Ravi Chandran
Raffles Place commercial property loan becomes difficult to get if you are not familiar with banks’ qualifications
- Tastefully refurbished shophouse with 999-year tenure in the heart of Raffles Place Financial District for sale
Savills Singapore announced on 31st August that it is offering for sale 17 Circular Road – a three-storey conservation shophouse situated within the prime Boat Quay Historic Conservation District.
Savills Singapore the exclusive marketing agent for 17 Circular Road said the property sits on a land area of approximately 950 square feet and has a total build-up of approximately 2,760 square feet. Enjoying full concrete flooring with balcony and rare permanent “Restaurant” approval on the ground floor, the shophouse is fully leased to strong and diversified tenants. The ground floor is occupied by an F&B tenant while the second floor is approved as shop and the third floor houses a gym.
Just a stone’s throw away from the Singapore River, 17 Circular Road is located in the heart of the vibrant and bustling Boat Quay locale. The shophouse enjoys excellent accessibility with Raffles Place MRT Interchange station which is two minutes’ walk. Surrounded by major office buildings, such as CapitaSpring, UOB Plaza 1 and 2, One George Street, OCBC Centre and One Raffles Place, the shophouse is well positioned to capture the large catchment of employees working in the vicinity.
Ms Yap Hui Yee, Director, Investment Sales & Capital Markets at Savills Singapore, said: “As Singapore emerges from Phase 2 (Heightened Alert) with an estimated 70% of the population completing the two doses of vaccine, we foresee the office crowd returning to the CBD. With its strategic location enjoying high footfall throughout the day and diversified tenants, 17 Circular Road is an exceptional investment opportunity as Singapore transitions towards COVID resilience.”
The guide price for 17 Circular Road is $10.8 million, which translates to approximately $3,913 per square foot on the floor area. As the shophouse is zoned “Commercial”, foreigners and companies are eligible to purchase the properties. No Additional Buyer Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) will be imposed.
“Shophouses in the Circular Road / Boat Quay precinct have always been highly sought after due to their prime location. With stable rental income stream and a 999-year tenure which is akin to freehold, 17 Circular Road is a rare find in today’s market”, Ms Yap shared.
The sale will be conducted through an Expression of Interest exercise which closes on Thursday, 30 September 2021, at 3pm.
“Raffles Place commercial property loan becomes difficult to get if you are not familiar with banks’ qualifications,” said Mr Paul Ho, chief officer of iCompareLoan.
Commercial properties are generally categorized into Retail, Offices, Conservation shop houses as well as HDB shop houses.
You can get a commercial property loan: –
- As an individual
- Or as a Company
For buying under company name, generally it will be under Private limited company. There are 2 distinctions: –
- Buying for business own use; or
- Buying under investment holding company
The companies will need to have financial statements and proof of profitability to qualify for a bank loan.
For buying under investment holding company, directors or majority shareholders will need to be assessed for Total Debt Servicing Ratio (TDSR). This is where it gets complicated as many business people tend to hold on to multiple properties. Hence the need for debt restructuring becomes important. iCompareLoan mortgage consultants can assist to assess your overall debt situation and devise ways to make suggestions for improvements.
Mr Ho added, “For those that need Raffles Place commercial property loan to complete the sale, they must be aware that many applications for commercial mortgage loans are delayed or rejected because buyers are not familiar with loan qualifications or of how to apply for such loans.”
Access to commercial mortgage loans is often hindered by unfamiliarity with loan qualifications, the lack the relevant financial knowledge and / or the resources to engage professional mortgage broker services to manage and address their obligations and financial liabilities as business owners. The terrain to apply and qualify for loans is also uneven because creditors are not just banks but finance companies and other licensed lending entities whose security arrangements may be different or more complicated.
When considering commercial mortgage loans, borrowers should seek out lenders who are willing to fund the loan under acceptable time constraints, keeping in mind their general creditworthiness. Borrowers should look at both bank and non-bank funding in order to get their needs met in a timely manner.
Asking questions and obtaining unbiased evaluations will reduce delay and frustration. Fortunately, new lenders have emerged to challenge banks on their traditional terms, so borrowers have more leverage now than ever before when seeking commercial loans.
Servicing your loan every month and seeing your bank balance taking a dip can be quite depressing. But what if you had a chance to lower your mortgage payment or even raise more funds on your property? When the window opens for an option to switch to another financial provider, it should be considered as it offers you an opportunity to get better terms from your previous loan. This is similar to refinancing for home loan.
This means that many owners of commercial properties are compelled to refinance every 2 years or else the interest cost will eat them alive. Commercial property includes retail, office, HDB shophouse, strata title shops, conservation shophouses, hotels, commercial buildings and mixed development.
If you hold a commercial property, you are likely running a business there or an investor – whether as an individual or under a corporation or investment holding company. Any decision would probably require you to do a cost-benefit analysis. The main reasons for refinancing or switching to a loan from another financial institution include raising cash, capitalizing on low interest rates to cut financing costs and a change in loan tenure.
