Ravi Chandran
CBRE on Jul announced the sale of Joo Chiat Road adjoining shophouses for sale via public tender. What is for sale is a row of six contiguous three-storey freehold conservation shophouses with potential to value add, in the heart of the bustling Joo Chiat/East Coast area.
To be sold as a bundle, the Joo Chiat Road adjoining shophouses are located at 454, 456, 458, 460, 462, 464 Joo Chiat Road.
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With a prominent 30-meter road frontage along Joo Chiat Road which is the main thoroughfare of the Joo Chiat/East Coast precinct, the property enjoys high visibility and footfall throughout the day. The shophouses sit on a freehold site of approximately 7,400 square feet and the total existing built-up area is around 13,000 square feet.
Under the 2019 Draft Master Plan, the Joo Chiat Road adjoining shophouses is zoned “Commercial” with a plot ratio of 3.0 and a maximum allowable gross floor area (GFA) of approximately 22,200 square feet. The shophouses come with rare F&B approvals on the ground floor and 2nd-storey.
Yap Hui Yee, Associate Director of Capital Markets at CBRE said, “Joo Chiat/East Coast is one of Singapore’s most iconic and storied neighborhoods. Much of the precinct’s charm comes from its history as a Peranakan enclave with colorful shophouses that have been beautifully retained, offering trendy vibes with restaurants, cool cafes and bars, and hipster boutiques. In fact, one of the shophouses is tenanted to the homegrown-brand café, Sinpopo, that is popular among locals and tourists.”
“We expect robust interest in this property due to the rarity of a row of six freehold conservation shophouses with existing F&B approvals in a strategic location – being made available for sale. There will be no Additional Buyers’ Stamp Duty or Sellers’ Stamp Duty imposed on local or foreign buyers,” continued Ms Yap.
Depending on the buyer’s inclination, he/she can:
- Enjoy immediate stable rental income, based on the current GFA
- Value add to the property and fully maximize the allowable GFA by building a rear extension, subject to authorities’ approval
- Configure the space to suit own-use requirements or to cater to the needs of the tenants
Subject to authorities’ evaluation, the Joo Chiat Road adjoining shophouses is suited for a co-working business, medical or healthcare center, F&B and lifestyle retailers, or hostel operators.
Designated as the first “Heritage Town” in 2011, Joo Chiat is characterized by a mix of colorful shophouses of Peranakan heritage that house popular F&B shops, trendy bars and hipster boutiques. The Joo Chiat/East Coast area is not only popular among locals and a lunch crowd during daytime, it also transforms into a vibrant district in the evening, frequented by after-work crowds, tourists and residents. Some of the well-known F&B establishments at this bustling lifestyle destination include AliBabar, Homeground Coffee Roasters and Zaffron Kitchen.
The Joo Chiat Road adjoining shophouses enjoys a large and ready catchment from the nearby commercial and residential developments, including retail malls such as I12 Katong located a short 100 meters away, Katong Point and Parkway Parade, as well as Holiday Inn Express Singapore Katong. Accessibility to the property will be further enhanced with the upcoming Marine Parade MRT station on the Thomson East-Coast Line that is 350 meters away.
The public tender exercise for the Joo Chiat Road adjoining shophouses will close on 30 August 2019 at 3pm.
The biggest gainers following the 2018 property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Properties such as the Joo Chiat Road adjoining shophouses may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.
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