Ravi Chandran
List Sotheby’s International Realty (List SIR) announced that a well renovated 3-storey CBD conserved shophouse is for sale at $15 million. The 3-storey CBD conserved shophouse is one of the only 6000+ conservation shophouses in Singapore.
List SIR said the 3-storey CBD conserved shophouse has well-renovated interior and is with ready retail and office tenants.
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- Land Area: 1,722sqft
- Build Up Area: 4,477sqft
- Tenure: 99 years from 1992
- Rental Yield: Approx 2.72%
The asking price for the 3-storey CBD conserved shophouse amounts to $3,350 psf on built-up-area.
The 3-storey CBD conserved shophouse features easy access of approximately 350 m to Tanjong Pagar MRT Station (North-South Line) and is nestled within the Central Business District with offices, amenities, eateries all within close proximity.
Conservation shophouses are very limited in supply in Singapore and there no more new addition of conservation shophouses to the existing pool. This shophouse is also located in close proximity to Tanjong Pagar City where offices command a premium. It is also within about 10 mins drive to Marina Bay Sands and 20 mins drive to Changi International Airport. The 3-storey CBD conserved shophouse will also benefit from the Draft Master Plan 2019 CBD Incentive Scheme.
A recent A JLL research report referring to the CBD Incentive Scheme, called it “visionary” and “bold”. The Urban Redevelopment Authority (URA) released information about the scheme on March 27, and it offers 25-30% higher plot ratios for owners who convert office buildings over 20 years old to other complementary uses in the CBD such as residential and hotel use.
JLL thinks this will motivate several owners to convert older buildings into state-of-the-art developments with modern offices, apartments and hotels. The JLL research has also identified over 20 buildings, which may qualify for the CBD incentive scheme.
“These new developments will bring new residents of all ages, tourists and digital nomads into the district, allowing for more 24/7 activities and potentially more restaurants, events and even schools. Sophisticated occupiers now prioritise hospitality, health and lifestyle amenities in their choice of office locations.”
The JLL research noted that Singapore is already the location of choice for regional headquarters, especially for technology companies due to its quality of life and attractiveness for talent, supportive conducive government policies and funding and competitive occupancy costs. It said that it was confident this revitalisation initiative will uplift Singapore’s CBD and further widen Singapore’s lead as a top global city for talent, companies and capital.
JLL believes that the withdrawal of older office stock as envisioned by the CBD Incentive Scheme, will also help to accelerate Singapore’s decentralisation strategy to enhance sustainability, reduce commuting and enliven its decentralised gateways.
“Office occupiers displaced by the withdrawal of older office stock in the CBD will need new premises. This gives the government more scope to release land parcels outside the CBD in decentralised gateways such as Jurong East, Woodlands and Tampines to expedite the development of these hubs.
“With limited new supply of office space in the CBD expected and potential initiation of redevelopment projects, we expect CBD office rents to continue to rise over the next five years, barring any demand shocks. This would also likely widen the rental gap between CBD and suburban hubs, and motivate more businesses to consider moving some operations out of the CBD.”
The report said that the CBD Incentive Scheme provides incentives to encourage the conversion of older office buildings in the southern portion of the CBD for complementary residential or hotel uses. The CBD Incentive Scheme covers buildings over 20 years old on sites that meet a minimum size criteria and provides for 25-30% higher plot ratio if noncommercial uses are proposed.
The research noted that rezoning and gross plot ratio incentive schemes have worked well in Singapore in the past. It drew attention in particular to how several sites in Bukit Timah were rezoned from Industrial to Residential in the year 1993, to motivate factory owners to redevelop the buildings into condominiums. Higher plot ratios were assigned to these sites and the payment of development charge was waived. Due to this plan, the area was rejuvenated into an exclusive residential enclave close to the city.
The CBD Incentive Scheme also directly and proactively catalyses the reshaping of Singapore’s CBD to address transport concerns and plants the seeds for more integrated livework-play developments, the research said. This will likely uplift Singapore’s downtown CBD and further widen our lead as a top global city for talent, companies and capital.
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