BBR rides the revitalization trend, offering The Linq retail podium for sale at $136 million

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The construction on the site of the Linq at Beauty World has reached the 16th floor, according to Andrew Tan, CEO of the Singapore-listed construction and engineering company BBR Holdings. BBR Holdings owns an owner and developer for the towering 20 storey Linq which is a freehold mixed-use development that has 120 units of residential space on the top of a two-storey shopping podium. BBR Holdings is aiming to complete the project by the end of 3Q2024.

The 120 residential units within the project, located near the intersection between Jalan Jurong Kechil as well as Upper Bukit Timah Road -which were purchased at an average cost of $2,165 per square foot. On the very first day of project’s opening in November of 2020 the project was sold out in 98% all units had been occupied.

The developer did not release these strata-titled units prior to the time of launch, in order to oversee the podium following completion. However, Tan has recently changed his opinion. “Over the last year, we’ve received many unsolicited offers,” he says.

The rejuvenation process within Bukit Timah’s Beauty World- Bukit Timah area is currently in progress. One of the major factors was the opening in the form of The Reserve Residences mixed-use development that is also a transport hub that is located on the opposite end of Jalan Jurong Kechil, and bordered to the west by Jalan Anak Bukit and Upper Bukit Timah Road.

732 units Residences at The Reserve Residences launch weekend of May 27-28 witnessed 522 apartments (71%) sold at an average of $2,460 per square foot, making it the top-selling project of 2023 so far. On July 4, five96 of the units (81.4%) have been sold at a more expensive average of $2,474 per square foot.

The aspect it is The Linq is a freehold property is a further draw, according to CBRE chief executive officer of Capital Markets Clemence Lee. Lee cites Solitaire on Cecil which is a freehold Grade-A, strata office project through TE Capital Partners and LaSalle Investments situated on Cecil Street in the CBD.

In January of this year the 15 floors of offices and two retail/f&b units located on the top level of Solitaire on Cecil were sold within five months. The strata offices have gotten prices ranging from $4,100 to $4,300 per square foot. There are two retail units within the building, and the one selling for $5,400 per square foot and the other for close to $6,000 psf.

Shophouses that are freehold have been well-liked by local and foreign investors, according to CBRE’s Lee. He says that recent deals for prime leasehold leaseholds with 999 years of tenure or freehold shophouses within areas like the Amoy Street and Boat Quay region have spanned from $5,000 to $8,000 per sq ft.

With the increasing demand for commercial freehold properties, BBR has decided to offer the retail platform at The Linq. “We think this is a good opportunity as any to determine what offers we could get,” adds Tan. “During this time frame the buyer is able to ensure tenants are secured, and fitting-out work can be completed before the mall is complete and will open in the year following.”

The purchase of the retail podium located at The Linq is handled by the only marketing agency CBRE through an express of interest (EOI) exercise which will end on the 16th of August. CBRE is also appointed as the lease agent of the units.

‘High-end F&B destination’
With an 80% of all the 52 strata-titled apartments of The Linq approved for restaurant use BBR’s Tan has positioned The Linq’s stage for retail as “a luxurious F&B location”.

A further 20% of retail space will be suitable for services like a gym, medical clinics or convenience stores which will cater to the requirements of the residents of The Linq, adds CBRE’s Lee.

The strata-titled units of this retail platform will be sold together with an estimated cost of $136 million or around $4,583 per square foot, which is basing the price on the size of the strata, which is 29,676 sq feet.

“We believe there is a demand for a upscale dining enclave within the vicinity that is comparable the likes of Cuppage Terrace, Holland Village and Dempsey Hill. Robertson Quay in terms of appearance and ambience,” says Lee. “This will enhance the current retail and F&B options available in the immediate vicinity, as well as the planned Bukit V retail mall at The Reserve Residences. It will further enhance Beauty World to become a lively and exciting place to visit.”

Lee refers to the many restaurants in the area. For example Lee points out that the Bukit Timah Food and Market (built by the government in) is home to more than 80 food stalls. It is well-known for its Ah Zhen Mee and He Zhong Carrot Cake, and Xie Kee Hokkien Mee.

Just just off Upper Bukit Timah Road is Cheong Chin Nam Road. It is lined with eateries like Al-Azhar Restaurant, Boon Tong Kee Singapore, Five Star Kampung Chicken Rice & Kitchen, BBQ Box and Mongkok Dim Sum.

“The presence of these eateries indicates that the population of existing eateries is sufficient to support the establishments,” observes Lee. “BBR Holdings’ primarily F&B areas in The Linq will bring a freshness to this segment of the market.”

Accessibility to information has increased
Linq Linq is expected to benefit from improved accessibility once an integrated transportation hub has been complete. The development will include an underground connection to the Beauty World MRT Station on the Downtown Line, the Bukit V mall, and the brand new Air-conditioned Bus Interchange. Linq will also have an air-conditioned bus interchange. Linq will also include an underground connection to the upcoming Bukit Timah community Building that will be an integrated facility that includes the creation of a neighborhood clubhouse, renovated market and hawker center and an indoor sports facility with a community library, as well as the elderly facilities.

The bus interchange with air conditioning located at The Reserve Residences will be connected to the 2nd level in the 3 storey Bukit V mall, while Beauty World MRT Station will be connected underground. If it’s completed by 1Q2028 Bukit V will boast 215,280 square feet worth of space for retail. It will feature the Cold Storage supermarket, F&B products, educational centres as well as medical services.

The mall is located above The Reserve Residences are eight residential towers, as well as 160 apartments that are serviced. The project was jointly developed between Far East Organization and Sino Group The mixed-use complex is expected to be completed by the end of 1Q2028.

One MRT stop away from Beauty World can be found at King Albert Park MRT Station It will serve as an interchange point for the Downtown Line and the upcoming Cross Island Line.

In addition to increasing accessibility through the integrated transportation hub at Beauty World, the government is also introducing more homes into the Bukit Timah-BeautyWorld area to increase the vibrancy of the area.

The population currently living in Bukit Timah Planning Area Bukit Timah Area of Planning is estimated at 78,000, as per census data for the year 2020. Singapore Census of population. Condos and apartments account of 47.6% of the population as well as 42.1% living in landed housing. Thus that nearly 89% of the population lives in condos or landed homes. “The Bukit Timah area is an extremely wealthy area,” CBRE’s Lee concludes. “So it’s a good idea to build an F&B establishment that is high-end.”

Based on the latest private condo projects that have been launched in District 21 from the year 2018. Lee estimates that there will be over 3000 new condo units built in the district over the next couple of years. A majority of the new developments have already sold out.

New residential developments
URA also has sold three new Government land sales (GLS) sites zoned for residential development in Bukit Timah (District 21) as well as the adjacent Hillview region (District 23) in the last year. The site located at Dairy Farm Walk drew seven bids by the time of the auction on March 20, 2022. Sim Lian Group emerged as the winner, with a price of $347.001 million, or $980 psf for the plot. (ppr) to the site located in District 23.

One year later Sim Lian announced the brand new condominium at this site known as the Botany in Dairy Farm Walk in March 2023. Around the 54% in the apartments have been sold up to date, and the average cost hovering around $2,060 for a sf.

Then, in November of 2022, 2 more GLS sites were sold in the same area in the area — Bukit Timah Link as well as Hillview Rise. The next door neighbor next to The Linq is the GLS site located at Bukit Timah Link. It attracted five bids at end of the auction. The listed property developer Bukit Sembawang Estates took the site by submitting an offer in the amount of 200 million ($1,343 psf per ppr).

Bukit Sembawang’s site located at Bukit Timah Link could be transformed into a private condominium of 160 units as well as the developer has stated that it will likely start the project in the middle of next year.

The other site located at Hillview Rise received four bids and an alliance between Far East Organization and Sekisui House winning the site with an offer in the amount of $320.78 million ($1,024 per square foot psf) during November. The co- developers are planning to turn this Hillview Rise GLS site into an exclusive condo with 334 units. The project is scheduled to be launched in the 4th quarter of 2023.

City Developments Ltd (CDL) will open the Myst The Myst, a private condominium with 408 units off Upper Bukit Timah Road on July 8. Prices start at $1,862 per sq ft. It is the revamp of the old Tan Chong Industrial Park, which CDL acquired for $126.3 million as part of a deal signed by April 2022. The development is just a 5-minute stroll from Cashew MRT Station on the Downtown Line and three stops from Beauty World MRT Station and the integrated transportation hub.

Capital upside through revitalization
BBR’s Tan believes that the new owner for the podium that retails at The Linq will be able to reap the benefits of capital growth since the renovation is in progress. Tan recalled his experience when he stumbled upon the Goh and Goh Building which is an industrial freehold building which was put up for sale collectively in the beginning of 2017.

“At at the time, it was clear that the whole region appeared a little outdated and there was a lack of activity,” relates Tan. The malls that were nearby including Beauty World Centre and Beauty World Plaza, Bukit Timah Shopping Centre, and Bukit Timah Plaza were all constructed in the 1980s, and were a sign of their old age.

“However we were aware of the potential of the land considering the MRT station and The Bukit Timah Nature Reserve, the nature parks that are located in the area, along with the property’s freehold title,” Tan explains Tan. “We also were extremely aggressive in our price for the bid.”

BBR was awarded it the Goh & Goh Building in the course of a tender, with an offer in the amount of $101.5 million in the year 2017. It was only after acquiring the site did BBR be aware of URA’s plans to revive the Bukit Timah-Beauty World region.

“We also conducted an exercise of swapping land,” says Tan. “We swapped a portion of the En bloc site in exchange for state-owned land the front of the site to create a more consistent plot and an enticing frontage that is visible of the road. We spoke with URA who advised us in the design of our site to be a part of general master Plan for the region.”

In the year 2019’s Master Plan was revealed, BBR could be able to see the plan of the government’s overall vision for the region. “Our site is located at the very heart of the development and was the first piece of the puzzle of jigsaws.”

Gross and rental yields
CBRE’s Lee estimates the rents for the retail as well as F&B areas located at The Linq to be $25 to $30 per month for units with prominent street frontage on first level. On the second floor, rent could be anywhere from $10 to $15 per month. Therefore, the expected rent falls within the range of $20-$20 psf. If you take the price of the property as an estimate Lee thinks that the prospective buyer can earn a gross rental return around 4%.

The retail podium features an open area for events on the front. The ceiling’s two-storey height permits community-based events like dancing or yoga classes to be held in the absence of rain or storms. The building will also bring more traffic into the area, according to BBR’s Tan.

“Retail podiums are generally very tightly held and are not offered for sale,” says CBRE’s Lee. “They are desired by investment professionals.”

Because The Linq Retail podium regarded as commercial property, both foreigners and locals can buy the entire thing without having to pay an additional buyer’s stamp duty, says Lee.

“The buyer might look into strata sales of units in isolation as a way to exit at some point in the future.” Lee says. The dimensions of the units vary from 183 to 1,087 square feet. This means that the investment amount of these units is suitable for investors who are not individuals or owners of the property, he says.