When Matthew Ong, CEO of SLB Development, bought the four-storey commercial building at 38 and 40 South Bridge Road for $13.58 million in an off-market deal in February 2023, the plan was straightforward: tear it down, redevelop it, and use it as his own headquarters.

Three years on, an accidental architectural discovery — followed by a shift in URA policy — has transformed that redevelopment plan into something very different.

The turn came about almost by accident. While contractors were gutting the interiors, they found leaks in some of the joints. Fixing them meant stripping off the entire glass-and-aluminium cladding of the facade — and that removal revealed the building's original "Shanghai plaster" finish underneath. A stone-like coating popular for buildings from the 1920s to the 1960s, Shanghai plaster is rarely used today and evokes a bygone era.

Read also: Four-storey commercial building on South Bridge Road launched for sale at $38 mil

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On closer inspection, the material was found to be largely intact, and the building's original reinforced-concrete columns and floors were still sound. Built sometime between the 1930s and 1940s, the property also features architectural elements such as flag posts that, URA says, reflect the grandeur of the Art Deco style.

Ong decided to conserve it. It was not the first time he had chosen conservation over redevelopment. A year earlier, after buying a pair of buildings nearby, he had also opted to conserve rather than demolish them.

Demolition to conservation

Ong had purchased the pair of four-storey commercial buildings at 30 and 31 North Canal Road in March 2022 for $14.38 million. Built in the 1950s, they were representative of the modern-style buildings of that era — reinforced concrete with steel-frame windows in a "graph paper-like" design, according to URA.

"We saw how conserving a building gave it more character," Ong says. "And we decided to conserve the South Bridge Road property too."

Having chosen to conserve the buildings rather than demolish them, Ong went further. The buildings at 38 and 40 South Bridge Road straddle two separate 99-year leasehold lots: one of 1,300 sq ft with just 17 years left on a lease dating from 1941, the other of 1,324 sq ft with 24 years remaining on a lease from 1947. Both near-expiry leases have since been topped up to a fresh 99 years from June 2026.

Ong is now amalgamating the two into a single 2,624 sq ft lot under one address at 38 South Bridge Road. The combined site will have an 11.5m frontage and a gross floor area (GFA) of 10,503 sq ft.

Read also: Adjoining pair of shophouses on Hongkong Street for sale at $42 mil

Alongside conserving the entire facade, Ong undertook extensive asset enhancements, including new lifts, new washrooms, upgraded mechanical and electrical systems, and enhanced ventilation and fire-protection infrastructure.

The building carries full commercial zoning, with the first and fourth levels approved for F&B use and fitted with exhaust ducts and grease traps. The works were completed in 2Q2026, with the Certificate of Statutory Completion obtained on June 2.

Policy reversal

Ong was still weighing whether to move into the building at 38 South Bridge Road when URA, in a circular dated June 5, signalled it was prepared to relax restrictions on accommodation-led uses — new hotels, backpackers' hostels and serviced apartments — in the Upper Circular Road and Beach Road Conservation Areas. The aim was to encourage more vibrancy and diversity along those street blocks.

The Upper Circular Road Conservation Area covers Upper Circular Road, South Bridge Road, North Canal Road, Carpenter Street and Hongkong Street.

The move reverses earlier curbs on new short-stay accommodation in the Singapore River, Downtown Core and surrounding districts. The restrictions were intended to protect the precincts’ historical identity and prevent an over-concentration of similar lodging concepts.

The change has prompted building owners in the area to rethink their options. "The potential to obtain planning approval for hotel conversion widens the pool of investors, especially as the hospitality market continues to gain momentum," says Melvin Chay, senior director of capital markets at Knight Frank.

Read also: Freehold shophouse on South Bridge Road for sale at $33.4 mil

Testing the market at $38 mil

Ong has since applied for Outline Planning Permission for an estimated 35-40 rooms at 38 South Bridge Road. The application is pending approval.

"When the government allowed the application for use as a hotel or serviced apartment, we thought it was a good time to test the market," he says. "We received calls from some co-living operators and family offices, so I thought it was a good opportunity to launch it and see the response."

He has appointed Knight Frank as the exclusive agent to handle the sale at a price tag of $38 million, or $3,618 psf on GFA. The property is being offered for sale by expression of interest (EOI), closing on Aug 19.

Beyond hospitality players, Knight Frank's Chay expects the building to appeal to end-users — corporate owners seeking a headquarters — and to private capital. The draws, he says, are a price tag under $50 million and vacant possession.

More owners enter the market 

Ong is not the only one testing the market. A portfolio of three newly refurbished boutique commercial buildings, also in the Upper Circular Road Conservation Area, has been launched for sale by EOI closing on Aug 18. Jointly marketed by Cushman & Wakefield (C&W) and CBRE, the buildings are offered collectively for about $89.15 million, or can also be acquired separately.

All three have undergone extensive asset enhancements, with their leases topped up to a fresh 99 years. The trio belong to the same Singaporean owner, a prolific property investor.

The largest is the six-storey building at 38 North Canal Road — an amalgamation of 38 and 39 North Canal Road on a combined 3,320 sq ft site with a GFA of 14,322 sq ft. Under a 99-year lease that began in January 2024, with 96 years remaining, it is on the market for $44.4 million, or $3,100 psf.

The owner bought 38 North Canal Road for $8.45 million in April 2022, though no caveat was lodged for 39 North Canal Road. He refurbished the entire property, which pairs a five-storey conserved front block with a newly built six-storey rear extension, completing the works last year.

The building is substantially leased, with a diverse tenant mix spanning a Chinese fine-dining restaurant; a wellness club featuring a sauna, Arctic plunge pools and massage therapy; a leadership and coaching firm; a Hyrox training gym; and a shipbroking firm.

At 32 Hongkong Street, the ground floor is leased to Wine Fridge Singapore, with office tenants occupying the upper floors. The property is on the market for $22.35 million ($3,100 psf).

Meanwhile, at 40 Carpenter Street, a café, a Pilates studio and a Japanese hair salon occupy the lower floors, with offices above. It is being marketed for $22.4 million ($3,200 psf).

Catalyst for change

The government's move to relax short-term accommodation rules is "a catalyst" for footfall and vibrancy in the area, says Clemence Lee, executive director of capital markets at CBRE. "We see this as a positive move."

Lee notes the three assets could yield a total of 450 beds if converted to backpacker or student-hostel use. Alternatively, buyers could pursue boutique hotel or serviced-apartment configurations with larger rooms.

"These assets represent a new generation of conserved shophouses," says Sophia Lim, director of capital markets at C&W Singapore. Newly refurbished, fully tenanted and income-producing, the portfolio offers "a compelling combination of long-term tenure security, resilient income, and future value-add creation through repositioning opportunities," she adds.

The appeal of buildings in pairs

Investors like SLB’s Ong are drawn to buildings that come in pairs, such as 38 and 40 South Bridge Road, and 30 and 31 North Canal Road.

"When you have two adjoining shophouses, the interiors are brighter because you get a lot of natural light," he says. "You have the flexibility to turn it into offices, a hospitality asset or even for your own use — like what Hwa Hong Corp did.”

Indeed, 38–40 South Bridge Road had served as the headquarters of real estate investment and development firm Hwa Hong Corp for more than 20 years before its sale to SLB Development in 2023. URA Realis data shows that Hwa Hong bought the property in January 2000 for $4.776 million; previously, it was the People's Insurance Building.

After extensively restoring 30 and 31 North Canal Road, Ong put that property on the market last October, with CBRE and Savills as joint marketing agents and a price tag of $45 million, or $3,340 psf on GFA. The EOI closed last November, but Ong says he remains "open to offers". The newly completed building is already 50% leased, he adds.

From brothels to speakeasies

The owners and the variety of tenants today illustrate how the Upper Circular Road area has turned into “a mini lifestyle and F&B hub", says CBRE’s Lee. The transformation, he notes, has been organic and gradual, as new owners refurbish old buildings, top up leases and bring in fresh tenants.

Hongkong Street has changed the most. Before World War II, when it was known as Macau Street, it was lined with brothels serving the Cantonese and Japanese communities. It later gave way to traditional trades and warehouses. "Fifteen years ago, the shophouses were still mainly occupied by dried-goods stores," recalls Lee, who began his career marketing shophouses on the very same street.

His first deal was the sale of 31 Hongkong Street to 8M Real Estate for $14.45 million in July 2015. Formerly owned by a shipping company, the building has since been refurbished, with its lease topped up, and converted into 20 serviced apartments, now managed by co-living operator Cove.

The street's newer arrivals underscore the shift. Early this year, Paddington Bay Residences, a high-end dog hotel, opened at 35 Hongkong Street, offering concierge-style grooming, walking and training, alongside a lounge, a heated indoor pool and a private garden.

A few doors down is Luma41, a 30-room, Peranakan-inspired hotel with a ground-floor café and rooftop jacuzzi, which opened in February. It is a rebranding of the former Hotel Nuve Elements at 41 Hongkong Street, which was offered for sale at $35 million three years ago. “It’s still available for sale at the same price,” says Sammi Lim, founder and executive director of Brilliance Capital, the marketing agent.

Other hospitality concepts have followed. Kinn Habitat, a female-only, wellness-focused capsule hotel at 39 South Bridge Road, opened in 2021. Another capsule hotel, Gatherhouse by The Assembly Place at 65 South Bridge Road, is slated to open soon.

F&B has driven much of the transformation on Hongkong Street. Among its best-known tenants is 28 Hongkong Street, the speakeasy that opened in 2011 and has since become one of Asia's most celebrated bars. It was named Asia's Best Bar in 2016 and has repeatedly featured on both Asia's and the World's 50 Best Bars lists.

"Gentrification started from 28 Hongkong Street," Lee says. Nearby is Willow, at 39 Hongkong Street, a one-Michelin-starred restaurant serving a pan-Asian tasting menu by chef Nicholas Tam.

More shophouses come to market

Another EOI has also been launched for a pair of adjoining shophouses at 18 and 19 Hongkong Street. Marketed by Knight Frank Singapore, the properties are available individually or collectively at a combined guide price of $42 million. The EOI closes on Aug 25.

The four-storey building at 18 Hongkong Street is approved for hostel use and is currently occupied by City Backpackers. It has a guide price of $14.5 million, or $2,858 psf on a GFA basis.

Next door, 19 Hongkong Street is a four-storey commercial building with a new six-storey rear extension. The property, which underwent a $7 million refurbishment and has a fresh 99-year lease, is on the market for $27.5 million ($3,111 psf based on GFA).

Combined, the two sites occupy 3,676 sq ft and could potentially be amalgamated into a larger accommodation asset, subject to the relevant authorities' approval, says Dayna Ang, senior manager of capital markets at Knight Frank Singapore.

A district on the rise

The biggest draw of the Upper Circular Road area, CBRE's Lee says, is its location within the CBD and its proximity to the Clarke Quay and Raffles Place MRT stations.

"It is also one of the oldest districts in Singapore," he adds. "People are drawn to the area by the rejuvenation taking place — similar to what we saw in Club Street in the early 2000s, Keong Saik Road in the 2010s, and Joo Chiat in the recent decade."

The momentum extends beyond the conservation area. Earlier this year, C&W brokered the sale of a five-storey building at 49 and 53 New Bridge Road for $37.5 million following a relaunch. Two years earlier, seller OCBC had launched a public tender at $45 million.

The property at 49 and 53 New Bridge Road was sold with vacant possession to a Singaporean high-net-worth individual. "It was purchased for legacy-planning purposes," says C&W's Lim. "The buyer is cognisant of the rejuvenation taking place and has a long-term view in mind."

Knight Frank's Chay points to a string of hospitality deals this year: the 575-room Crowne Plaza Changi Airport, sold for $500 million to a joint venture between OUE and Tokyo Century; the 272-room Orchid Hotel in Tanjong Pagar, bought for $273 million by Master Contract and Westmont Hospitality; and the 251-room Park Avenue Changi, acquired for $101 million by co-living operator Coliwoo, a subsidiary of LHN Group.

"In the last couple of months, and in the next few months, we will see more hospitality transactions announced as well," Chay says.

However, the assets currently on the market in the Upper Circular Road precinct are boutique commercial properties, notes C&W's Lim. "They are priced in the $20 million to $50 million range, and have potential for change of use," she says. "They will appeal to high-net-worth individuals and family offices looking to enter the living sector."

The August EOIs will provide an early test of whether the policy change can translate planning flexibility into higher investor demand. For owners of conserved buildings in the precinct, however, the range of possibilities has already widened.

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