Adjoining three-storey conservation shophouses at Neil Road for sale at $30m

The property for sale is a pair of adjoining three-storey conservation shophouses with front courtyard along Neil Road

Adjoining three-storey conservation shophouses
image: CBRE

CBRE announced recently that it is offering for sale a pair of adjoining three-storey conservation shophouses with beautiful front courtyard located at 73 & 75 Neil Road. The sale will be conducted through an Expression of Interest exercise which closes on 10 June 2021 at 3pm.

Strategically located within the Central Business District along Neil Road, the adjoining three-storey conservation shophouses enjoy excellent visibility with prominent main road frontage of about 11 metres.

Sitting on a land plot of approximately 4,439 sq ft, the pair of three-storey shophouses has a total gross floor area of approximately 11,128 sq ft and features a front courtyard of 825 sq ft. The pair of shophouses is currently fully leased predominately to office tenants.

Under the Master Plan 2019, the site of the adjoining three-storey conservation shophouses is zoned “Commercial” within the Chinatown (Tanjong Pagar) Conservation Area.

To be sold together, 73 & 75 Neil Road have an indicative guide price of S$30 million that works out to about S$2,510 per sq ft on the total floor area. As they are commercial properties, foreigners are eligible to purchase the property. There is no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the property.

Mr Clemence Lee, Senior Director, Capital Markets, Singapore at CBRE, said, “Over the last few years, Neil Road, Keong Saik Road and Tanjong Pagar Road have collectively earned a strong reputation for being one of the most vibrant dining and lifestyle enclave that is anchored by numerous award-winning restaurants, boutique hotels, bustling bars, trendy retail boutiques, as well as upscale fitness gyms and co-working spaces.”

“We expect the area to be even more vibrant with the completion of the Maxwell MRT Station in 2022 and the upcoming Mondrian Singapore – a 300-key luxury lifestyle hotel jointly developed by Craig Road Property Holdings and Accor, which is set to open doors in 2023. Consequently, owners of shophouses in the locale can expect to enjoy capital and rental upside in the mid to long term.”

Mr Lee added, “73 & 75 Neil Road present an excellent opportunity for investors to acquire a pair of fully let shophouses located in this highly sought-after F&B and lifestyle enclave. The successful buyer can also explore various value-add opportunities, such as changing the usage of the property into a restaurant or fitness studio to complement the multitude of offerings in the surrounding, subject to approval from the relevant authorities. Should F&B use be allowed, there is also the potential to utilize the existing front courtyard as an Outdoor Refreshment Area (ORA).”

The adjoining three-storey conservation shophouses are surrounded by many popular bars and F&B establishments such as Shack Shack, Burnt Ends, Man Man, bar Milano and Don Ho Social Kitchen and Bar. They are a short walk to both Tanjong Pagar and Outram Park MRT stations. Connectivity is set to be further enhanced upon completion of Maxwell MRT Station which is located 100 metres away. The shophouses are also easily accessible from other parts of Singapore via Ayer Rajah Expressway (AYE), Marina Coastal Expressway (MCE) and Central Expressway (CTE).

Mr Paul Ho, chief mortgage officer for iCompareLoan, said: “the adjoining three-storey conservation shophouses at Neil Road is attractive because it sits on a good location.

“But for buyers of the commercial property who need loan facility to complete the sale, they must be aware that many applications for commercial mortgage loans are delayed or rejected because buyers are not familiar with loan qualifications or of how to apply for such loans.”

Access to commercial mortgage loans is often hindered by unfamiliarity with loan qualifications, the lack the relevant financial knowledge and / or the resources to engage professional mortgage broker services to manage and address their obligations and financial liabilities as business owners. The terrain to apply and qualify for loans is also uneven because creditors are not just banks but finance companies and other licensed lending entities whose security arrangements may be different or more complicated.

When considering commercial mortgage loans, borrowers should seek out lenders who are willing to fund the loan under acceptable time constraints, keeping in mind their general creditworthiness. Borrowers should look at both bank and non-bank funding in order to get their needs met in a timely manner.

Asking questions and obtaining unbiased evaluations will reduce delay and frustration. Fortunately, new lenders have emerged to challenge banks on their traditional terms, so borrowers have more leverage now than ever before when seeking commercial loans.

Servicing your loan every month and seeing your bank balance taking a dip can be quite depressing. But what if you had a chance to lower your mortgage payment or even raise more funds on your property? When the window opens for an option to switch to another financial provider, it should be considered as it offers you an opportunity to get better terms from your previous loan. This is similar to refinancing for home loan.

This means that many owners of commercial properties are compelled to refinance every 2 years or else the interest cost will eat them alive. Commercial property includes retail, office, HDB shophouse, strata title shops, conservation shophouses, hotels, commercial buildings and mixed development.

If you hold a commercial property, you are likely running a business there or an investor – whether as an individual or under a corporation or investment holding company. Any decision would probably require you to do a cost-benefit analysis. The main reasons for refinancing or switching to a loan from another financial institution include raising cash, capitalizing on low interest rates to cut financing costs and a change in loan tenure.

Before buying a commercial or industrial property, make sure to determine whether you are buying to invest or for own use. The considerations are different.

There are many types of commercial properties such as (but not limited to the following):

  • Shophouse
  • Conservation properties
  • Offices
  • Retail shops
  • Office buildings
  • Hotels

The tenure of the property (based on the land) are typically:

  • 60 to 99 years
  • 999 and Freehold (rare)

The structures of these properties are:

  • Strata title
  • Individual land title

How to evaluate a commercial property?

  • Tenure of the property
  • Rental yield
  • Return of invested capital
  • GST registration (goods and services tax)
  • Calculation of property tax
  • Management fees
  • Interest rates of mortgage
  • Types of commercial property

You may buy the property as individual, using a corporation’s name, or using your company’s name largely depending on how you want to use it.

Written by Ravi Chandran

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