Freehold conservation shophouse offered on Kitchener Street for $5 mil estimated price

Aaron Wan, a senior group director at PropNex, is familiar with acting as a broker in property transactions. He purchased a two-storey conservation storehouse on August 23. The 1,440 square foot freehold shophouse is located on Jalan Besar's 147 Kitchener Road.

It is located close to City Square Mall, Farrer Park MRT Station on the North East Line, Parkroyal on Kitchener Road, and Mustafa Centre.

Canninghill Piers top date upon completion of Canninghill Piers, CDL-CapitaLand will own the commercial and residential components while 192 units of serviced residence with a hotel license will be under Ascott Reit.

Kitchener Road is home to many notable restaurants, including Hillman Restaurant which serves traditional home-cooked zichar-style food as well as Putien Chinese Restaurant.

The Urban Redevelopment Authority (URA), has granted the shophouse a permanent license to allow it to only house food and drink (F&B).

Wan refused to disclose the exact cost of the shophouse. However, he has shared that he paid $5 million or $3,472.22 per square foot for the property.

Wan claims that he bought the shophouse from the widow of the owner, who was the first to see it listed.

The couple, along with their wife, have been searching for a shophouse to buy but have not yet found the "right one".

"The property is licensed for F&B tenants on its first floor. It is richly populated with history and culture and is in a prominent and outstanding location. He says that there was nothing more to be asked for.

It is believed that the shophouse was built in 1920. The shophouse has an elegant facade and spiral stairs that lead up to a rooftop terrace.

The maximum plot ratio is 3.0. There are options to extend the property.

Wan explains that shophouses in the vicinity have the ability to increase their rear areas to six floors. This is more than a pair of nearby shophouses.

Zen Fut Sai Kai was once the home of this shophouse, one of Singapore's oldest remaining Chinese vegetarian restaurants.

The original opening of the restaurant was in 1953. It is known for its Cantonese-style cuisine and traditional decor.

After 64 years of operation, the family decided to close down the business in September 2017. The second-generation owner had died earlier in the year.

The first floor unit was leased to Thai Goldmine Kitchen for two years by the widow of the owner between 2017 and 2018. Two years later, the unit was leased to Ponnusamy Indian Restaurant.

Ponnusamy Restaurant owners decided to end their two-year lease this year.

"The property is licensed for F&B tenants on its first floor. It is richly populated with history and culture and is in a prominent and outstanding location. He says that there was nothing more to be asked for.

Wan finds the area to be a good place to do business because of its proximity to City Square Mall. However, the space was also a significant part of his childhood years.

"I grew-up attending Saint Andrew's School (Secondary), just two stops from Potong Pasir MRT. My friends and I used to frequent City Square Mall when we were younger. The shophouse is directly in front of the mall. Customers who wish to eat at any future restaurant in the area will find parking easy. He also mentioned that Dhoby Guaut is only two stops away for those who don’t drive."

Plans for the property

Wan stated that he will give the property a quick clean-up with a new coat of paint. But nothing more.

He says, "We are already in a midst of speaking to contractors."

"We will also be repainting the property in neutral or basic colours, as permitted by the URA. He says that off-white is a popular choice to modernize the property's look.

Wan will also keep the structure of the building intact for the moment.

"We have the potential for maximising the 3.0 plot ratio, like our neighbours. But that's not in their plans right now."

Although he hasn't yet listed the property, he said he would be looking to find new tenants shortly, probably around September.

He says, "We are currently sharing our network with our friends to see what they would like to do to grow their business or start a new F&B business."

The couple plans to lease the property as a long-term investment.

"We expect a monthly rent range of $10,000 to $12,000 on the ground floor. The second floor could be used as an office by me and my team. He suggests that we might also rent it out to a gym, yoga, or dance studio for $4,000-5,000."

They are also open to the possibility of selling the property if the right offer is made.

He says, "We aren't actually looking to sell as we don't have cash at the moment...[but] an amount that we would consider would probably be around $8 million."

Wan stated that the shophouse is only for F&B tenants. He hopes to find a tenant who can operate here for many more years.

He says, "We hope that this property can become an iconic spot both for locals and tourists alike... such as a bistro that sells alcohol, a upscale Chinese restaurant or a chic cafe that serves good Western brunches."

It would attract employees from nearby offices such as City Square, Centrium, and ARC 380. Because we are the only property with a cafe or bistro of this nature on this street, we are certain that our plans will attract large crowds.

A portfolio of shophouses

Wan said that he plans to purchase "at least" one more conservation shophouses that have been F&B approved. This is especially true in the District 1 and 2, areas.

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

We are investors and we look at capital appreciation. He says that while we want to see capital appreciation, we also want rental yield from our purchases.

The couple are also looking at shophouses in Districts 7, 15 and 15.

He says that even though the property was purchased in District 8, it is situated along Kitchener Road. This is where international tourists are more likely to visit. He adds that District 8 also includes Jalan Besar's main street, where famous restaurants like Swee Choon or Beach Road Scissor Cut Curry Rice can be found.

Wan states that shophouses are not what the couple is interested in. They are more rare and highly sought-after than funds, family offices, and wealthy individuals (HNWIs) from overseas.

He says that these shophouses are a symbol of nostalgia for Singaporeans and a desire to own something from the past, back when Singapore was a small fishing village.