CBRE announced on 17 Feb that it has been appointed as the sole marketing agent for a pair of freehold two-storey shophouses located at 425 and 427 East Coast Road. With a prominent 10-meter frontage along East Coast Road, the main thoroughfare of the Joo Chiat/ Telok Kurau/East Coast precinct, the subject property enjoys high visibility and footfall throughout the day.
Given the land scarcity in Singapore, demand for shophouses will continue to rise over the long term (image: CBRE)
The freehold two-storey shophouses, which have value-add potential, are to be sold collectively by Expression of Interest; interested parties are invited to submit their offers by 31 March 2021 at 3pm.
Sitting on a freehold land plot of approximately 2,380 square feet, the freehold two-storey shophouses has a total existing built-up area of around 3,960 square feet.
Under the 2019 Master Plan, the site of the freehold two-storey shophouses sits within the Joo Chiat Secondary Settlement Conservation Area and is zoned “Residential with Commercial at 1st Storey” with a gross plot ratio of 3.0.
Consequently, the freehold two-storey shophouses can be redeveloped into a mixed-use development with a maximum allowable gross floor area of approximately 7,140 square feet and a building height of up to five storeys, subject to relevant authorities’ approval.
Indicative pricing for the freehold two-storey shophouses is S$7.8 million, which works out to about S$1,092 per square foot on the maximum allowable gross floor area of 7,140 square feet. The development charge payable to maximize the plot ratio is estimated to be approximately S$3 million, subject to the authorities’ confirmation on the development baseline and review of DC rates every March and September.
Mr Clemence Lee, Senior Director of Capital Markets, Singapore at CBRE, says, “The ground floor of 425 East Coast Road is currently approved for F&B use. With URA being more stringent in granting F&B approvals, shophouses that have already obtained F&B approvals are deemed to be extremely valuable and attractive. In addition, freehold shophouses with value-add opportunities, such as 425 and 427 East Coast Road, have always been highly sought after.
“We expect keen interest from end-users such as F&B operators, or developers and contractors who are seeking such occasional opportunities that are also of palatable sizes. The subject property will also appeal to private investors and family offices who are on the lookout for well-located freehold shophouses to preserve their wealth.”
Depending on the buyer’s inclination, he/she can:
• Enjoy immediate stable rental income, based on the current built-up area
• Value add to the property and fully maximize the allowable built-up area by building a rear extension of up to five storeys, subject to authorities’ approval
• Configure the space to suit own-use requirements or to cater to the needs of the tenants
Subject to authorities’ assessment, the property may be suited for co-working business, medical or healthcare center, F&B and lifestyle retailers, or hostel operators.
Mr Lee adds, “The buyer can also expect to benefit from the subject property’s strong capital appreciation over the medium term – given the upcoming Marine Terrace MRT station on the Thomson East-Coast Line that is about 400 meters away and which will be completed by 2023. ”
The Joo Chiat/Telok Kurau/East Coast vicinity is one of Singapore’s most iconic and storied neighborhoods, having been designated as the first “Heritage Town” in 2011. Much of the precinct’s charm comes from its historical heritage as a Peranakan enclave with colorful shophouses that have been beautifully retained. The area is known for popular F&B establishments, trendy bars and hipster boutiques. Some of the well-known F&B establishments in the immediate vicinity include Alforno, EMOs, Comida Mexicana, Mad Nest, Wolaa Kitchen & Bar, JAG Wine and Beach Road Prawn Noodle.
Mr Paul, chief mortgage officer at iCompareLoan, said that “although the pandemic induced economic downturn makes commercial real estate sales more difficult at the moment, the freehold two-storey shophouses located at 425 and 427 East Coast Road is in a good location and is hard to come by.” Mr Ho believes smart investors who are flush with cash, will resort to value hunting instead of choosing residential properties which are still selling at unbelievable prices.
Mr Ho added that given the land scarcity in Singapore, demand for commercial properties in Singapore will continue to rise over the long term. He pointed out that Singapore continues to be a global financial centre and a trade hub with high livability scores – all of which attracts high net worth investors to the Republic. All these factors will inevitably fuel demand for commercial property in Singapore he added.
Mr Ho believes that value buys in the property market right now are are landed inter-terrace houses where the per square feet price on the built-up area is usually less than $1,000 and commercial properties. But Mr Ho cautioned that the bigger challenge for buyers of commercial property is securing the best commercial loans.
“With the right loan, the buyer can save thousands, if not tens of thousands of dollars,” he said. Adding, “which is why they would have to work with established mortgage brokers who can provide them free service.”
The Katong/East Coast Road area is predominately an affluent residential neighborhood that is characterized by a mix of colorful Peranakan shophouses, high-rise condominiums and landed housing enclaves. Due to the large residential catchment, the area has attracted multiple popular restaurants, bars and hipster cafes. The neighborhood is currently undergoing further rejuvenation with the upcoming Marine Parade MRT on the Thomson-East Coast Line by 2023 and the Asset Enhancement Initiatives being conducted at i12 Katong which is scheduled to be completed by first quarter 2021.
The post Freehold two-storey shophouses at 425 and 427 East Coast Road for sale appeared first on iCompareLoan Resources.
