Ravi Chandran
Edmund Tie, the sole marketing agent, on Oct 14 offered the prime freehold carpark at Holland Road Shopping Centre for sale by Expression of Interest (EOI).
The freehold carpark enjoys rare coveted freehold tenure. Located at the basement level of Holland Road Shopping Centre, the carpark has a strata floor area of 1,503 sq m (approximately 16,178 sq ft). Holland Road Shopping Centre is a prominent landmark with a 78-metre wide frontage along Holland Avenue and it occupies the most strategic location at the entrance of the Holland Village / Chip Bee Gardens precinct. Key tenants at Holland Road Shopping Centre include Cold Storage, UOB Bank, Watsons and Guardian Pharmacy.
The freehold carpark offers a convenient parking venue and is popular amongst motorists visiting the Holland Village / Chip Bee Gardens precinct.
With high patronage in this popular F&B and lifestyle enclave, coupled with a shortage of parking spaces in the vicinity, the freehold carpark enjoys high occupancy and parking turnover.
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The Holland Village / Chip Bee Gardens precinct is set to become even more vibrant with the upcoming development of One Holland Village by Far East Organization – a mixed-use development accommodating approximately 550 residential and serviced apartment units, offices, retail and F&B spaces. Surrounded by matured and affluent residential estates, the precinct is also expected to enjoy greater growth in patronage with a projected 2,400 housing units from new projects that are currently under development in the vicinity, such as RoyalGreen, Fourth Avenue Residences, Van Holland and Leedon Green.
Executive director of investment advisory, Swee Shou Fern, commented, “Strata titled carparks are tightly held and rarely available for sale. Strategically located in a highly successful lifestyle hub, the freehold carpark offers a strong and steady cashflow. Such an investment opportunity is hard to come by and we expect keen interest from investors who wish to capitalise on the tight supply of parking spaces in this bustling enclave, with potential capital upside from a collective sale. The carpark represents 25 per cent of the total strata area in MCST 675.”
As the freehold carpark is zoned commercial, it is not subjected to additional buyer’s stamp duty or seller’s stamp duty and is eligible for purchase by both local and foreign buyers.
The indicative guide price for the freehold carpark is in the range of $32m.
The EOI exercise for the freehold carpark at Holland Road Shopping Centre will close on Wednesday, 20 November 2019 at 3pm.
Mr Paul Ho, chief mortgage officer at iCompareLoan, commenting on the sale of the freehold carpark at Holland Village said, “this will be appealing to investors because it is an alternative to putting money down on residential properties.”
He added, “As far as commercial real estate goes, carparks are low risk investments, in that it is very unlikely that there will be a sharp drop in demand for parking, especially in an area like Holland Village.”
Potential buyers have to ensure that they have the up to date on the current valuation of the property as it will determine the maximum loan and the possibility of having to top up the equity to qualify for financing a commercial property. Buyers should also use calculators to see if the mortgage payments on the loan is affordable given their income.
A few factors should inform your decision to buy a commercial property:
- Affordable?
Use calculators to see if the mortgage payments on the new loan is affordable given your current salary. Ccommercial property loan calculators help you know the mortgage payments from the different financial providers.
- Change in credit situation
Since the last time you took the loan, has your salary/company’s results/financial position improved or deteriorated? Have you been late in payment of debt? Did you sign on to be a guarantor or taken up more debt? Do you have a tenant? What is the remaining lease? All these factors will be considered when you apply for refinancing as your credit profile will be reassessed.
- Costs
Financing commercial property may lead to costs such as those relating to valuation, legal, etc. Look out for promotions where banks/financing companies waive charges.
- Clawback and lock-in period
Review your letter of offer and read up on the clawback and lock-in period to ensure that financing makes sense for you. If the switch is onerous and costly, it may not be worthwhile.
- Shop around
Once you have done your homework on the above, you can shop around for the financial institution that offers the loan package that suits you and look out for promotions. Make sure you view the loan package from the various financial providers, but do note that there are different rates for properties bought under personal name or company name.
- Documentation
You will likely be asked to provide the following in the application if you apply to finance commercial property. Have these ready on hand if your property is bought under a company name.
- Copy of NRIC/Passport
- Income statement and/or audited financials (corporation)
- Bank statements
- Loan account statement from existing financing company showing repayment history
- Latest CPT withdrawal statement for property to be refinanced (if there is utilization of CPF)
- Title Deed
A good Mortgage broker can assist you to refinance commercial property safely, further more, it’s free of charge as they receive a fee from the bank when a loan is completed. Think of them (mortgage brokers) as Supermarket assistants who can guide you on a number of brands of noodles. Talk to them about your taste, whether you want it a bit salty or sweeter, spicy or not, etc. They will find you the bank loan on the shelf.
