THE owner of Rio Casino in Macau, Loi Keong Kuong, and his family are buying the space leased to Cold Storage on the ground floor of the freehold Holland Road Shopping Centre, sources said.
The price, at slightly more than S$61 million, works out to S$4,976 per square foot (psf), based on the total strata area of 12,260 sq ft. The space comprises seven strata units, all of which are leased to Cold Storage under a long lease that expires in 2020.
The property is being sold by entities controlled by members of an Ng family that is said to have developed the four-storey mall in the 1970s.
CBRE brokered the sale.
When the seven units were put up for sale through an expression of interest (EOI) exercise launched in June 2014, CBRE had cited a valuation of about S$92 million, or S$7,500 psf for the property.
After the EOI exercise closed the following month, however, the owner withdrew the property from the market.
Knight Frank's executive director for investment and capital markets Mary Sai, referring to this year's price of nearly S$5,000 psf, described it as fair market value for a prime, freehold retail space sited a stone's throw from an MRT station.
Referring to 2014's S$7,500 psf valuation for the space, she said: "Two years ago, the strata retail sales market was more vibrant than it is today."
For the buyer, having Cold Storage provides immediate security of tenancy.
After the lease expires, however, there is potential for the new owner to achieve higher yield by renting out the seven strata units individually or by partitioning the space into smaller areas for leasing.
"Higher-paying tenants may be found in the F&B business, jewellery store chains or upmarket retail services," said Ms Sai.
Supermarkets typically pay low rents.
When contacted, CBRE's director of investment properties Sammi Lim confirmed brokering the transaction, but declined to comment on the buyer.
She did, however, remark that it is "extremely rare" for a row of prime, freehold, adjoining ground-floor retail units fronting the road to be available for sale in Singapore.
Last month, CBRE closed the tender for nine retail units on the second level in the same building. Those units are owned by two companies controlled by the Lim family, which used to operate Lim's Arts and Living.
The units, some of which are are adjoining, range from 237 sq ft to 732 sq ft in size and were offered for sale either collectively or on a piecemeal basis.
The guide prices of the units were between S$1.09 million and S$4.17 million; the total price tag was S$20.85 million, which works out to an average price of S$5,085 psf, based on a total strata area of 4,100 sq ft.
Ms Lim declined to comment on the outcome of the tender exercise.
Holland Road Shopping Centre is next to Holland Village MRT station and across from Raffles Holland V, a five-storey building which opened recently; it houses a medical centre and food and beverage outlets, among other offerings.
Early this year, Mr Loi, the buyer of the Cold Storage space on the ground floor of Holland Road Shopping Centre, completed the purchase of two shophouses in Pagoda Street for S$12 million and S$12.2 million, The Straits Times reported.
This article was first published on Sept 10, 2016.
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