Ravi Chandran
The Sultan Gate freehold shophouses are right in the heart of the Kampong Glam conservation area
Two prime freehold shophouses located at 33 and 35 Sultan Gate, right in the heart of the Kampong Glam conservation area are for sale via an Expression of Interest (EOI) exercise. CBRE, the sole marketing agent for the sale said the EOI exercise closes on 29 April 2021.
The total built-up area of both shophouses is approximately 3,300 square feet. Enjoying a wide road frontage of approximately 8 meters along Sultan Gate and a depth of approximately 24 meters, the two shophouses occupy a combined land area of approximately 1,771 square feet, which is held under an individual land title.
Both Sultan Gate freehold shophouses come with permanent F&B approval for both Level 1 and 2.
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To be sold as an entirety, the two Sultan Gate freehold shophouses command an indicative price of approximately S$11.55 million, which works out to approximately S$3,500 per square foot on the estimated built-up area.
As the Sultan Gate freehold shophouses sits on a site that is zoned for ‘Commercial’ use under the 2019 Master Plan, there will be no Additional Buyers’ Stamp Duty or Sellers’ Stamp Duty. The opportunity is open to both local and foreign buyers.
Mr Clemence Lee, Senior Director, Capital Markets, Singapore at CBRE said, “It is uncommon to come across shophouse assets made available for sale that have obtained F&B approvals for both levels; typically, F&B approvals are only either for the ground floor or none at all. Over the years, we have seen trendy cafes and F&B establishments mushrooming in Kampong Glam, transforming the locality into a bustling F&B lifestyle destination for locals and tourists alike. The successful buyer can capitalize on the high and self-sustaining footfall to the vicinity by either occupying the property to run their own restaurant or to lease it out to an F&B operator.”
Some popular F&B establishments in the locality include Arabica Coffee, Blu Jaz Café, Rich and Good Cake Shop, Geylang Clayot Rice, Fika Swedish Café and Bistro, RUmah Makan Minang, IStanBlue Meze & Grill and Overrun Ice Cream.
Mr Lee added, “33 & 35 Jalan Sultan presents a timely opportunity for investors looking to acquire an asset within a growth location. Given the introduction of various mixed-use developments such as Duo and South Beach, and upcoming developments such as Guoco Midtown, the redevelopment of Shaw Towers and The M – all of which will propel the vicinity’s transformation into the next hotspot for live-work-play, we are confident of strong interest in the subject property from astute investors who can look forward to capital and/or rental appreciation in the mid- to long-term.”
Sultan Gate freehold shophouses are located within the heart of Kampong Glam conservation area, which is an eclectic hub offering a diverse mix of cultural, entertainment, F&B and lifestyle attractions frequented by both locals and tourists.
Mr Paul Ho, chief mortgage officer at iCompareLoan, commenting on the sale of the Sultan Gate freehold shophouses said, “this will be appealing to investors because it is an alternative to putting money down on residential properties.”
He added, “As far as commercial real estate goes, shophouses are good investments especially in an area like Kampong Glam.”
Potential buyers have to ensure that they have the up to date on the current valuation of the property as it will determine the maximum loan and the possibility of having to top up the equity to qualify for financing a commercial property. Buyers should also use calculators to see if the mortgage payments on the loan is affordable given their income.
A few factors should inform your decision to buy a commercial property:
- Affordable?
Use calculators to see if the mortgage payments on the new loan is affordable given your current salary. Ccommercial property loan calculators help you know the mortgage payments from the different financial providers.
- Change in credit situation
Since the last time you took the loan, has your salary/company’s results/financial position improved or deteriorated? Have you been late in payment of debt? Did you sign on to be a guarantor or taken up more debt? Do you have a tenant? What is the remaining lease? All these factors will be considered when you apply for refinancing as your credit profile will be reassessed.
- Costs
Financing commercial property may lead to costs such as those relating to valuation, legal, etc. Look out for promotions where banks/financing companies waive charges.
- Clawback and lock-in period
Review your letter of offer and read up on the clawback and lock-in period to ensure that financing makes sense for you. If the switch is onerous and costly, it may not be worthwhile.
- Shop around
Once you have done your homework on the above, you can shop around for the financial institution that offers the loan package that suits you and look out for promotions. Make sure you view the loan package from the various financial providers, but do note that there are different rates for properties bought under personal name or company name.
- Documentation
You will likely be asked to provide the following in the application if you apply to finance commercial property. Have these ready on hand if your property is bought under a company name.
- Copy of NRIC/Passport
- Income statement and/or audited financials (corporation)
- Bank statements
- Loan account statement from existing financing company showing repayment history
- Latest CPT withdrawal statement for property to be refinanced (if there is utilization of CPF)
- Title Deed
A good Mortgage broker can assist you to refinance commercial property safely, further more, it’s free of charge as they receive a fee from the bank when a loan is completed. Think of them (mortgage brokers) as Supermarket assistants who can guide you on a number of brands of noodles. Talk to them about your taste, whether you want it a bit salty or sweeter, spicy or not, etc. They will find you the bank loan on the shelf.
