[UPDATE] Space for church and former KTV club at Textile Centre for sale at $33 mil
By Cecilia Chow
/ EdgeProp Singapore |
The 25-storey Textile Centre where a strata commercial unit of 39,310 sq ft on the 7th to 9th floors is on the market for sale (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - For at least 15 years, KTV Lounge Club De Zara had co-existed alongside Hope Church at Textile Centre. Even their main entrances on the eighth floor are side by side. The glass doors into the church open into a well-lit corridor that leads to a brightly coloured auditorium, meeting rooms and event spaces with ceiling height of up to 5.3m. The door to Club De Zara opens into a dimly lit reception and a labyrinth of more than 60 private rooms, where the theme is predominantly black, gold and marble.
However, Club De Zara was one of three KTV lounges and clubs that were ordered to close for two weeks from July 13, following suspected Covid transmissions among Vietnamese social hostesses that had frequented these night spots. It has since ceased operations.
The combined strata area occupied by Hope Church and Club De Zara spans three floors – from the seventh to ninth – and totals 39,310 sq ft. It is held under a single strata title by a family office that purchased the unit 14 years ago. “The two tenants – the church and the club – were already in place when we bought the unit,” says Ng, director of investment at the family office. Over the last few years, Ng has been managing the space on behalf of his family.
One of the corridors leading to more than 60 private rooms at the former Club De Zara (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The unit is now available for sale by tender with an asking price of $33 million, with Brilliance Capital as the exclusive marketing agency. The asking price translates to $839 psf based on strata area, and $1,255 psf based on lettable area estimated at 26,285 sq ft.
“Such a big strata commercial space in a prime location is rarely available,” according to Sammi Lim, founder and executive director of Brilliance Capital. The advantage of having the entire space held under a single strata title is the opportunity for sub-division in the future to multiple tenants or buyers, she adds.
While Hope Church occupies a strata area of 9,849 sq ft on the eighth floor, Club De Zara had taken up 29,461 sq ft of strata space across three floors: 11,238 sq ft on the eighth floor; 18,169 sq ft on the mezzanine level (or ninth floor); and a private entrance on the seventh floor leading directly from the carpark, which is equivalent to 54 sq ft.
The corridors of Hope Church leading to the auditorium and various meeting rooms (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Due to Covid, the landlord had applied for, and obtained approval on behalf of Club De Zara, for a change of use to a restaurant in August last year. However, it was only for a period of two years. A kitchen was installed at the mezzanine level. The club owner had undertaken major refurbishment works in 2019. The more than 60 rooms range from typical to luxurious VIP rooms.
The lease for the church will expire sometime in 2023. Hence, the property will be sold with existing tenancy, notes Lim. The space formerly occupied by the club will be sold with vacant possession, she adds. While the church is paying an existing rental rate of $5.34 psf per month, the club had paid $8 psf per month.
Alternative uses
Lim sees opportunity for alternative uses for the 29,461 sq ft strata space previously occupied by Club De Zara. Some Chinese restaurants, for instance, hotpot restaurants, have seen an increase in demand for private rooms in this Covid era, she says. Education centres are also switching to smaller classrooms or tutorial rooms. Even co-working operators have seen a change in the way their members use space, with more flexible meeting rooms to accommodate various types of collaborative work.
One of the VIP rooms at Club De Zara (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Other users include gym, e-sports hub, media production studio, cloud kitchen or even a supermarket, reckons Lim. The convenience of the unit is enhanced by the fact that it has two entrances (from the eighth floor and carpark entrance from the seventh floor), high ceiling of up to 5.3m and ample parking in the building, she adds.
The timing of the sale is ideal as there are many new-to-market real estate buyers today, both local and foreign, adds Lim. “They are looking to park money into real estate for the longer term, and they see it as a good hedge against inflation,” she says.
Completed in 1977, the 25-storey, mixed-use Textile Centre has a total of 132 strata-titled units. The first to eighth floors are predominantly retail units, although there are some office units too. The ninth to 13th floors comprise strata office units. The 14th to 24th floors have a mix of two- and three-bedroom apartments with sizes ranging from 883 sq ft to 1,163 sq ft. The units have a 99-year lease from 1970, which means there are only 48 years remaining on the lease.
Interior of an auditorium used as a worship hall by the church with ceiling height of up to 5.3m (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Only four strata commercial units at Textile Centre changed hands this year, of which two are retail units and two are offices. The transactions of retail units range from $500,000 ($1,255 psf) for a 398 sq ft shop on the fourth level that was sold in August; to $7.28 million ($2,177 psf) for a 3,348 sq ft shop on the first level sold in July. (See: Find Singapore commercial properties with our commercial directory)
Meanwhile, office units were sold at prices ranging from $1.1 million ($1,111 psf) for a unit on the second level, to $1.24 million ($1,280 psf) for a 969 sq ft unit on the third level. Four apartments changed hands at Textile Centre this year to date. They ranged from $880,000 ($997 psf) for an 883 sq ft unit on the 16th floor, to $988,888 ($988 psf) for a 1,001 sq ft unit on the 21st floor, based on caveats lodged.
Rarity of the large floor plate
Ng says the family office had been looking to purchase a commercial property 14 years ago when they chanced upon the unit at Textile Centre. “From the outside, you probably wouldn’t have given the unit a second look,” he says. “But once you step in and see the space within, the layout and the design, especially the mezzanine level, you will realise how big the floor plate is.”
Entrance to the club premises from the carpark on the seventh floor (Photo: Samuel Isaac Chua/EdgeProp Singapore)
According to Ng, it was the rarity of the strata space that drew their attention. Over the years, the property had also been a source of steady rental income for the family office.
Textile Centre is located at Jalan Sultan, adjacent to Sultan Plaza, another strata-titled commercial development with a mix of offices and retail units. Sultan Plaza was completed sometime in the early 1980s and has a 99-year lease from 1978. Next door to it is the former Key Point, which has been redeveloped into the new mixed-use complex, City Gate, which was completed in 2018.
Stairway from seventh floor entrance to the eighth floor (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Located in prime District 7 in the Core Central Region, Textile Centre is within the Ophir-Rochor Corridor, which has been identified as a new growth area under the URA Master Plan, says Lim. “It will benefit from the ongoing rejuvenation to transform the area into a 24/7 lifestyle environment encompassing work-live-play,” she adds. Textile Centre is also about 500m walking distance from the Lavender MRT Station on the East-West Line and the Nicoll Highway MRT Station on the Circle Line.
Rejuvenation is taking place in the nearby Beach Road area, with new developments such as the up-and-coming integrated development Guoco Midtown by GuocoLand; The M, a mixed-use development by Wing Tai Holdings; and the redevelopment of Shaw Towers into a brand-new office tower.
“Ten years ago, this area wasn’t as bustling,” says Ng. “But it has great potential now.”
Textile Centre will benefit from the ongoing rejuvenation to transform the area into a 24/7 work-live-play hub (
Collective sale potential?
The owners of Textile Centre had attempted a collective sale in early 2019. The reserve price then was $652 million. Ng’s unit makes up 5.89% of the total strata area at Textile Centre, and accounts for 3.24% of its share value.
“The collective sales of mixed-use developments have been continuing, while those of residential projects had halted after the hike in ABSD (additional buyer’s stamp duty) following the property cooling measures in July 2018,” says Tan Hong Boon, executive director of JLL Singapore. However, a lot of condominium projects have restarted their collective sale process once again. For instance, Surrey Point was sold for $47.8 million in March, while the tender for Flynn Park condominium will close on Sept 9. (See: Discover insightful data of any Singapore condominium with our condo directory)
Recent mixed-use or commercial developments that have been launched for collective sale include High Street Centre at $800 million; International Plaza at a price tag of $2.7 billion; and on Sept 6, Peace Centre/Peace Mansion for $650 million with JLL as the marketing agent. The successful sale of a mixed-use commercial development so far this year was Maxwell House. It was sold en bloc for $276.8 million to a consortium made up of Chip Eng Seng, SingHaiyi and Chuan Investments in May this year.
Lim sees opportunity for alternative uses for the 29,461 sq ft strata space previously occupied by Club De Zara (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“It takes a longer time for mixed-use developments,” adds JLL’s Tan. “A lot of those that are on the market todaywere those that had started the collective sale process two years ago, but were disrupted by Covid and had asked for an extension from the authorities.”
The tender for the space at Textile Centre will close on Oct 15. Besides the traditional investors buying for rental income and owner-occupiers, there are others who are buying with the possibility of a collective sale in the future, reckons Brilliance Capital’s Lim.
Check out the latest listings near Textile Centre, City Gate, Guoco Midtown, The M, Lavender MRT Station, Nicoll Highway MRT Station
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