Ravi Chandran
Three freehold adjoining two storey shophouses at the city fringe with development potential for sale at $12 million
CBRE announced on July 20 that it has been appointed as the exclusive marketing agent for three freehold adjoining two storey conservation shophouses located at 223, 225 and 227 Geylang Road. The sale will be by way of Expression of Interest, which closes on 27 August 2020, Thursday at 3pm.
Sitting on a combined site of approximately 4,318 square feet, the freehold adjoining two storey shophouses enjoys high visibility with its 15 metres of unobstructed main road frontage along the bustling street of Geylang Road. The total built-up area of the three freehold adjoining two storey shophouses is approximately 6,754 square feet. Under the 2019 Master Plan, the site is zoned “Commercial” with a plot ratio of 3.0 in the Geylang Secondary Settlement Conservation Area. The subject property is currently fully leased to multiple tenants; ground-floor tenants include a restaurant and two entertainment clubs, while the upper floor units are leased to office and residential tenants.
Clemence Lee , Senior Director of Capital Markets at CBRE says, “Given the site’s excellent attributes such as its freehold tenure, city fringe location, main road frontage, we’re confident that it will appeal to a wide pool of buyers including investors, owner-occupiers and small to mid-sized developers.
“The successful buyer can explore maximizing the site’s plot ratio of 3.0 by constructing a rear extension and increasing the built-up area to a total of 12,955 square feet, subject to approval from the relevant authorities. Consequently, the subject property can become a boutique building that potentially houses a F&B outlet and showroom on the ground floor, and serviced apartments or offices on the upper floor, again subject to approval from the relevant authorities. The buyer will also have naming and signage rights to the property.”
The guide price for 223, 225 and 227 Geylang Road – to be sold collectively – is S$12 million. After factoring in an estimated development charge of S$3.2 million, this works out to about S$1,172 per square foot per plot ratio.
Recent transactions nearby include a three-storey shophouse at 460 Geylang Road which was transacted by CBRE at S$4.8 million in March 2020 and a four-storey building at 233 Geylang Road which was transacted at S$7.2 million in May 2019.
As the freehold adjoining two storey shophouses sits on a site zoned for “Commercial” use, foreigners are eligible to purchase the subject property. There is no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the property transaction.
Mr Lee adds, “Geylang Road is strategically located between two growth centres outlined by the Urban Redevelopment Authority, namely the Paya Lebar Regional Centre and the Kallang Riverside Lifestyle Precinct. The recent completion of Paya Lebar Quarter has already transformed Paya Lebar Central into a vibrant commercial hub. As rejuvenation at Paya Lebar continues to intensify, coupled with the government’s plans to transform areas along the Kallang River into a mixed-use lifestyle hub, the subject property is well-positioned to benefit from the spillover of commercial activities. The buyer can, hence, expect to enjoy strong rental and capital appreciation in the medium to long term.”
Known to locals and tourists as one of Singapore’s foodie havens for authentic local delights, Geylang is also home to a myriad of entertainment lounges, religious organizations and clan associations. The property is well-connected to other parts of Singapore via public and private transportation. While Kallang MRT Station is a short walk away, numerous bus services can be found along Geylang Road which leads to other arterial roads and expressways such as Kallang-Paya Lebar Expressway (KPE), Pan-Island Expressway (PIE), Central Expressway (CTE) and Nicoll Highway. The Central Business District is also just a short drive away.
Mr Paul, chief mortgage officer at iCompareLoan, said that “although the Covid-19 circuit breaker makes real estate sales difficult at the moment, the three freehold adjoining two storey shophouses at Geylang is in a good location and is hard to come by.” Mr Ho believes smart investors who are flush with cash, will resort to value hunting instead of choosing residential properties which are still selling at unbelievable prices.
Mr Ho added that given the land scarcity in Singapore, demand for commercial properties in Singapore will continue to rise over the long term. He pointed out that Singapore continues to be a global financial centre and a trade hub with high livability scores – all of which attracts high net worth investors to the Republic. All these factors will inevitably fuel demand for commercial property in Singapore he added.
Mr Ho believes that value buys in the property market right now are are landed inter-terrace houses which’s per square feet price on the built-up area is usually less than $1,000 and commercial properties. But Mr Ho cautioned that the bigger challenge for buyers of commercial property is securing the best commercial loans.
“With the right loan, the buyer can save thousands, if not tens of thousands of dollars,” he said. Adding, “which is why they would have to work with established mortgage brokers who can provide them free service.”
Geylang is a planning area and township located on the eastern fringe of the Central Region of Singapore, bordering Hougang and Toa Payoh in the north, Marine Parade in the south, Bedok in the east, and Kallang in the west. Geylang is also where one of Singapore’s oldest Malay settlements, Geylang Serai, is. The Geylang area is composed of north and south sections that are divided by Geylang Road which stretches for about three kilometres.
