Ravi Chandran
A rare strata portfolio comprising 59 freehold shop units in Ming Arcade (collectively known as “the portfolio”) is available for sale via an Expression of Interest (EOI) exercise. The freehold Ming Arcade is a seven-storey strata-titled commercial building with three basement storeys.
Completed in the 1980s, the strata portfolio has a total of 88 strata shop units. Offered for sale are 59 strata shop units of sizes ranging from about 140 to 334 sq ft and with a combined strata floor area of approximately 11,410 sq ft. Representing 32.7% of the development’s total Share Value, the units in the portfolio are spread across every storey from basement 1 to the sixth storey.
Conveniently located near the junction of Orchard Road and Cuscaden Road, Ming Arcade is a short stroll from a plethora of amenities including restaurants, retail shops, entertainment and lifestyle establishments. Other amenities in the vicinity of the strata portfolio include the premier medical facilities at Camden Medical Centre, Gleneagles Medical Centre and Hospital, prestigious clubs like Tanglin Club and American Club as well as the Singapore Botanic Gardens which is a UNESCO World Heritage site.
The immediate precinct is undergoing exciting rejuvenation anchored by The Singapore EDITION, a first-to-the-city luxury boutique hotel redeveloped on the former Boulevard Hotel site, the future Artyzen Hotel sited behind Tanglin Shopping Centre, the redevelopment of Park House as well as an upcoming luxury residential project developed by a consortium comprising SC Global, New World Development Company and Far East Consortium International.
The strata portfolio is up for sale by Expression of Interest at the guide price of $51 million.
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Jeremy Lake, Managing Director, Capital Markets, CBRE said, “The portfolio presents a rare opportunity for investors to gain a foothold in the prime Orchard Road vicinity. At the guide price of $51 million (approximately $4,470 psf), we expect strong interest as the affordable quantum makes it attractive to small and mid-sized developers as well as family offices, real estate funds and high net worth individuals who are seeking capital appreciation in the medium to long term. Furthermore, as the portfolio is zoned ‘commercial’, it is not subject to Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD), and are eligible for purchase by local and foreign buyers.”
Redevelopment options for th estrata portfolio include medical suites, office and retail developments as well as hotel and mixed commercial and residential uses, subject to the relevant authorities’ approval and payment of a development charge, where applicable. Recent strata medical suites at Gleneagles Medical Centre, located along Napier Road, were sold in the range of $9,300 psf to $10,000 psf.
Ming Arcade stands on a 12,132 square feet land that is zoned for commercial use with a gross plot ratio of 4.2 and a maximum height of 20 storeys. Up to the approved gross floor area (GFA) of 55,046 sq ft for commercial use, no development charge is payable.
CBRE is the sole marketing agent for this Expression of Interest Exercise of the strata portfolio which closes on 21 November 2018, Wednesday at 3 pm.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use.
Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the strata portfolio which us up for sale by Expression of Interest 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.
“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.”
https://www.icompareloan.com/resources/buying-commercial-versus-residential-property-singapore/
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