Rejuvenation in the Beauty World-Bukit Timah area is now underway. A major catalyst was the launch of The Reserve Residences mixed-use development integrated with a transport hub located on the opposite side of Jalan Jurong Kechil and bounded by Jalan Anak Bukit and Upper Bukit Timah Road.

The 732-unit The Reserve Residences launch on the weekend of May 27–28 saw 520 units (71%) sold at an average price of $2,460 psf, making it the best-selling project of 2023 to date. As of July 4, 596 units (81.4%) have been sold at a higher average price of $2,474 psf.

The fact that The Linq is freehold is another draw, says CBRE executive director of capital markets Clemence Lee. He points to Solitaire on Cecil, a freehold, Grade-A, strata office development by TE Capital Partners and LaSalle Investments on Cecil Street in the CBD.

Launched in January this year, all 15 office floors and two retail/F&B units on the first level of Solitaire on Cecil have been sold within five months. The strata offices achieved prices of $4,100 to $4,300 psf. There are just two retail units in the development, with the first sold for $5,400 psf and the second, for close to $6,000 psf.

Freehold shophouses have also been popular with both foreign and local investors, notes CBRE’s Lee. He adds that recent transactions for prime 999-year leasehold or freehold shophouses in the Amoy Street and Boat Quay area have ranged from $5,000 psf to $8,000 psf.

Considering the demand for such freehold commercial properties, BBR has decided to sell the retail podium at The Linq. “We feel that this is as good a time as any to see what offers we can get,” adds Tan. “During this period, the new buyer can secure tenants, and fit-out works can be done before the mall is completed and opens next year.”

‘High-end F&B destination’

With 80% of the 53 strata-titled units at The Linq approved for restaurant use, BBR’s Tan is positioning the retail podium as “a high-end F&B destination”.

The remaining 20% of the retail units will be ideal for amenities such as a gym, convenience store or medical clinics, which will support the needs of the residents at The Linq, adds CBRE’s Lee.

The strata-titled units within the retail podium will be sold collectively at an indicative guide price of $136 million or about $4,583 psf, based on the total strata area of 29,676 sq ft.

“We believe there’s a market for a high-end dining enclave in the area akin to Cuppage Terrace, Holland Village, Dempsey Hill or Robertson Quay in terms of look and feel,” says Lee. “This will complement the existing retail and F&B options in the immediate vicinity and the future Bukit V retail mall at The Reserve Residences. It will enhance Beauty World as a vibrant and dynamic destination.”

Lee points to the many eateries in the neighbourhood. For instance, the Bukit Timah Market and Food Centre (built in 1976) has over 80 food stalls and is famous for Ah Zhen Wanton Mee, He Zhong Carrot Cake and Xie Kee Hokkien Mee.

Just off Upper Bukit Timah Road is Cheong Chin Nam Road. The entire stretch is dotted with a row of eateries, such as Al-Azhar Restaurant, Boon Tong Kee Singapore, Five Star Kampung Chicken Rice & Kitchen, BBQ Box and Mongkok Dim Sum.

“The presence of all these eateries shows that the existing population is large enough to support them,” observes Lee. “BBR Holdings’ predominantly F&B spaces at The Linq will bring a new vibe to this market segment.”

Increased accessibility

The Linq will benefit from the increased accessibility when the integrated transport hub is completed. The development will have an underground link to Beauty World MRT Station on the Downtown Line, the Bukit V mall and the new air-conditioned bus interchange. The Linq will also have an underground link to the future Bukit Timah Community Building — an integrated facility with a new community club, a redeveloped market and hawker centre, an indoor sports hall, a community library and an elderly facility.

The air-conditioned bus interchange at The Reserve Residences will be linked to the second level of the three-storey Bukit V mall, while Beauty World MRT Station will be linked underground. When completed in 1Q2028, Bukit V will have 215,280 sq ft of retail space. It will have a Cold Storage supermarket, F&B offerings, education centres, and medical services.

Above the mall at The Reserve Residences are eight residential towers and 160 serviced apartments. Developed jointly by Far East Organization and Sino Group, the mixed-use complex is targeted for completion by 1Q2028.

One MRT stop from Beauty World is King Albert Park MRT Station, which will be an interchange for the Downtown Line and the upcoming Cross Island Line.

Besides increasing accessibility via the integrated transport hub at Beauty World, the government is also injecting more residences into the Bukit Timah-Beauty World area to make it more vibrant.

The existing population in the Bukit Timah Planning Area is about 78,000, based on the 2020 Singapore population census. Those dwelling in condos/apartments accounts for 47.6% of the population, with another 42.1% living in landed housing. Hence, 89% of the residents live in landed or condos. “The Bukit Timah area is an affluent neighbourhood,” CBRE’s Lee concludes. “So it’s good to create a high-end F&B destination here.”

Based on new private condo projects launched in District 21 since 2018, Lee reckons there will be more than 3,000 new condo units in the area over the next few years. Most of the developments launched have already been sold out.

New residential developments

URA also sold three new government land sale (GLS) sites zoned for residential development in Bukit Timah (District 21) and the neighbouring Hillview area (District 23) last year. The site at Dairy Farm Walk drew seven bids at the close of the tender in March 2022. Sim Lian Group emerged as the winner with a bid of $347.001 million or $980 psf per plot ratio (ppr) for the site in District 23.

A year later, Sim Lian launched the new condo on the site as the 386-unit The Botany at Dairy Farm Walk in March 2023. Close to 54% of the units have been taken up to date, with the average price hovering at $2,060 psf.

In November 2022, two other GLS sites were sold in the area — at Bukit Timah Link and Hillview Rise. Next door to The Linq is the GLS site at Bukit Timah Link, which drew five bids at the close of the tender. Listed property developer Bukit Sembawang Estates won the site with a bid of $200 million ($1,343 psf ppr).

Bukit Sembawang’s site at Bukit Timah Link can be developed into a 160-unit private condo, and the developer has indicated that it is likely to launch the project early next year.

The other site at Hillview Rise received four bids, with a joint venture between Far East Organization and Sekisui House securing the site with a bid of $320.78 million ($1,024 psf ppr) in November. The joint developers intend to develop the Hillview Rise GLS site into a new private condo of 340 units. The project is expected to preview sometime in 4Q2023.

City Developments Ltd (CDL) will launch The Myst, a 408-unit private condo off Upper Bukit Timah Road on July 8. Prices will start from $1,862 psf. The project is a redevelopment of the former Tan Chong Industrial Park, which CDL purchased for $126.3 million in a deal completed in April 2022. The project is a five-minute walk from Cashew MRT Station on the Downtown Line and three stops from Beauty World MRT Station and the integrated transport hub.

Capital upside with rejuvenation

BBR’s Tan believes the new buyer of the retail podium at The Linq will be able to enjoy capital upside now that rejuvenation is underway. He recounted his experience when he came across the Goh & Goh Building, a freehold, industrial building offered for collective sale in early 2017.

“At that time, the whole area looked a bit dated, and there was no life,” relates Tan. The nearby malls, such as Beauty World Centre and Beauty World Plaza, Bukit Timah Shopping Centre and Bukit Timah Plaza, were all built in the early 1980s and showed their age.

“However, we saw the site’s potential given the MRT station, the Bukit Timah Nature Reserve and the nature parks in the area, and the fact that the land has a freehold tenure,” recalls Tan. “We were, therefore, quite aggressive in our bid price.”

BBR won the Goh & Goh Building in a tender, with a bid of $101.5 million in 2017. Only after purchasing the site did BBR learn of URA’s intentions to rejuvenate the Bukit Timah-Beauty World area.

“We also did a land swap exercise,” says Tan. “We exchanged part of the en bloc site for the state land in front of our site to have a more regular plot and a more prominent frontage from the road. We consulted URA, who guided us on our design to fit into the overall Master Plan for the area.”

When the 2019 Master Plan was revealed, BBR could see the government’s overall plan for the area. “Our site is located at the heart of the development, and it was the first piece in the jigsaw puzzle.”

Rental and gross yields

CBRE’s Lee estimates the rental rates of the retail and F&B units at The Linq to be $25 to $30 psf per month for those with prominent street frontage on the ground floor. Those on the second level could range from $10 psf to $15 psf per month. Hence, the average expected rent is in the $20 psf range. Based on the asking price, Lee reckons the new buyer could achieve a gross rental yield of about 4%.

The retail podium has an open event space at the front. Its double-storey ceiling height allows community events such as yoga or dance classes to be held without fear of inclement weather. It will also generate traffic to the area, says BBR’s Tan.

“Retail podiums are typically tightly held and seldom available for sale,” says CBRE’s Lee. “They are highly sought-after by investors.”

As The Linq retail podium is considered a commercial asset, locals and foreigners can purchase it en bloc without incurring any additional buyer’s or seller’s stamp duty, notes Lee.

“The buyer could consider strata sales of the individual units as an exit strategy in the future,” Lee says. The sizes of the units range from 183 to 1,087 sq ft. Hence, the investment quantum of the units will be palatable for individual investors or owner-occupiers, he adds.