BS Capital offers Hmlet@Lumiere portfolio for $93 mil

/ EdgeProp Singapore
March 22, 2019 12:30 PM SGT
On Friday morning, March 8, Raymond Ng, founder of property development firm BS Capital, paid an impromptu visit to Lumiere. He toured some of the newly furnished apartments on the top 12 floors of the 45-storey residential tower located on Mistri Road, just off Shenton Way in the CBD.
Co-living company Hmlet was putting the finishing touches on the units, with a feature wall of deep blue in the living room – a Hmlet signature – contemporary Scandinavian style furniture, home accessories from Ikea and potted plants to give the apartments a homely vibe.
A one-bedroom unit at Hmlet@Lumiere featuring the signature feature wall in every Hmlet-branded apartment (Credit: Albert Chua/EdgeProp Singapore)
They were certainly a contrast to the stark white walls of the past, acknowledges Ng. “I always thought a co-living or serviced-apartment type concept will work,” he says.
Ng, whose BS Shenton Pte Ltd is the developer of Lumiere, owns all the 43 units which span the 34th to 45th storeys. He had been holding onto these units since the 168-unit residential tower was completed in 2010. Meanwhile, the units on the lower floors have already been sold over the years.
Conversion to co-living
Initially, he baulked when he was told that all the existing furniture in his units at Lumiere had to go. That was after Hmlet’s ground staff took possession of the units on Feb 15. “All the furniture was usable,” Ng says. “But Hmlet wanted them removed so they could bring in their own furniture. It would have cost $40,000 to get someone to take them away.”
Ng: I always thought a co-living or serviced-apartment type concept will work for Lumiere (Credit: Albert Chua/EdgeProp Singapore)
Samuel Eyo, managing director of Lighthouse Property Consultants, came to the rescue by offering the furniture for free to friends who were property leasing agents.
Eyo had also introduced Ng to Hmlet co-founders Yoan Kamalski and Zenos Schmickrath in January. That coincided with the end of the master tenancy agreement that Ng had with his previous tenant.
Ng’s BS Shenton Pte Ltd struck a leasing agreement with Hmlet to manage the 43 units for the next five years, and the units have been branded Hmlet@Lumiere.
Hmlet is able to provide a turnkey service for developers and building owners – from furnishing the units, to managing them, to renting the units out on a per bed basis – and give the building owners a monthly rental return.
A two-bedroom unit at Hmlet@Lumiere where the co-living company will be managing all 43 apartments on the top 12 floors of the 45-storey residential tower (Credit: Albert Chua/EdgeProp Singapore)
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From apartments to beds
The co-living operator also ensures that the rental leases with its members adhere to URA residential leasing conditions, such as a minimum rental period of three months and the number of unrelated occupants in a private residential unit to be capped at six, says Schmickrath, who is also Hmlet CXO (chief experience officer) and chairman of the board at Hmlet Coliving.
Hmlet is at heart a technology-based firm, says Schmickrath. All members are connected by an app, which allows them to chat with other residents, request services and lodge complaints. Data collected through the shared platform is also used to make informed decisions such as how to match members who live in the same unit, and how to design spaces. Generally, the biggest fit-out cost is the kitchen, Schmickrath points out.
The 43 apartments at Hmlet@Lumiere comprise 32 one-bedroom units, eight 2-bedroom units, two duplexes and a penthouse. Studios are 47 sq m (506 sq ft); one-bedroom units range from 58 to 63 sq m (624 to 678 sq ft); two-bedroom units from 91 to 93 sq m (980 to 1,001 sq ft); and duplexes from 216 to 237 sq m (2,325 to 2,551 sq ft). The sole penthouse on the 45th floor is 473 sq m (5,091 sq ft).
A 506 sq ft studio apartment at Hmlet@Lumiere (Credit: Albert Chua/EdgeProp Singapore)
The units at Hmlet@Lumiere have a total of 60 beds. One- and two-bedroom apartments have been made available for viewing by prospective members from March 18.
At Hmlet@Lumiere, most of the kitchen appliances are original DeDietrich, which are still in good condition.
The addition of these 60 beds at Lumiere will bring Hmlet's portfolio to 1,000 beds by early June, says Schmickrath. Besides Singapore, Hmlet now has a presence in Hong Kong and Australia.
Schmickrath: The addition of these 60 beds at Lumiere will bring Hmlet's portfolio to 1,000 beds by early June (Credit: Albert Chua/EdgeProp Singapore)
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Hmlet premium
Ng, who is also executive chairman of Singapore-listed environmental management solutions group Enviro-Hub Holdings, is optimistic that Hmlet@Lumiere will be able to attract millennials. Having secured Hmlet as the co-living operator for the next five years, Ng has decided to put his entire portfolio of 43 units on the market for sale, with Eyo as the exclusive marketing agent.
The price tag for the portfolio is $93 million or $2,458 psf. According to Eyo, the Hmlet@Lumiere units are situated on the high floors and depending on their orientation, some units have unblocked sea views, others enjoy the CBD skyline, while some others look out to the future Great Southern Waterfront.
A co-living brand like Hmlet is able to provide a 10% to 15% rental premium relative to the typical apartment, says Eyo. Under co-living, the apartments are rented out on a per bed basis, and the rental they charge members is inclusive of furniture, utilities and WiFi. There are no additional charges.
Hmlet@Lumiere units are situated on the high floors and depending on their orientation, some units have unblocked sea views, others enjoy the CBD skyline, while some others look out to the future Great Southern Waterfront (Credit: Albert Chua/EdgeProp Singapore)
As such, Hmlet co-founders see hospitality at the core of its business. Renting a unit at Lumiere is equivalent to renting a serviced apartment property but with all the perks of a club membership. Hmlet regularly organises events for its members.
The rooftop deck above the penthouse of Lumiere will be turned into an entertainment deck with a bar, where events can be held. It is also a communal facility exclusive to Hmlet@Lumiere members residing on the 34th to 45th floors.
“Hmlet is clearly the market leader in the co-living space in Singapore,” says Eyo. “Co-living operators like Hmlet are disrupting the leasing market, especially for agents who specialise on leasing.”
View of the city from the penthouse of Lumiere (Credit: Albert Chua/EdgeProp Singapore)
Investment potential
According to URA records, units at Lumiere in the range of 400 to 500 sq ft have achieved monthly rental rates ranging from $2,350 to $2,800 in December and January. Meanwhile, units of 600 to 700 sq ft have commanded monthly rental rates in the $3,000 to $3,200 range.
Based on the market rental rates achieved, Eyo estimates the new owner of the Hmlet@Lumiere units could look forward to a gross rental yield above 2% per annum.
Schmickrath points out the value of the Hmlet brand. He relates how Hmlet@Sam Leong in Little India was conceived. “The prospective owner was looking to buy a property then, and we asked if we could go shopping with him,” he recounts. “We identified the shophouse – a standalone four-storey shophouse at 22 Sam Leong Road. We helped him to reconfigure the shophouse, the layout plans, and to fit out the units.”
Ng kept the 43 units on the top 12 floors for investment, while the lower floor units were offered for sale when the project previewed in Dec 2006 (Credit: Albert Chua/EdgeProp Singapore)
The four-storey shophouse was converted into the 11-bed Hmlet@Sam Leong. “The layout is very unique,” says Schmickrath. “Each floor has a breakout area.” Hmlet also signed a five-year lease to manage the property.
"With Hmlet, the owner was able to double the rental yield on the property," he adds.
Ng is hoping that he will enjoy the same uplift with his Hmlet@Lumiere.
After all, Lumiere is a redevelopment of the former HMC Centre which he had purchased for $20.5 million back in 2005.
Lumiere previewed in December 2006, and units were sold at an average of $1,681 psf, based on caveats lodged with URA Realis in the three months from December 2006 to February 2007.
When Lumiere was first launched for sale over a decade ago, there were fewer than a handful of private residential projects in the Shenton Way-Tanjong Pagar area (Credit: Albert Chua/EdgeProp Singapore)
There were very few inner-city apartments in the CBD and Marina Bay then, recalls Ng. There were only the 646-unit Icon at Tanjong Pagar (completed in 2007), the 312-unit The Clift on McCallum Street (completed in 2011), and the 265-unit Emerald Garden at Club Street that was completed in 1998.
At Marina Bay, the 1,111-unit The Sail was the first residential development to be launched in late 2004 and was completed in 2008. It was followed by the 428-unit Marina Bay Residences that was launched in December 2006 and sold out within three days.
Ng had therefore retained the remaining 43 units on the top 10 floors at Lumiere for investment.
Divestment, focus on industrial and cars
Since 2011, his property investment focus has shifted towards the industrial sector in 2011. He had purchased a freehold site of 455,000 sq ft on Jalan Liam Huat, off Kranji Road, and has developed it into an industrial complex of more than 2.3 million sq ft, named Carros Centre. “I’m focused on the car business now,” he says.
Eyo: Hmlet is clearly the market leader in the co-living space in Singapore (Credit: Albert Chua/EdgeProp Singapore)
His company already has 500 cars for lease, and he intends to increase the fleet to 2,000 by end of the year. He has also recently acquired 60% of Alpine Group, which owns Alpine Car Rentals, Alpine Motors (the dealership for Chevrolet cars) and Auto Germany, the sole distributor of Opel cars.
In February, Ng’s Carros Project Management Pte Ltd purchased the neighbouring industrial site in a JTC land tender with a bid of $5.1 million. The 0.77ha site has a 20-year lease and a plot ratio of 2.5. Ng intends to turn it into an extension of his car-related business at Carros Centre next door. “I’m making this into a hub for automobiles – a one-stop shop for car leasing, repairs, car parts and after-sale service,” he says.
As such, Ng feels it is time to divest his portfolio of units at Lumiere and invest further into industrial property catering to the automobile industry.
Lighthouse’s Eyo is confident that Hmlet@Lumiere will attract potential buyers. He sees interest from the likes of high-net-worth individuals, family offices, private equity players and property funds.
“With a co-living operator like Hmlet in place, landlords need not have to worry about finding tenants for the individual units,” says Eyo.