Boutique hotel in Kampong Glam for sale
A BOUTIQUE hotel - comprising three shophouses along Jalan Klapa, off Victoria Street in the Kampong Glam Conservation Area - has been put up for sale with an indicative pricing of $17-18 million.
Located at 9, 11 and 15 Jalan Klapa, the shophouses are on a total land area of 4,275 sq ft. The site has a balance lease term of about 92 years and the gross floor area is estimated at 7,911 sq ft.
The site is zoned for commercial use but is permanently approved for hotel use. The shophouses have 15 themed rooms (with an average size of around 215 sq ft) spanning two storeys and a mezzanine level, a cafe lounge and a small pool.
The indicative pricing translates to a net yield of around 2-3 per cent, based on the current income stream from rooms as well as food and beverage operations.
Operating as The Ardennes Hotel, the hotel's occupancy rate averages around 70 per cent, while the average room rate is about $200 per night.
Cushman & Wakefield, the sole marketing agent for the property, is conducting an expression of interest exercise for the property that will close on July 17.
The property is owned by a company controlled by a group of private investors who bought the shophouses four years ago and converted them into the boutique hotel that it operates.
The property is being sold with vacant possession. The new owner could continue to operate it as a hotel or appoint an external party to operate the hotel, said Shaun Poh, executive director of capital markets at Cushman & Wakefield.
"Despite the current overall property market slowdown as a result of the total debt servicing ratio framework introduced a year ago, conservation commercial shophouses - especially those with approved hotel use - remain an attractive investment option in view of their limited supply," he said.
Recently, the Urban Redevelopment Authority has become stricter in approving the use of shophouses as hotels, he added.
Meanwhile, those keen on shophouses in the Little India Conservation Area may want to check out three adjoining properties at 2, 4 and 6 Dunlop Street. The 999-year leasehold properties, which are zoned for commercial use, are on 2,475 sq ft of land area and have about 6,000 sq ft gross floor area.
The indicative price is $9.5 million.
JLL, the exclusive marketing agent for the sale, is conducting an expression of interest exercise that will close on July 10. The property is to be sold on vacant possession.