999-year leasehold strata commercial units in prime locations for sale

The 999-year leasehold strata commercial units are in choice locations which is a key factor for property investments

Colliers International, on August 5th announced that it will put up several 999-year leasehold strata commercial units for sale via an expression of interest exercise (EOI) on 6 August 2020.

999-year leasehold strata commercial units7 999-year leasehold strata commercial units for sale at Peninsula Plaza

The indicative price of S$13.89 million translates to S$2,788 per square foot (psf) based on the total strata area of 4,983 sq ft (462.9 sq m). The seven strata commercial units are in Peninsula Plaza, within the Civic District of Singapore.

The portfolio of units comprises six retail units with sizes ranging from 463 sq ft to 862 sq ft, and an office unit of 1,485 sq ft. Presently, five of the retail units are tenanted and one remains vacant, while the office unit is owner-occupied.Buyers will have the option to buy the units with existing tenancies and on an as-is basis.

Peninsula Plaza is a 999-year leasehold 30-storey mixed-use building comprising a five-storey retail podium and a 24-storey office block and a car park. The building has an excellent connectivity with the Central Expressway (CTE) and other major arterial roads, and is within a short walking distance to City Hall MRT Interchange station.

Peninsula Plaza was designed by Alfred Wong Partnership, the architecture firm behind the old Singapore National Theatre and Orchard Gateway. It is made up of a 24-storey office tower that sits atop a 6-storey shopping complex. The building’s facade is laced by numerous column arches having been inspired by Gothic design.

1 unit for sale at The Adelphi

The indicative price of S$1.8 million translates to approximately S$2,740 psf on strata area. The retail strata unit has a strata area of 657 sq ft (61 sqm) and is tenanted. The unit is currently approved for night club use and will be sold with existing tenancy.

Located directly opposite Peninsula Plaza, The Adelphi stands to benefit from the high footfall from the bustling activities in the vicinity. Similar to the Peninsula Plaza, The Adelphi enjoys excellent connectivity through major arterial roads and expressway, and is within a short walking distance to City Hall MRT Interchange station.

The most recent transaction in The Adelphi was a strata retail unit on the 2nd storey at approx. 312 sq ft (29 sqm) sold for $1.1 million (or $3,524 psf on strata area) in January 2020.

Steven Tan, Senior Director of Capital Markets and Investment Services at Colliers International, said, “These units located near City Hall are well-suited for long term investment and are excellent for investors looking for steady income-generating assets with potential upside for income growth. The developments are old and there may be en-bloc potential to redevelop and rejuvenate the area into a vibrant and designated spot for social hangouts”.

1 unit for sale at Far East Shopping Centre

The indicative price of S$2 million translates to approximately S$2,999 psf based on the strata area of 667 sq ft (62 sq m). The 999-year leasehold strata retail unit is located in Far East Shopping Centre and the unit is currently tenanted and will be sold with existing tenancy.

Far East Shopping Centre is located at the heart of Orchard Road and has high visibility, benefiting from high footfall along the shopping belt. The most recent transaction in Far East Shopping Centre was a strata unit of 182 sq ft (16.9 sqm) located on the 3rd storey that was sold for S$860,000 or $$4,700 psf on strata area in January 2020.

Mr. Tan said, “With the Thomson-East Coast Line completing in 2021, this shopping centre will have an improved connectivity and will be even more accessible within a 10-minute drive to the central business district (CBD).”

“Although the retail sector remains fragile, choice location of the retail units remains as a key factor when looking for an investment property. Thus, retail properties that enjoy high footfall, steady income and great accessibility are likely to be sought after by investors,” added Mr Tan.

The portfolio of 9 999-year leasehold strata commercial units will have a total indicative price of S$17.69 million, which translates to approximately S$2,805 psf on total strata area.

The EOI for the 999-year leasehold strata commercial units will close on Thursday, 3 September 2020, at 3pm.

Mr Paul Ho, the chief mortgage consultant at iCompareLoan said: “the 999-year leasehold strata commercial units may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.”

He added: “To buy a commercial or industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.

Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied though the payoff may be worthwhile for investors.”

Written by Ravi Chandran

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