Frasers to sell Zouk warehouse & serviced apt in Jiak Kim St

FRASERS is said to be in advanced talks for a sale of the 72-unit property with serviced apartments and three preserved warehouses on the Singapore River.
The potential buyer is believed to be an entity connected with Tuan Sing Holdings. The Business Times is aware that they have been conducting exclusive due diligence on a potential acquisition at slightly over S$130m.

The asset consists of the four-storey Fraser Residence River Promenade block and the three godowns (or warehouses) that were home to the popular Zouk nightclub for over 25 years before it was relocated to Clarke Quay at the end of 2016.

The serviced apartment and warehouses form part of an integrated development, which also includes Riviere, a luxury residential project with 455 units. It received its Temporary Occupation Permit(TOP) in January 2023. The entire project was completed in April.

BT believes that 72 serviced residences, three warehouses and a common building are all held together as a strata unit.

Frasers Property designed and developed the project for a 99-year leasehold in Jiak Kim Street. The site was acquired in a December 2017 Urban Redevelopment Authority auction.

Its winning offer of S$955.4million translated to S$1,732.55per square foot per plot, only 0.6 per cent higher than the second-highest offering from Hong Leong Holdings.

A total of 10 bids were received. The site’s lease is only for about 93 more years.

Fraser Residence River Promenade opened its doors to the public in September after receiving its TOP award in May.

Brewerkz operates Jiak Kim House in one of the warehouses. The restaurant is a modern Asian-inspired cuisine. According to Frasers Property’s latest annual report, the second warehouse was designed as a multi-purpose space for coworking or hosting events. The third warehouse acts as the front of house and reception area for Fraser Residence River Promenade.

Some market observers said that it was difficult to determine the true value of the storage facilities because only part is currently producing income. There are also specific uses for the storage facilities.

The Straits Times published a report in January that all 72 serviced apartment units have kitchenettes. The size of the units ranges from 258 sq. ft. for studio units up to 516 sq. ft. for one-bedroom apartments.

On the basis of just 72 serviced apartments at a cost of S$130m, that works out to S$1.8m per key. According to some estimates, this net yield is around 3 percent.

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Fraser Residence River Promenade has a similar pricing structure to freehold hotels. It is also located in a prime location, near Havelock MRT on the Thomson-East Coast Line. The number of serviced apartment is also a possibility.

The sale is understood to have been brokered by Savills Singapore, which marketed the property through an expression-of-interest exercise that closed in late March.

Frasers Property has signed a contract to sell its 313 room hotel Capri By Fraser in Changi City to a group of Atelier, TPG Angelo Gordon & Far East Consortium International for S$170million.

The hotel is located near the Expo MRT station, and Singapore Expo.


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