Boat Quay conservation shophouse for sale at $16 million

Rarely available 999-year Boat Quay conservation shophouse for sale at $4,279 per square foot on the total floor area

Boat Quay conservation shophouse
image: CBRE

CBRE announced on 26th August that it is offering for sale a 999-year leasehold three-storey conservation shophouse located at 77 Boat Quay. CBRE is the exclusive marketing agent for the sale. The sale will be conducted through an Expression of Interest exercise which closes on 22 September 2021, Wednesday at 3pm.

Strategically located within the Central Business District, the Boat Quay conservation shophouse enjoys excellent visibility and prominent frontage along the Singapore River.

Sitting on a 1,530 square foot site, the shophouse has a total floor area of approximately 3,739 square feet and the rights to lease an additional 275 square feet of Outdoor Refreshment Area (ORA) located at the foot of the asset.

The property is currently fully leased to an F&B tenant on the ground floor, shop on level 2 and a beauty salon on level 3. Under the Master Plan 2019, the site is zoned “Commercial” within the Boat Quay Conservation Area.

77 Boat Quay has an indicative guide price of $16 million that works out to about $4,279 per square foot on the total floor area. As the Boat Quay conservation shophouse a commercial property, foreigners are eligible to purchase and there will be 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, “Due to its rich history, shophouses along Boat Quay have long been viewed as the most prestigious and treasured assets in Singapore. There are arguably only 57 individually owned waterfront shophouses in the entire Singapore and they are all located on Boat Quay. As such, shophouses on Boat Quay are rarely put up for sale and we believe that astute investors or owner-occupiers will recognize this and jump on this opportunity to own a unit along Boat Quay.”

Mr Lee added, “The Singapore River has been the first precinct in Singapore to pilot the Business Improvement Programme (BID) that was launched in 2017. Through events such as the Singapore River Festival and Singapore River Signatures, this strategic partnership between the public and private sector aims to promote placemaking and to increase footfall to the Singapore River.”

“These initiatives will reinforce Boat Quay as a distinguished waterfront destination and allow prospective buyers to enjoy strong rental and capital appreciation in the mid to long term. In addition, with CapitaSpring, a 51-storey integrated development in the vicinity that is expected to obtain TOP in 2H 2021, we foresee added vibrancy into the area with the development’s injection of approximately 647,000 square feet of Grade A office, retail shops and serviced apartments.”

Mr Lee

Gazetted for conservation on 7 July 1989, shophouses along Boat Quay were conserved for its architectural history and to serve as a reminder of the areas’ past as the centre of trading activities. The area is known by locals and tourists as the go-to destination for bumboat rides, trendy bars and restaurants offering al-fresco riverside dining experience. Juxtaposed against the CBD backdrop, these F&B establishments lining Boat Quay also gets support from a strong CBD working population and are usually packed during lunch and dinner.

The Boat Quay conservation shophouse is a short walk away from both Clarke Quay MRT station and Raffles Place MRT Interchange and is well served by the nearby Central Expressway (CTE), making it easily accessible to other parts of Singapore.

Mr Paul Ho, chief officer at iCompareLoan, said: “The asset’s long leasehold of of the Boat Quay conservation shophouse means ample time for holding and even rental yield play.”

Commercial properties are generally categorized into Retail, Offices, Conservation shop houses as well as HDB shop houses.
You can get a commercial property loan: –

  • As an individual
  • Or as a Company

For buying under company name, generally it will be under Private limited company. There are 2 distinctions: –

  • Buying for business own use; or
  • Buying under investment holding company

The companies will need to have financial statements and proof of profitability to qualify for a bank loan.

For buying under investment holding company, directors or majority shareholders will need to be assessed for Total Debt Servicing Ratio (TDSR). This is where it gets complicated as many business people tend to hold on to multiple properties. Hence the need for debt restructuring becomes important. iCompareLoan mortgage consultants can assist to assess your overall debt situation and devise ways to make suggestions for improvements.

Mr Ho added, “the Boat Quay conservation shophouse is attractive because it sits on a 999-year leasehold site. 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.

Written by Ravi Chandran

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