Loh Lik Peng sells Wanderlust Hotel

8M Real Estate is paying S$37m for 29-room freehold property in Little India

Thu, Jul 05, 2018

WANDERLUST Hotel along Dickson Road in the Little India Conservation Area, is changing hands.

A company linked to Loh Lik Peng, founder of hotel and restaurant group Unlisted Collection, is selling the freehold four-storey conserved building for S$37 million. The building, which has a built-up area of about 15,000-16,000 sq ft, is on a 4,634 sq ft site. The buyer is 8M Real Estate, a Singapore-based privately-held property investment company.

Following the completion of the transaction in a few months, Mr Loh's Unlisted Collection will continue operating the 29-room hotel, which also has a restaurant on the ground floor.

Said 8M's managing director, Ashish Manchharam: "They are doing a good job. One of the reasons we like this property is that it is well managed, well maintained. We also like the location; it is in the Little India historic district and near the Jalan Besar MRT Station on the Downtown Line."

The area is also undergoing rejuvenation, with the redevelopment of the site of the former The Verge mall into an an integrated project that will include a retail mall and serviced residences. The project is slated for completion in the second half of 2019.

The Dickson Road acquisition is 8M's first outside Districts 1 and 2. It will now own 42 conservation properties worth about S$500 million.

Seller KMC Holdings, owned by Mr Loh's family, bought the property in 2008 for S$10.3 million from Singapore Buddhist Welfare Services.

At the time, it housed a kindergarten, an educational facility and a prayer hall, recalls Mr Loh. KMC embarked on a major renovation to convert the 1920s Art Deco style building, which was once the Hong Wen School, into a hotel, with the effort clinching an Architectural Heritage Award from the Urban Redevelopment Authority in 2011.

Among other things, the award cited the professional precision in the restoration of the intricately painted ceramic titles on the building's front facade and the classic stained glass windows at the upper storeys.

The renovation incorporated 29 hotel rooms, a new roof deck garden with a jacuzzi, and a restaurant on the ground level. Wanderlust Hotel's sale was brokered by Savills Singapore associate director of heritage buildings Simon Monteiro.

Mr Loh describes the sale of Wanderlust Hotel as a rejigging of his portfolio: "We do this once in a while to optimise value."

In 2013, KMC sold the iconic Hotel 1929 in Keong Saik Road.

Mr Loh told BT he does not plan to sell his conservation property at 31 to 37 Bukit Pasoh Road (which used to house the former New Majestic Hotel but now leased to the Straits Clan club).

Overseas, entities controlled by Mr Loh, his family or Unlisted Collection own two boutique hotels in London, and one each in Dublin (jointly owned with seasoned property investor Stanley Quek), Shanghai (also a joint venture) and Sydney.

Separately, in the CBD, 19 Hongkong Street has been put up for sale with a guide price of S$18 million. This works out to S$2,310 per square foot based on the gross floor area (GFA) of 7,792 sq ft (or S$2,036 psf after factoring in 1,050 sq ft of roof terrace area. The property is part four storeys and part six storeys.

It was extensively redeveloped at a cost of S$7 million (including differential and lease upgrading premiums paid to the state). The redevelopment was completed in 2015. Previously a four-storey shophouse building with some vacant land behind was on the site.

As the property is in the Upper Circular Road secondary settlement, the front 7.5 metres of the building had to be conserved. The owner built a six-storey back extension to maximise the 4.2 plot ratio for the commercial-zoned site. The building facadewas refurbished and extensive structural works were undertaken. A new lift, mechanical and electrical, lighting and air-conditioning systems were also installed.

The lease tenure for the site was also topped up to a fresh 99-year term starting from October 2017.

JLL is marketing the property through an expression of interest exercise that closes on Aug 8. Its associate director of capital markets, Clemence Lee, said: "Located between Clarke Quay and Boat Quay, the Hongkong Street area is a rising F&B lifestyle destination that is popular among locals, expats and tourists."

The property is also near Clarke Quay and Raffles Place MRT stations.

Mr Lee said that the psf guide price for 19 Hongkong Street is competitive vis-a-vis two recent transactions on the same street.

Last month, 9 Hongkong Street fetched S$18.8 million or S$2,513 psf on a GFA of about 7,481 sq ft. The property is also relatively newly refurbished with the lease on its site topped up to 99 years from July 2011. The deal was brokered by CBRE, which declined to comment.

In May, 6 Hongkong Street changed hands for S$13.75 million or about S$2,700-2,800 psf on the estimated existing GFA, said Mr Lee. This is an old freehold building that requires a major refurbishment or a redevelopment, he added.