A food and beverage company has obtained the tenancy of the former Alkaff Mansion located at Mount Faber.
LES offered $79,251 per month for the site, beating eight other competitors in the tender by the Singapore Land Authority (SLA).
The former Alkaff Mansion can be redeveloped into a spa, museum, art gallery or restaurant.
The company’s exact plan for the property is yet to be disclosed, but it is believed that a new sophisticated dining concept will open.
The highest bid offered was almost double of the second highest bid and nearly three times the monthly rent guide of $28,100 stipulated by the SLA.
Mr. Colin Tan, head of research and consultancy at Chesterton Suntec International, said that “the SLA may have hit on something they didn’t expect, which explains why the guided rentals were quite low.” Mr. Tan added that new market players and operators may have seen new opportunities, resulting in higher bids.
Analysts said the new development will likely target corporate high-spenders and tourists, pointing out that renovations for the site will not come cheap.
“If you are looking into pumping in retrofitting cost onto the premises you probably need to spend easily about a million; $1.1 million to retrofit it into specific concept like F&B,” said Mr. Donald Han, managing director of Cushman and Wakefield.
The breakeven cost of the property is estimated at around $6.20 psf, which is still fairly attractive, said Mr. Han.
LES will lease the site for a three-year initial period, with the option to renew for another two three-year terms each.
Built in the 1920s, the former Alkaff Mansion was designated as a conservation building in June 2005. It has a total land area of 8,983.6 sq m and approximately 1,220 sq m of gross floor area.