Ashish Manchharam, one of the biggest buyers of conservation shophouses in recent years, talks about his interest in rejuvenating assets and his diversification plans
Manchharam: We’re a property company that focuses on building a portfolio of properties and holding them for the long term
The government is encouraging more people to walk and cycle as part of its effort to make Singapore “car-lite”. Ashish Manchharam, founder and managing director of property investment and development group 8M Real Estate, encourages his staff to walk for quite a different reason.
The company has a portfolio of 31 conservation shophouses, which are predominantly in the CBD and Chinatown area. “Walking is the best way to see what’s going on,” he says.
Last Tuesday, Manchharam made two trips on foot to 28 Ann Siang Road, acquired for $52 million in June. The purchase price translates into $2,167 psf, based on a total gross floor area (GFA) of 24,000 sq ft.
The upper floors of the corner property on Ann Siang Road were operated as The Club hotel by Harry’s International until end-August. Manchharam intends to refurbish the 20 hotel rooms before bringing in a new operator.
The ground floor of the property at Ann Siang Road had two restaurants, with a whiskey bar in the basement. These have since closed. Manchharam has already identified two F&B operators with “new-to-market concepts” for the ground-floor units, and a wine bar for the basement. The rooftop bar, Tiger’s Milk, will continue to be operated by Harry’s until early next year.
“We are repositioning the entire property and rejuvenating that corner of Ann Siang Road, which has been very quiet,” says Manchharam. “By bringing in more established F&B operators, we hope to attract more people to the area.”
8M Real Estate acquired 28 Ann Siang Road for $52 million in June. It is planning to reposition the property
New lease of life for Keong Saik hotels
Besides the former The Club hotel, 8M Real Estate also snapped up the Naumi Liora on Keong Saik Road in June. The 79-room hotel, operated by the Hind Group, occupies 10 freehold conservation shophouses. 8M Real Estate’s purchase price of about $75 million translates into $2,750 psf, based on the GFA of close to 27,300 sq ft.
Manchharam intends to convert all the ground-floor units of the shophouses into F&B space. By bringing together “a bunch of really good F&B operators”, he hopes to create a destination.
Besides F&B, he sees renewal taking place in the boutique hotel scene. Located across the road from Naumi Liora is the 32-room Hotel 1929, which former owner Loh Lik Peng of Unlisted Collection sold for $35 million in 2013 after acquiring the property a decade before and transforming it. Meanwhile, Chinatown Hotel, located on Teck Lim Road, just off Keong Saik Road, was sold for $31 million in July. The new owner of the 42-room hotel is looking to refurbish and reposition it.
Naumi Liora will cease operations early next year, after which 8M Real Estate intends to renovate the property. The renovation and repositioning of these boutique hotels are likely to spark the rejuvenation process on that end of Keong Saik Road, notes Manchharam.
Interest in boutique hotels housed in conservation shophouses has always been strong, according to Clemence Lee, associate director of capital markets at JLL and a specialist in shophouses. “Such properties are rarely transacted because they are typically tightly held by the owners. Supply is further restricted as the authorities are also no longer granting hotel licences in shophouses,” he says.
Most of the boutique hotels sold this year, such as Naumi Liora, Chinatown Hotel and The Club Hotel, have been on the market for quite some time, says Lee. “The transactions took place because the sellers were willing to drop their pricing slightly,” he explains.
Another catalyst for the rejuvenation in the Keong Saik area is the scheduled completion of the Thomson-East Coast Line about three years from now. There will be two stations within walking distance of Keong Saik Road, namely the Maxwell MRT station and Outram Park MRT station, which will become an interchange for the Thomson-East Coast Line and East-West Line. “Greater connectivity will bring more footfalls to the area,” observes Manchharam.