Aberdeen Standard Investments (ASI) has acquired a row of six adjoining shophouses along 48 to 56 Peck Seah Street for $54 million, or about $2,700 psf, in a deal concluded by JLL.
This is ASI’s first acquisition in Singapore for its global real estate portfolio. The two-storey shophouses boast a 33m street frontage, and have a gross floor area (GFA) of 19,938 sq ft. They are fully leased to institutional tenants and offer strong and stable income streams, says ASI.
Ted Roy, deputy fund manager of the global real estate portfolio, says: “This is an excellent opportunity for us to further diversify our global fund’s Asia Pacific investment footprint. We particularly like the finite supply of shophouses and the potential for the asset to benefit from Singapore’s 2019 Master Plan designed to rejuvenate the immediate vicinity.”
Roy adds,”The global fund targets direct assets between USD$25 million to USD$75 million ($34.64 million to $103.93 million) which in central Singapore really restricts you to either shophouses or strata offices. Shophouses offered overall control for the fund; the prospect of an upswing in rents for that sub sector and most importantly a well-located, well-let core asset.”
ASI holds a diversified portfolio of real estate assets across Asia Pacific, with direct assets in Australia, Korea, Japan and China. The fund also plans to grow its footprint across both real estate and private markets.
“The Global Real Estate strategy adopts a research led approach and invests into jurisdictions and markets that we believe exhibit robust occupational fundamentals. Accordingly our APAC holdings comprise a portfolio of three Australian industrial assets, which are all located in consolidated/constrained Melbourne/Sydney sub-markets, as well as an office building in the St Kilda region of Melbourne and a grade B Tokyo office,” says Roy.
“Shophouses present a uniquely Singapore purchase proposition with a diverse investor base increasingly drawn to this asset class. With each year, Singapore shophouses emerge as an increasingly more established investment asset class,” says Ting Lim, JLL’s head of Singapore capital markets.
She adds, “Driven by a limited saleable supply and a strong heritage value, a growing number of Asian and foreign investors, including developers, family offices and institutional investors, will continue to invest in this segment in 2020 and beyond.”
Separately, JLL also concluded the sale of the iconic Eu Yan Sang Building at 265 to 271 South bridge Road to 8M Real Estate, in a deal worth $54 million. The row of three-storey conservation buildings has a GFA of 19,885 sq ft, and has been on the market since July last year.