Woodlands Memorial: Funeral parlours as an alternative real estate investment
By Cecilia Chow
/ EdgeProp Singapore |
Woodlands Memorial, Singapore’s first purpose-built funeral parlour and columbarium complex, opened last month (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - Woodlands Memorial, Singapore’s largest purpose-built funeral parlour, began operations last month. Located within Woodlands Industrial Park E8, the funeral complex stands nine storeys tall with a built-up area of 107,705 sq ft. The property sits on a land area of 53,850 sq ft with a 30-year lease.
Within the complex are three levels of parking, three levels of funeral parlours and two levels of columbarium facilities. It also houses one of Singapore’s most extensive embalming facilities and shops offering funerary-related services. “It’s the first purpose-built integrated facility with a funeral parlour and columbarium,” says Jason Poh, CEO of Woodlands Memorial.
It is also the first of four dedicated funeral parlour sites that the National Environment Agency (NEA) will launch over the next decade. This is in anticipation of the growing demand for after-death facilities and services as the population of Singapore ages, according to NEA in January 2019.
One of the columbarium floors. When operational in June, there will be a total of 15,000 niches (Photo: Woodlands Memorial)
HDB launched the land parcel for a funeral parlour at Woodlands Industrial Park E8 in July 2020. Poh’s Duo Land submitted an auspicious bid of $12.888 million and emerged at the top of five bids at the close of the tender in early November 2020. Its winning land bid translated to about $120 psf per plot ratio, based on the maximum gross floor area. (Find HDB flats for rent or sale with our Singapore HDB directory)
Poh declines to divulge the amount spent on the construction of the complex. However, there was “a cost overrun of 40% from our original projections due to the cost impact of Covid”, he says. Poh estimates that it will take between 15 and 18 years to break even on the project.
Behind Duo Land and Woodlands Memorial are Poh and his brother, Melvin, the founder of Fission Group and joint developer with Yi Kai Group for Alexis on Alexandra Road.
The Poh brothers are also co-founders of real estate development firm Centra Group of Companies. A decade ago, the group developed boutique apartment projects such as Centra Loft, Centra Suites and Centra Residences in the city-fringe areas of Geylang and Ang Mo Kio before progressing to houses, including Good Class Bungalows. In 2019, the group had a landbank of 10 landed property sites in prime Districts 9, 10 and 11, estimated at nearly $100 million in gross development value.
Poh: From a real estate investment point of view, we have been considering a few options to invest in this thematically important and growing sector (Photo: Albert Chua/EdgeProp Singapore)
Extension of real estate business
While the funeral parlour business is a separate entity, it is an extension of the group’s real estate business. “Singapore is an ageing society,” says Poh. “From a real estate investment point of view, we have been considering a few options to invest in this thematically important and growing sector.”
Some of the options the brothers considered were nursing homes and homes for the elderly. “We came across this opportunity when the land tender came up, and we felt that funeral parlours and columbarium sales were a good option,” he adds. “From a labour force and management point of view, funeral parlours and columbariums are easier to manage than nursing homes or homes for the aged.”
According to Poh, the supply of funeral parlours is also limited as “the use is sensitive and unlikely to be easily approved and allowed by URA”. Hence, NEA has carefully selected the four sites away from residential developments. For instance, Woodlands Memorial is located within Woodlands Industrial Park and is the first of these sites to be awarded and built.
Landscaped garden outside the columbarium (Photo: Woodlands Memorial)
The other three sites are at: Ang Mo Kio Street 63; in the industrial area along Bukit Batok Street 23; and along Mandai Road (near the existing Mandai Crematorium and Columbarium).
According to the Singapore Department of Statistics, the number of resident deaths was 16,013 in 2009. Last year, the number climbed to 25,532. NEA has projected that the number of resident deaths should increase to 40,000 by 2040, with demand for wake spaces expected to increase in tandem. “Hence, the government needs to plan for such essential facilities,” says the agency.
“The death rate in Singapore has risen over the past decade in line with both an increase in population size and ageing,” says Nicholas Mak, an independent property market veteran.
‘A mixed-use development’
Mak has done a consultancy study on the funeral parlour and columbarium business and likens it to a mixed-use development with apartment blocks on top of a mall. “When you sell the apartments above the mall, it’s like selling niches; you will receive the sales revenue upfront,” he says. “And when you rent out the wake halls, it’s like a landlord renting out the commercial units in the mall.”
Hence, the two primary sources of income are rental income from the wake halls and other related services; as well as the sale of niches. “Depending on the layout of the columbarium, the value of the hall with the niches can have a higher psf value than even the most expensive condo in Singapore,” says Mak.
There are 14 wake halls at Woodlands Memorial. The “deluxe” wake halls can accommodate up to 60 people. The wake halls have carpeted floors, high ceilings and sound insulation, similar to luxury hotel function rooms, says Poh.
The wake halls come with an attached family room with a living room, en suite bathroom and bedroom for family members who want to keep vigil during the funeral. The wake halls have a daily rental rate of about $1,800.
One of the family rooms with en suite bathroom and bedroom for those who want to keep vigil during the funeral (Photo: Woodlands Memorial)
Six of the wake halls are “VIP halls” with double the capacity (120 people) and larger family rooms with two bedrooms instead of just one. The daily rental rate of the VIP wake halls is about $3,800.
The columbarium facilities at Woodlands Memorial will have up to 15,000 niches and will be operational by June. Typically, the most premium niches are those at eye level, which tend to be pricier than the highest and lowest niches.
The dimensions of the niches are likely to be 30cm wide and 25cm high, says Poh. “At the Mandai columbarium, the niches are 30cm wide, 25cm high and are quite deep,” he observes. “The niche comes with a marble plaque which can be engraved.”
For those who watch Korean dramas, the most frequently featured is the Chungah Park Columbarium, which has open niches where people can place flowers and mementoes, says Poh. The columbarium at Woodlands Memorial is likely to have niches with doors “similar to those in Taiwan and Malaysia”, he adds.
There are 14 wake halls of which six are VIP halls (Photo: Woodlands Memorial)
Existing players
“There is no uniform business model in the industry,” according to Poh. For example, Woodlands Memorial is “the first purpose-built integrated facility with funeral parlour and columbarium”, he says. It is also built on the first site to be released by the government for a funeral parlour and columbarium complex.
The biggest and most premium player in the funeral business in Singapore and Malaysia is Nirvana Asia. Last year, private equity firm CVC Capital Partners was considering selling Nirvana Asia in a deal to the tune of US$2 billion ($2.7 billion).
Singapore Funeral Parlour at Tampines, owned by Crescendas Group, has eight parlours. “In Singapore, the most active undertakers are probably Singapore Casket, Direct Funeral Services and Fairprice Casket,” says Poh. There are also some small funeral parlours at Sin Ming Road and Geylang Bahru, he adds.
Lush greenery outside the VIP wake halls (Photo: Woodlands Memorial)
Meanwhile, Singapore Casket at Lavender, founded in 1920, has a funeral parlour and funeral directing business. However, it does not own a columbarium. Australian-listed funeral services provider InvoCare owns Singapore Casket at Lavender and funeral services company Simplicity Casket.
InvoCare is one of the leading funeral service providers in the world, with a market capitalisation of A$1.73 billion ($1.55 billion). On March 27, it rejected a A$1.8 billion offer from US investment firm TPG Global.
According to the “Death Care Services: Global Strategic Business Report” published on March 13, the global market for death care services was estimated at US$118.3 billion last year. The forecast is that the business will grow by a CAGR of 6.1% to US$189.8 billion by 2030. Funeral homes (or funeral parlours) and funeral services, one of the report’s segments, are projected to record a 5.9% CAGR and reach US$131.9 billion by 2030.
One of the outdoor pavilions set amid the greenery (Photo: Woodlands Memorial)
Going green
Like the rest of the real estate sector, even funeral parlours must be environmentally friendly. At Woodlands Memorial, there is lush greenery on the fifth to ninth floors to reduce ambient temperature.
Solar panels have been installed over the entire roof of the complex to harness solar energy. “Woodlands Memorial is the first solar-powered funeral parlour in Southeast Asia,” says Poh. It generates 168,000 kWh of energy — the equivalent of powering 866 units of four-room HDB households annually.
The wake halls will have drinking glasses and refillable water jugs instead of plastic bottled water to minimise the use of polyethylene terephthalate or PET plastic. Shampoo and soap dispensers that are refillable will replace the use of disposable plastic shampoo and shower bottles in the bathrooms. “We want to ensure that our property is sustainable and climate-friendly,” says Poh.
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