Prime F&B space on street level at Raffles Place for sale at $18 million

Image credit: ET&Co

Edmund Tie & Company (ET&Co) on Oct 31 announced that a prime ground floor strata commercial space at Grand Building located at 17 Phillip Street is up for sale by tender. ET&Co is the sole marketing agent for the prime ground floor strata commercial space.

Grand Building is strategically located in the heart of the established Raffles Place area in the core of the CBD. The location enjoys excellent visibility at street level and high footfall of office crowd from the densely populated office buildings in the area, such as One Raffles Place, UOB Plaza, OCBC Centre, Republic Plaza as well as the upcoming CapitaSpring integrated development on the former Golden Shoe carpark site. Its convenience is also unparalleled, with Raffles Place MRT interchange a mere three-minute walk away.

The prime ground floor strata commercial space has a strata floor area of approximately 272 square metres (sq m) or 2,928 square feet (sq ft), spanning the entire ground floor of the 11-storey Grand Building, boasting prominent street frontage with high visibility.

prime ground floor strata commercial space
Image credit: ET&Co

The prime ground floor strata commercial space is currently home to the hugely popular Chao Shan Cuisine – a heritage restaurant that serves authentic Teochew dishes.

Senior director of investment advisory Swee Shou Fern commented: “Prime ground floor commercial space in the core CBD area are tightly held and rarely available for sale. There is no offering of properties with similar attributes in Raffles Place. A ground floor unit at The Arcade, a leasehold development with 60 years remaining, was recently sold at $15,097 per sq ft.

“This presents an extremely attractive opportunity for the astute investor who believes in Singapore’s continued growth as a global business hub and potential capital value appreciation of real estate in the Raffles Place precinct to own a prized asset with strong tenant profile and stable rental income. Given its strategic location attributes, the subject property is also ideal for end users looking to operate their business out of a premise in this established and high-traffic precinct.”

The guide price for the prime ground floor strata commercial space is $18 million.

As a commercial property, foreigners are eligible to purchase it and will not be subjected to any Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD). The tender exercise for the prime ground floor strata commercial space will close on Wednesday, 5 December 2018 at 3PM.

An earlier report by JLL said that the biggest gainers following the new property cooling measures will likely be owners of strata-offices and shophouses approved for commercial use. The real estate service company said: “The government’s swift response to curb home price growth has tampered the prospects of residential properties as attractive investments. Investors looking for alternatives to park their money could divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.”

Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the prime ground floor strata commercial space 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.”

He added: “To buy a commercial or industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.

Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied though the payoff may be worthwhile for investors.”

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Written by Ravi Chandran

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