Portfolio of nine conservation shophouses on Desker Road-Rowell Road for sale at $66 mil

Sammi Lim, founder and executive director of Brilliance Capital, says the demand for shophouses along the Desker Road-Rowell Road stretch is growing from both businesses and investors. “Given the high prices of CBD shophouses, buyers are increasingly considering city-fringe areas with much stronger growth potential,” she says. This demand is now being met with a portfolio of nine freehold conservation shophouses along Desker Road and Rowell Road, which is up for sale through a public tender that will close on Aug 15.

The shophouses, each with individual land titles, are zoned for commercial use under the URA 2019 Master Plan and fall within the Little India Conservation Area in District 8. The portfolio, which has a mix of two-storey and two-storey-with-attic shophouses, occupies a total land area of 10,557 sq ft and a built-up area of 22,898 sq ft. The seller, a real estate investment firm linked to a family office, is seeking to divest the assets as part of its capital recycling strategy and are selling the shophouses with a guide price of $66 million, or $2,882 psf on the built-up area.

The portfolio recently underwent extensive refurbishments and is currently fully leased out, with rental yields of around 2%. The unique tenant mix includes construction contractors, cat hotels, a vegetarian restaurant, art gallery, ceramic art studio, cat cafe, an artisanal gelato shop and a martial arts-themed cafe.

Lim see the portfolio’s guide price of $2,882 psf as an attractive price-point for a collection of freehold commercial assets in a prime city-fringe location. She expects interest from various investors, including local and overseas corporates, institutional funds, private funds, family offices and ultra-high-net-worth individuals. “The buyer can choose to hold the property for the long term, capitalising on the portfolio’s capital growth and stable rental yield while also retaining the option of selling the shophouses collectively or individually,” she adds.

Located less than a 10-minute walk from the Jalan Besar (Downtown Line) and Farrer Park (North-East Line) MRT Stations, the Desker Road-Rowell Road stretch has seen an influx of new owners and tenants in recent years, with 27 shophouse transactions on the two streets since January 2021. The most recent transaction occurred last month when a shophouse at 21 Rowell Road fetched $5.2 million.

Lim believes that Desker Road and Rowell Road are currently on a trajectory similar to the transformation that has taken place in other conservation shophouse streets, such as Amoy Street in Chinatown and Tras Street in Tanjong Pagar. “This is a dynamic neighbourhood that is being increasingly sought after as it becomes a thriving cultural, culinary and commercial destination,” she says.

The incoming buyer of the portfolio would reap the rewards of a first-mover advantage that allows them to tap into the area’s full potential for capital and rental appreciation. “This is an opportunity to invest in one of Singapore’s most desirable and evolving neighbourhoods,” Lim adds.

On Desker Road and Rowell Road, the no-frills eatery Usman’s has been doing business for over 20 years, amidst the activity of pedestrians flocking to various businesses – from wholesale retailers selling food and grocery items, to trendy establishments like Japanese restaurant Ikigai Yakitori and sourdough pizza shop Goldenroy.

The area falls within Little India Conservation Area and underwent significant transformation over the last decade, with the government cracking down on illegal brothels and the pandemic further dampening vice activities. Ultimately, much of the area’s notorious reputation has been eradicated, and these two streets have seen an influx of high-end eateries and cafes.

Lim believes that the potential of this unique portfolio — and thus that of the area — is clear for investors, offering an attractive price-point for a collection of freehold commercial assets. The future buyer of the portfolio would benefit from the growing demand for shophouses in city-fringe locations, while exploring the possibilities of the portfolio’s capital growth, stable rental yield, and even potential accommodation offerings.