Ravi Chandran
Neil Road conservation shophouse for sale at a price of S$6.07 million to S$6.33 million – which translates to approximately S$2,400 psf to S$2,500 psf
Knight Frank Singapore announced on March 22 that it has been exclusively appointed to offer a conservation shophouse in the Central Business District (CBD) for sale via Expression of Interest (EOI).
The conservation shophouse at 55 Neil Road is a 99-year leasehold, 2-storey property with attic, prominently located along Neil Road, between the junctions of Teck Lim Road and Kreta Ayer Road.
The Neil Road conservation shophouse has a built-up area of approximately 2,530 sq ft and land area of approximately 1,401 sq ft.
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Located within the vicinity of the Neil Road conservation shophouse are popular F&B establishments such as Shake Shack, The Populus and The Lokal, with further rejuvenation of Neil Road expected with the redevelopment of the former Chinatown Plaza into a mixed-use development and completion of Maxwell MRT station on the Thomson-East Coast Line, by end 2021. Both amenities are within 100 metres from the property.
The Neil Road conservation shophouse is available for sale with vacant possession. Subject to approval from the relevant authorities, the property may be used for various purposes, including as a restaurant, retail shop, clinic, gym or as an office.
Knight Frank expects offers for Neil Road conservation shophouse to be in the region of S$6.07 million to S$6.33 million, which translates to approximately S$2,400 psf to S$2,500 psf. The price range is comparable to recent shophouse transactions along Neil Road, such as 134 Neil Road, a freehold property that transacted at S$12.93 million, or S$3,495 psf in February 2021, and 29 Neil Road, a 99 years leasehold site which sold for S$4.6 million or S$2,558 psf in November 2020.
As the site of the Neil Road conservation shophouse is zoned commercial, no Additional Buyer’s Stamp Duty and Seller’s Stamp Duty will be imposed for the transaction of the property.
The EOI exercise for the Neil Road conservation shophouse will close on 28 April 2021, Wednesday, at 3pm.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said: “Commercial or shophouse spaces in Singapore usually comes with 30-, 60-, 99-, or 999-year lease. Some may be freehold. For 99-year and shorter leasehold units, buyers should be mindful that financing institutions may quote a lower loan quantum for units running low on their lease.”
Borrowers for commercial properties are allowed to take a loan-to-value ratio (LTV) of up to 80%, even with outstanding residential mortgages. The maximum loan tenor typically stands at 30 years. However, loans for commercial property tend to command a higher interest rate relative to residential property loans. Like the latter, these loans come in
- Fixed Rate Package
- Variable (Floating) Rate Package
The requirements for a commercial loan, however, are more stringent. For example, the LTV ratio is contingent on whether the property is for owner-occupation or investment, with the latter subjected to stricter criteria by some banks. The next section explains the approval conditions in greater detail.
Mr Ho said, “we have witnessed high levels of interest in the conservation shophouses in the CBD area. So, the prime 99-year conservation shophouse is a rare opportunity to acquire a highly coveted conservation shophouse, right at the heart of the Central Business District.”
Such commercial assets can be procured with many different types of commercial loans and are an attractive buy because they provide immediate rental income and potential strong reversionary rental, particularly with the diverse range of entertainment, cultural and lifestyle attractions in the vicinity.
Singapore remains an attractive destination for savvy investors even in the Covid-19 pandemic. For such investors, the Neil Road conservation shophouse will be a worthy proposition.
