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Overall shophouse sales in Singapore for the first half of 2018 reached about $576.2 million, exceeding annual transaction levels between 2014 and 2017, reported Forbes, citing data from Colliers International.
Given the limited stock of such properties, which can be used for offices, boutique hotels and F&B outlets, the property consultancy believes that shophouses will remain sought-after by wealthy individuals, investment firms and real estate funds.
One such investor is Ashish Manchharam, who not only grew up in a shophouse, but established an investment company in 2014 called 8M Real Estate that has acquired many of such properties.
Since its founding, 8M Real Estate has bought 43 shophouses with a combined market value of around $400 million across strategic areas such as Chinatown and in the CBD. Its most recent acquisition is Ann Siang House, which contains 20 hotel rooms and six F&B concepts.
Manchharam revealed that although the trend of popular F&B outlets seeking shophouse locations started around 10 years ago, the trend became more prevalent in recent years with restaurants branching out into other key areas in Singapore, instead of the usual venues. It’s this trend that drove Manchharam to transform older shophouses for F&B and office use.
“The key reason for this trend lies in the increased autonomy and greater control that shophouses offer. This enables operators to have their own street frontage, select their operating hours, have more flexibility in terms of layouts and ultimately create clusters which in turn drive footfall.”
With this, F&B outlets in shophouses can aesthetically compete with cookie-cutter retail mall shopfronts, noted Jac Teo, head of the business unit in KF Property Network.
“We are no longer satisfied by chain restaurants in malls. We want to visit Instagram-worthy restaurants that are different from the mainstream.”
However, there are conservation rules on what can be done to a shophouse’s façade and internal structure, leading to long and tedious renovation process, said Manchharam, adding that 8M Real Estate has a meticulous process of getting the right tenants for its shophouses.
“Prior to signing a lease with a new operator, we review brand decks, design, menus and pricing meticulously, as we believe in creating properties with staying power.”
Furthermore, 8M Real Estate plans to expand its boutique hotels with unique gastronomic attractions. One of which is a shophouse that will have 60 guest rooms on the upper level and eight F&B outlets, including a popular Spanish restaurant and speakeasy bar.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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