Ravi Chandran
The commercial property sits on a freehold site of approximately 13,561 square feet
A brand new three-storey commercial building located at 933 Upper Changi Road North is up for sale by way of Expression of Interest (EOI). CBRE which is the exclusive marketing agent for the sale of the commercial property announced that the EOI exercise closes on 28 April 2021, Wednesday at 3pm.
Sitting on a freehold site of approximately 13,561 square feet, the commercial property enjoys prominent visibility with its 70-meter dual road frontage along Upper Changi Road North and Mariam Way. The three-storey building has a built-up area of 18,986 square feet and comprises 12 carpark lots. Under the 2019 Master Plan, the site is zoned “Commercial” and has a plot ratio of 1.4.
The guide price for the commercial property at 933 Upper Changi Road North is S$38 million, which works out to about S$2,000 per square foot on the gross floor area.
Mr Clemence Lee, Senior Director of Capital Markets at CBRE said, “The property is strategically located within a densely populated residential enclave of more than 15 condominium projects housing a total of more than 6,000 residential units. Given the lack of immediate retail facilities and amenities in the neighborhood, investors can explore leasing part of the space to an anchor tenant such as a supermarket and other spaces for complementary trades – including health and beauty retailers, childcare facilities, fitness centers and clinics. Alternatively, the building can also be used for offices, commercial schools and associations, subject to approval from relevant authorities.”
Mr Lee added, “The property will also be able to capitalize on its proximity to several mega projects such as Changi East Industrial Zone, Changi City and Changi East Urban District. As plans for these mega projects come to fruition, the asset will be well-positioned to benefit from the spillover of commercial activities and allow the incoming owner to enjoy strong capital appreciation in the medium to long term horizon.”
The successful buyer of the commercial property will also enjoy potential naming and signage rights to the building. Given its excellent attributes and potential capital appreciation, the subject property is expected to garner strong interest, not only from investors, but also owner-occupiers.
As the property sits on a site zoned for “Commercial” use, foreigners are eligible to purchase the subject property. There will be no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the property transaction.
The property is well-connected to other parts of Singapore via public and private transportation. Upper Changi and Tampines MRT stations are both a short bus ride away and numerous bus services can be found along Upper Changi Road North. The asset is also within proximity to several arterial roads and expressways such as the Pan-Island Expressway (PIE), Tampines Expressway (TPE) and East Coast Parkway (ECP).
Mr Paul Ho, chief mortgage officer for iCompareLoan, said: “the building along Upper Changi Road North is attractive because it sits on a freehold 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.
