A family office and low-profile boutique developer, AW & Sons Capital, has paid S$39 million for ten contiguous freehold shophouses located on Teck Chye Terrace.
The company presently possesses the last five shophouses in that particular row.
In accordance with the 2019 Master Plan of the Urban Redevelopment Authority, all fifteen shophouses are situated on residentially zoned land. 3.0 is the plot ratio, which is the utmost aggregate floor area to land area ratio.
It is widely believed that Aw & Sons Capital is contemplating the transformation of the fifteen shophouses in the entire block into a co-living or serviced apartment complex.
The cost of its most recent acquisition, Nos. 19 to 37 Teck Chye Terrace, is equivalent to an estimated S$1,008 per square foot per plot ratio, development charge included. This amount is due to the state.
The sale of the shophouses was conducted by four individuals.
The two-story shophouses are presently authorised for residential use on the second floor and commercial use on the first floor, according to Cushman & Wakefield (C&W), the intermediaries of the private treaty transaction that facilitated the sale.
The ten units, situated on 17,644 square feet of land, are entirely leased, with tenancies expiring at various points through 2022.
The street-level units are predominantly occupied by establishments that serve food and beverages, while the residences are situated on the upper levels.
As far as The Business Times is aware, the current annual rental income of the ten shophouses represents a gross yield of approximately 3.3% on the purchase price.
Aw & Sons Capital, according to C&W, is presented with the choice between retaining the ten shop-houses as an investment property (granted their full leases) or redeveloping the land for an entirely new residential development.
Reportedly, the boutique developer acquired the five adjacent shophouses (Nos. 9 to 17) for S$14.63 million in 2015.
The combined land area for the 15 shophouses could exceed 40,000 square feet if the company obtained state approval to purchase five remnant land parcels (approximately 12,500 square feet in total) adjacent to the property.
The redevelopment would yield a gross floor area that is marginally greater than 100,000 square feet, according to C&W.
Teck Chye Terrace is in close proximity to the Heartland Mall-Kovan, Kovan MRT station, Serangoon MRT interchange station, and Nex mall.
Developers continue to seek residential redevelopment sites, particularly those in close proximity to suburban centres and major transportation hubs, according to C&W. Such neighbourhoods continue to be extremely desirable for both owner-occupants and investors.
Shaun Poh at C&W, stated, “Subject to authority approval, the redevelopment could also potentially be converted into serviced apartments or co-living units.”
Considering the location’s proximity to several international schools (International French School, Stamford American International School, DPS International School, and Hillside World Academy) and the scarcity of serviced apartments and co-living units in the vicinity, he predicted that “thriving demand” would exist for such lodgings.
Aw Chye Wee and his son Josh Hu oversee Aw & Sons Capital, which falls within the purview of the Aw & Sons Group. The Aw & Sons Group initially developed properties in Jervois Mansions and Nassimville, two of Singapore’s most prestigious neighbourhoods.
The Offshore, a commercial property situated along North Canal Road, and Hotel Soloha (previously referred to as Chinatown Hotel), a newly established boutique hotel in the Keong Saik district with an artistic focus, are among the properties currently in its portfolio.
Aw Kim Chen, the senior Aw’s father, established Aw & Sons Group by expanding the original rubber business into a real estate investment firm.