Ravi Chandran
Cushman & Wakefield announced on Feb 19 that it has been appointed as the marketing agent for the sale of an adjoining conservation shophouses pair at Club Street. The adjoining conservation shophouses pair are conservation commercial shophouses located at 44 & 46 Club Street.
Under the Master Plan 2014, the adjoining conservation shophouses pair are sited on “Commercial” land within the historic district of “Chinatown-Telok Ayer” in the Central Business District (CBD).
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The 999-year shophouses have a combined land area of 221.8 sq m (2,387 sq ft approximately) and their total floor area is estimated to be about 6,208 sq ft.
Once home to several upscale Chinese clubs and associations in the 1800s and 1900s, the precinct is now a popular destination for businesses, tourists & locals and is characterized by a plethora of trendy restaurants, bars, galleries and entertainment joints.
According to Mr Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, “The properties represent an exceptional investment opportunity to acquire a pair of conservation commercial shophouses that are strategically-located within the city centre and just a short walk from the Chinatown (North-East/ Downtown Line) & Telok Ayer (Downtown Line) MRT stations.”
“More than 1,000 new hotel rooms are expected to be added in the locale, injecting vibrancy and increasing tourism footfall, with the ongoing construction of new hotels in the vicinity, namely The Clan and Capri by Fraser, coupled with the recent sale of the government land sale hotel site at Club Street.
The prospective purchasers of 44 & 46 Club Street will enjoy the complementary benefits of potential rental and capital growth upon the completion of the new hotels.”
“Conservation commercial properties in prime central locations remain highly sought after by investors such as boutique funds, family offices and high net worth individuals looking to enhance the value of their investment portfolio, riding on the limited supply of this asset class. We expect keen interest from end-users who are looking to locate their business in a building with naming rights within CBD.”
Foreigners are eligible to purchase the adjoining conservation shophouses pair and Additional Buyer’s Stamp Duty (ABSD) is not required.
The adjoining conservation shophouses pair will be sold with existing tenancy, and the guide price is $25 million,
The sale of adjoining conservation shophouses pair is conducted through an Expression of Interest exercise which closes on 19 March 2019 at 3 p.m.
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The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
In 2014, median shophouse price in Singapore peaked at $3,824 per square foot (psf) on land area. Due to the implementation of loan curbs such as the Total Debt Servicing Ratio (TDSR) however, demand for shophouses decreased in line with other types of property. In 2017, the median shophouse price stood at $3,301 psf on land area. Even post-TDSR, many shophouses managed to rise in value.
Shophouses are perceived as attractive investments because they can hold their values because of their central locations and the freehold/999-year-leasehold of many of these properties. Shophouses are also valued because they give prominent presence to a business entity for them to be visible in a highly competitive environment.
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Mr Paul Ho, Chief Mortgage Consultant at iCompareLoan, said that despite the property curbs introduced by the Government last year, Singapore is still an attractive residential market for investors.
Although the property market exuberance has been curbed to some extent with the property cooling measures introduced last year, Singapore as a property market investment destination still remains among the top – shoulder to shoulder with other cities in the world like London, New York, Shanghai and Sydney.
“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region,” he added.
The adjoining conservation shophouses pair at Club Street will be especially attractive to investors because of its location, as investment properties of such nature are scarce.
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