locals and tourists alike… like a bistro that serves alcohol, an upscale Chinese restaurant, or a chic café with good Western brunches,” he says.

“It would be a place that will attract employees in nearby offices from City Square, Centrium, ARC 380. We are confident that our plans for the property will draw in large crowds as we are one of the only properties to have a bistro or café of that nature along this particular street.”

Amassing a portfolio of shophouses

Looking ahead, Wan says he hopes to acquire “at least one more” conservation shophouse that are F&B approved, particularly in the coveted District 1 and 2 areas, when they have saved enough for the down payment.

Districts 1 and 2 are where Boat Quay, Raffles Link, Telok Ayer, South Bridge Road, Tanjong Pagar, Anson, Keppel are located.

“As investors, we are looking at capital appreciation, of course. However, we are also keen on gaining rental yield from our buys,” he says.

In the meantime, the couple have their eyes on shophouses in Districts 7 and 15 as well.

​​​​“Even though our recently-purchased property is located on District 8, this one is along Kitchener Road, where there are better and more international crowds,” he says. “The main street of Jalan Besar, where the famous eateries like Swee Choon and Beach Road Scissor-Cut Curry Rice are at, is also another place in District 8 that we’re looking at,” he adds.

In terms of shophouses, Wan says the couple are only looking at conservation shophouses as they are “rarer and are highly sought after, even by family offices, funds and high net worth individuals (HNWI) from abroad.”

“As a Singaporean, these shophouses also represent a sense of nostalgia and sentiment to own something that was built before the war in the 1920s, when Singapore was just a tiny fishing village,” he says.

Check out the latest listings near Kitchener Road, Farrer Park MRT station

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