Gaw Capital keen on more S’pore properties
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Hong Kong private equity property group Gaw Capital Partners (GCP) is keen to expand its presence here after investing around $500 million in Singapore in recent years.
It made its intentions clear last month when it completed the $342 million acquisition of PoMo, a nine-storey office and retail block in Selegie Road.
It intends to revamp the block, particularly its retail component, to tap the student population from the many educational institutions in the area.
President and co-founder Kenneth Gaw said: “Singapore’s property sector is one of the very few major markets in Asia which suffered a downturn in the past few years.
“It is now on the cusp of recovery and we are confident about buying into a recovery.”
The group also owns Hotel G in Middle Road. It is a revamp of the former Big Hotel that GCP picked up for $203 million in late 2015 before forking out a further $10 million to refurbish and rebrand the asset.
Both properties are in the Bugis arts and cultural district.
“Other than Hotel G and PoMo, we are interested in acquiring other assets in the commercial office and residential sectors in Singapore,” said Mr Gaw.
He and his elder brother Goodwin set up GCP in 2005.
Since its inception, the group has raised equity of US$8.7 billion (S$11.6 billion) and has US$13.4 billion in assets under management.
It specialises in adding strategic value to underutilised real estate through redesign and repositioning.
Mr Gaw noted that in Singapore, with the successful official launch of Hotel G last year, the group’s asset management team has become familiar with the neighbourhood and its traffic flow.
“We’re confident that we can add value to PoMo,” he said.
GCP senior investment director Imelda Tham noted PoMo’s strategic location in a vibrant arts and educational neighbourhood and its close proximity to several large educational institutions, which provide access to about 17,000 captive students and teaching staff in the area.
The Singapore Management University, Nanyang Academy of Fine Arts, LaSalle College of the Arts (McNally Campus), School Of the Arts and Kaplan are among the educational institutions in the area.
“It is now on the cusp of recovery and we are confident about buying into a recovery.”
Ms Tham said: “PoMo itself is anchored by Kaplan, which has a substantial student enrolment.
“We believe we can harness this potential by creating a more comprehensive retail tenant mix that engages the student population and draws higher foot traffic into the mall.
“The mall has a mix of food and beverage (F&B), fitness, and health and beauty tenants, and we are looking to introduce more experiential aspects by introducing an entertainment zone.”
PoMo’s net lettable area of about 180,000 sq ft comprises 110,000 sq ft of offices – levels four to nine – and 70,000 sq ft of retail space that goes from basement one to level three.
Its offices are fully leased, with education service provider Kaplan the biggest tenant. Almost the whole of level five is designated for the Community/Sports Facilities Scheme, with The Little Arts Academy occupying it now.
The retail space is 75 per cent leased, achieving an average rent of about $9 psf a month. Tenants include Evolve Mixed Martial Arts, Cosmoprof Academy, Mos Burger, Ya Kun Kaya Toast and other F&B outlets. Major tenancies will be expiring in about two years.
PoMo, which has 143 carpark spaces, is on a site with 99-year leasehold tenure starting on March 17, 1983. The 43,027 sq ft plot is zoned for commercial use.
The existing gross floor area of 234,996 sq ft has maximised the site’s development potential.
Revamp work is likely to begin progressively this year, Ms Tham said. She could not estimate the cost of the project as it is still in the planning phase.
It will be focused mainly on the retail area to improve the circulation and enhance visibility of the shops, with light touch-ups of the common areas and the facade.
Mr Gaw said: “We will harness our numerous experiences in other parts of the world when we renovate PoMo.”
The firm’s renovations include work at Pacific Century Place in Beijing, Plaza 353 in Shanghai, Metropolitan Plaza in Guangzhou and West 9 Zone retail podium in Hong Kong.
GCP manages four opportunistic property funds targeting assets in the Greater China and Asia-Pacific regions, and a fund that specialises in hospitality assets in Asia-Pacific.
It also manages two funds that invest in United States properties, as well as various separate account investments in Britain.
Its activities include investing, value-adding renovations and development in residential, commercial offices, retail malls, serviced apartments, hotels and logistics.
Questions & Answers
Q.What is Gaw Capital's overall strategy for its property investments in Singapore?
What is Gaw Capital's overall strategy for its property investments in Singapore?
Gaw Capital aims to buy into the recovering property market in Singapore, specialising in adding strategic value to underutilised real estate through redesign and repositioning. They are interested in acquiring more commercial office and residential assets.
Q.How does Gaw Capital plan to enhance the PoMo property, specifically its retail component?
How does Gaw Capital plan to enhance the PoMo property, specifically its retail component?
Gaw Capital plans to revamp PoMo's retail component by introducing a more comprehensive tenant mix and an entertainment zone. This aims to engage the large student population nearby and draw higher foot traffic into the mall.
Q.What is the current occupancy status of PoMo's retail and office spaces?
What is the current occupancy status of PoMo's retail and office spaces?
PoMo's office spaces, comprising 110,000 sq ft, are fully leased, with Kaplan being the biggest tenant. The retail space, 70,000 sq ft, is 75 per cent leased, achieving an average rent of about $9 psf a month.
Q.What are Gaw Capital's renovation plans for PoMo and when are they expected to start?
What are Gaw Capital's renovation plans for PoMo and when are they expected to start?
Revamp work is likely to begin progressively this year, focusing mainly on the retail area to improve circulation and enhance shop visibility. There will also be light touch-ups to common areas and the facade.