Frasers Property in talks to sell serviced apartments, former Zouk warehouses in Jiak Kim Street, say sources

An entity linked to Tuan Sing Holdings, said to be the prospective buyer, is looking at a price just above S$130 million

May 9, 2024

FRASERS Property is understood to be in advanced negotiations for a potential sale of its 72-unit serviced-apartment property and three conserved warehouses along the Singapore River.

An entity linked to Tuan Sing Holdings is tipped as the prospective buyer. The Business Times understands that it has been doing exclusive due diligence for a potential purchase at slightly above S$130 million.

The asset comprises the four-storey block of serviced apartments named Fraser Residence River Promenade and the three warehouses, or godowns, which housed the popular Zouk nightspot for about 25 years until it moved to Clarke Quay in late 2016.

The serviced apartments and warehouses are part of a development that also includes the Riviere, a 455-unit high-end residential project that received its Temporary Occupation Permit (TOP) in January 2023. It was fully sold in April that year.

The 72 serviced residences and three warehouses are held as a single strata unit in the development, BT understands.

Frasers Property developed the project on a 99-year leasehold site in Jiak Kim Street, which it clinched in an Urban Redevelopment Authority tender that closed in December 2017.

Its winning bid of S$955.4 million translated to S$1,732.55 per square foot per plot ratio, just 0.6 per cent above the second-highest bid from Hong Leong Holdings and Hong Realty.

The tender drew a total of 10 bids. The site has about 93 years left on its lease.

Fraser Residence River Promenade received its TOP in May last year and opened its doors in September.

One of the three warehouses is leased to Brewerkz, which operates Jiak Kim House, a modern Asian cuisine restaurant, in the space. The second warehouse has been designed as a versatile space suitable for coworking and hosting of events, and the third warehouse serves as the front-of-house and reception for Fraser Residence River Promenade, according to Frasers Property’s latest annual report.

Some market watchers said it is difficult to determine the value of the warehouses, because only part of the warehouse space is currently generating income; there are also specified uses for the warehouses.

All 72 serviced apartments have kitchenettes and range from 258 sq ft for the studio units to 516 sq ft for the one-bedroom units, The Straits Times reported in January.

Based on just the 72 serviced apartments, a price of S$130 million works out to S$1.8 million per key. And by some estimates, the net yield is about 3 per cent.

While such pricing is more akin to that for freehold hotels in Singapore, Fraser Residence River Promenade is attractively located; it fronts the Singapore River and is near Havelock MRT station on the Thomson-East Coast Line. There is also potential to increase the number of serviced apartments.

The sale is understood to have been brokered by Savills Singapore, which marketed the property through an expression-of-interest exercise that closed in late March.

In the first quarter of this year, Frasers Property inked a deal to sell the 313-room hotel Capri by Fraser, Changi City, for about S$170 million to a consortium comprising Atelier Capital Partners, TPG Angelo Gordon and Far East Consortium International.

The hotel, part of an integrated project that was developed on a site with about 45 years left on its lease, is a stone’s throw from the Expo MRT station and the Singapore Expo.

https://www.businesstimes.com.sg/pro...et-say-sources