Successful acquisition and re-positioning of a four-storey conservation shophouse property in the developing Tanjong Pagar area.
Acquired off-market at a discount to bank valuation
The property is located in Tanjong Pagar Road within Singapore’s Central Business District, and is in close proximity to Tanjong Pagar MRT station.
The area serves as a prominent gateway to the main financial and business areas and has seen rapid development, with numerous new hotels, residences, and offices in recent years.
Fine Grain Property anticipated that older commercial properties in the vicinity would benefit from the growth of the area, and identified 29&31 Tanjong Pagar Road as an attractive off-market prospect;
The property was owned by a trust, and the trustees were known to Fine Grain Property.
Increased rental income by 41% within one year of purchase
Fine Grain Property managed and negotiated early termination of the ground floor tenant and re-let the space to a high-quality restaurant operator. This re-letting of the ground floor space and negotiation of lease renewals increased the rental yield significantly within the first year of purchase.
Cost-effective, design-led refurbishment was carried out in the lobby and the exterior of the property to reflect the image of a high-quality boutique office.
In carrying out the value-add strategy for the property, Fine Grain Property established a good relationship with the owners of 15 neighbouring properties, and implemented a consistent refurbishment to the block, collaborating to achieve consistent décor and uplift the profile of the entire street.
Unsolicited sale to investor seeking stable income
The value-add refurbishment and overall liquidity in the Singapore real estate market led to the target exit valuation being exceeded within three years of purchase, ahead of the planned 4-6 years.
In order to crystallise the profit, Fine Grain Property put the property up for auction but sale was agreed pre-auction to a Malaysian family office investor.