IndoChine’s Michael Ma to sell Club Street shophouses for $50 mil

/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - These days, Michael Ma, the group CEO of IndoChine Group which operates bars, restaurants and hotel resorts, prefers to be known simply as “The Dude”. Some of his restaurants have suggestive names too, like WTF (in this case, for “wine, tapas, friends”) at Club Street and Lorong Mambong in Holland Village. Over the years, IndoChine has been at the forefront of the upscale bar and restaurant business, and his interests has extended to Lotus Limousines (stretch limousines for hire) in Singapore and a resort and villas in Phuket, Thailand.
Ma: For me, as a trader before, I’m not emotional about [selling the shophouses]. Life is short. It’s about putting things in perspective (Photo: Albert Chua/EdgeProp Singapore)
Ma has created innovative F&B concepts in places such as IndoChine at Asian Civilisation Museum, Forbidden City at Clarke Quay, IndoChine@CHIJMES and Supertree by IndoChine at Gardens by the Bay. He has closed some too, the latest being the IndoChine at Supertree, which shut at the end of last year to make way for an observation deck. His portfolio today includes IndoChine@CHIJMES, WTF on Club Street and Lorong Mambong as well as Savanh Bistro and Lounge on Club Street. “Twenty-one years in the F&B game is a long time,” muses Ma.
In fact, the original IndoChine restaurant opened at 47 Club Street 21 years ago. In June 2001, he bought the four-storey shophouse for $3.6 million ($523 psf). The shophouse sits on a land area of 1,884 sq ft with a 999-year lease; and has a built-up area of 6,889 sq ft. It’s among the biggest on Club Street. Today, it is Savanh Bistro and Lounge. “I bought this first building on Club Street and started IndoChine,” relates Ma. “And I expanded from there.”
From Singapore, he then ventured into Malaysia, India, Indonesia, and even Hamburg in Germany at one point.
The exterior of the four-storey shophouse at 47 Club Street, which is the original IndoChine and the adjacent three-storey 49 Club Street (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Change in perspective

After buying the shophouse at 47 Club Street for the flagship IndoChine restaurant, Ma paid $5.5 million ($1,085 psf) for the neighbouring shophouse at 49 Club Street in July 2009. The three-storey shophouse sits on a land area of 2,068 sq ft, and has a floor area of 5,070 sq ft. After refurbishing the property, he launched it as WTF at Club Street. “I love these conservation shophouses,” says Ma. “I’ve looked at hundreds over the years.” Besides those at Club Street, Ma also purchased three conservation shophouses at Tanjong Katong in the east.
While the Savanh Bistro and Lounge and WTF at Club Street have reopened since June 19 after Singapore’s Covid-19 “circuit breaker”, the WTF at Lorong Mambong has not resumed business yet. Unlike the shophouses at Club Street, the one at Lorong Mambong is tenanted and IndoChine has been there for more than 20 years. “We have a great relationship with our landlord,” says Ma. “But due to this Covid situation, the 10.30pm closing time in Phase Two is too early. A lot of people still go out for dinner at 7pm or 8pm, and they want to have a drink afterwards. The government is doing a great job, but the closing time ought to be 12am, not 10.30pm.”
At the Club Street outlets, Ma even has the IndoChine brand of hand sanitisers. He has had UV lights installed in the air-conditioning and also increased the number of fans in the al fresco area. He is also very concerned about cleanliness, and made sure that his staff wiped down the tables, chairs and surfaces with Dettol. And when they could not find hand sanitisers in the early days of the outbreak, he went to Phuket and came back with a 30litre bottle of hand sanitiser before the lockdown. “I told all my staff to bring a 200ml bottle each and gave all of them free hand sanitiser,” he says. He points to his Facebook post from Feb 6, “See, I put Dettol on a wet hanky and put it in a Glad zipper storage bag for each of my kids to take to school”.
Ma attributes his vigilance and handling of Covid-19 to his days as a commodities trader with Wilmar International some 26 years ago. He was trading PKE (palm kernel expeller), a by-product of palm oil extraction and widely used for animal feed. In the late 1990s, it was the “mad cow disease” in the UK and Europe, then SARS (Severe Acute Respiratory Syndrome) in 2003, the swine flu or H1N1 in 2009 and MERS (Middle East respiratory syndrome-related coronavirus) in 2012. “I did a lot of research into these microbes,” he says.
After Wilmar, he joined ADM or Archer-Daniels-Midland Co., a US global food processing and commodities trading company, where he was the general manager for Southeast Asia. “We were in the business of providing animal feed — for fish, to chickens and cows,” says Ma.
He then ventured into the F&B business simply because, “I love drinking, and I love socialising,” says Ma. “In a way, I’m still in the commodities business — selling beer, vodka and whiskey.”
The interior of the WTF at 49 Club Street (Photo: Samuel Isaac Chua/EdgeProp Singapore)

From clubbing to hobby farming

Before he had children, Ma says he used to go clubbing until the wee hours of the morning, going to bed only at 5am or 6am, and waking up at noon or 1pm. “You miss half the day,” he says. Since he took up polo, his lifestyle has undergone a complete change. “I get up at 7am, and I’m riding a horse by 7.30 or 8am, and I’m feeling tired by noon, but it’s good for your health,” he says. “When I was clubbing, I smoked too much.”
Now that he has four children, Ma has mellowed too. “I’m turning 53 this year,” he says. Before the circuit breaker, he had a half court installed in his backyard so he can play basketball with his 14½-year-old son. He also started a hydroponic garden on the rooftop of his home during the circuit breaker. “I’m growing basil, lettuce and other herbs and vegetables,” he adds. “I’m a hobby farmer.”
Ma also ventured into resort development and management about 14 years ago. IndoChine Resort and Villas is located on a hillside overlooking Kalim Bay and just five-minutes away from Patong Beach in Phuket, Thailand. He reckons there are about 200 rooms in the resort, with a combination of villas, apartments, suites and an 80-room boutique hotel. The villas and apartments are for sale but the owners can put them back in the rental pool to be managed by IndoChine.
“It appeals to a lot of foreigners who want to buy a second home there — those from the US, Canada, Germany,” says Ma. “Buying a second home in Phuket also means they are exempt from paying annual property or council tax.”
When China went into lockdown during the Covid-19 outbreak, some of the mainland Chinese tourists who were holidaying in Phuket and staying at IndoChine Resort decided to extend their stay. Some even explored buying a property. “For US$1 million, you can have a five-bedroom villa with a swimming pool and overlooking the beach,” says Ma.
The interior of Savanh Bistro & Lounge, which was also where the flagship IndoChine restaurant was located (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Returning to his roots

Ma says he is returning to his roots. His father, Somsak Ma, is an ethnic Chinese Teochew Thai who married his mother, Chou Ma, a Laotian and had settled in Vientiane in Laos. Ma, the fourth of five children, was born there. His father was a wealthy businessman and one of the biggest pig farmers in Laos. His business interests included brewing whiskey. But when the communists took over the country in 1975, the family fled to Thailand and then settled down in Sydney, Australia.
In Australia, Ma’s father started a shop selling Asian foodstuffs. “The shop was about the size of this Club Street shophouse,” remembers Ma. From running a small shop, he ventured into the supermarket business and eventually became a shopping mall developer.
And that is what Ma aspires to be: a developer, like his father was. However, given his love for the beach, he is gravitating towards developing sites near the beach, similar to the resort he has at Phuket. Over the past three years, he has been accumulating land in Phuket, and to date, he has about 50ha or 500,000 sq m (5.38 million sq ft). “I want to expand into the sub-division game, and sell land to different developers to build a mall, retirement housing, hotels, residences, villas,” he says. “I want to develop a Sentosa Cove.”
While Singapore will continue to remain his home, Ma wants to expand his development and resort business in the region. Beyond Phuket, he is considering Maldives and Sri Lanka in the future.
As much as he loves shophouses, he wants to liquidate some of his assets here in order to reinvest in land in Thailand. As such, he is looking to sell his pair of shophouses at 47 and 49 Club Street at a price tag of $50 million ($4,181 psf).
The sale of the shophouse at 64 Club Street for $21.8 million ($3,880 psf) in September 2018 created a buzz in the area (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Club Street appeal

Alvin Choo, division director for investment sales and affluent markets at ERA Realty, and Simon Monteiro, senior associate marketing director of List Sotheby’s International Realty, have been appointed joint marketing agents for the properties at Club Street.
“In this cluster of shophouses along Club Street, the shophouses narrow as you go down the road,” says Choo. “This pair of shophouses at 47 and 49 Club Street have a wide frontage and are very deep, with a combined floor area of 11,959 sq ft.”
Choo points to the opposite side of Club Street where another pair of shophouses are also on the market for sale. The two shophouses 44 and 46 Club Street a combined land area of 2,387 sq ft and built-up area of 6,208 sq ft. The asking price is in the range of $24 million to $25 million, or $3,866 to $4,027 psf, according to Cushman & Wakefield, the marketing agency.
“Typically, a pair of shophouses or those with larger floor area with a wide frontage can attract better tenants, especially F&B operators,” says Shaun Poh, Cushman & Wakefield head of capital markets. “But investors are staying on the sidelines for now.”
One street away is Ann Siang Road where two conservation shophouses located opposite each other are on the market for sale last month, with Knight Frank as the marketing agency: the two-storey shophouse with attic at 13 Ann Siang Road has a 999-year leasehold site of 1,250 sq ft and built-up area of 2,468 sq ft. The property has a guide price of $8.5 million ($3,444 psf). Nearby, 18 Ann Siang Road is a three-storey shophouse sitting on a 999-year leasehold site of 1,367 sq ft and built-up area of 4,326 sq ft. The ground floor of the shophouse comes with approval for F&B use and is currently tenanted to Tok Tok Indonesian soup house, with a kitchen in the basement. The asking price for the property at 18 Ann Siang Road is $13 million ($3,005 psf).
Meanwhile, the latest caveat lodged on Club Street was for No. 89, a three-storey shophouse at $5.8 million in July.
In January 2019, another shophouse at 87 Club Street was sold for $17.2 million. The three-storey shophouse has a built-up area of 5,163 sq ft and sits on a 999-year leasehold land area of 1,991 sq ft. The price translates to about $3,331 psf.
Monteiro: The Club Street location near Raffles Place and the CBD is ideal for wealth management or fund management firms that offer complementary services to financial institutions. Family offices are also on the lookout for such assets (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Trophy asset, legacy planning

“The Club Street location near Raffles Place and the CBD is ideal for wealth management or fund management firms that offer complementary services to financial institutions,” says Monteiro. “Family offices are also on the lookout for such assets.”
Given the 999-year lease and the District 1 address, Monteiro also believes the Club Street shophouses will appeal to high net worth investors who are buying for their children as part of their legacy planning. He sees the two shophouses at Club Street appealing to those looking for a property that can be turned into a private club to entertain friends, he adds.
The size and the prominence of the two shophouses will appeal to those on the hunt for trophy assets too. “The ultra-high net worth individuals who are in business may also see this as a good opportunity to buy as a flagship landmark for their identity and branding,” Choo adds.
Choo: Properties like that do not come by very often. This is a good opportunity to secure such an asset, especially one with F&B use, which provides the highest rental (Photo: Albert Chua/EdgeProp Singapore)
Being zoned for full commercial use, these two conservation shophouses make good long-term investments. “Properties like that do not come by very often,” says Choo. “This is a good opportunity to secure such an asset, especially one with F&B use, which provides the highest rental.”
Adding to the excitement on Club Street is Worldwide Hotels’ record bid of $562.2 million ($2,148.5 psf per plot ratio or ppr) for the Government Land Sales hotel development site in January 2019. Worldwide Hotels, which is the holding company of Hotel 81 founder, Choo Chong Ngen, intends to build a hotel of over 900 rooms on the site.
But it was the sale of 64 Club Street for $21.8 million ($3,880 psf) in September 2018 that created a buzz in the area. The two-storey conservation shophouse was fully restored and came with full F&B provision. “Since then, I’ve had property agents telling me I can sell mine for $4,100 to $4,200 psf,” says Ma.
Even though the two conservation shophouses on 47 and 49 Club Street were assets that he has held for more than a decade, he believes it’s time to let them go. “As I used to be a trader, I’m not emotional about it,” says Ma. “Life is short. It’s about putting things in perspective.”
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