CBRE, announced on 19 April that it is offering for sale a prime 999 year leasehold strata retail unit located at the basement level of The Adelphi at 1 Coleman Street.
CBRE, which is the exclusive marketing agent for the sale, did not disclose the guide price for the prime 999 year leasehold strata retail unit.
Located just next to the escalator within The Adelphi, which facilitates high visibility and footfall, the unit has a strata area of 4,090 sq ft and is fully leased to a KTV tenant. While the unit is currently approved for KTV use, it was previously approved for restaurant use.
Well known among the locals as the go-to place for hi-end audio equipment, The Adelphi is a mixed-use 10-storey development in the heart of City Hall. It comprises a five-storey retail podium and a six-storey office block with four levels of basement parking offering 382 carpark lots. The basement level of the retail podium, where the subject property is located, features a myriad of F&B offerings that are popular among office workers within The Adelphi and nearby office developments.
As the prime 999 year leasehold strata retail unit is a commercial property, foreigners are eligible to purchase the property. There is no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the property.
Mr Clemence Lee, Senior Director, Capital Markets, Singapore at CBRE, said, “With the completion of Funan DigitaLife Mall and Capitol Piazza, the City Hall area has rejuvenated into a bustling retail, F&B and lifestyle precinct located at the doorstep of the Central Business District. We are confident that the property will draw strong interest from astute investors who are looking to acquire a prime strata retail unit within the City Hall area to capitalize on its vibrancy.”
The Adelphi benefits from its strategic location, being just a short walking distance from City Hall MRT Interchange station and surrounded by many landmarks. They include National Gallery Singapore, Funan DigitaLife Mall, Capitol Singapore which features a 977-seater theatre, retail mall, luxurious residential and the ultra-luxurious six-star 157-key Capitol Kempinski Hotel. Other notable new developments nearby include Duo Tower and The South Beach.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said: “the sale of the prime 999 year leasehold strata retail unit at Adelphi comes at a time when retail rents remain in doldrums. But still, the retail property market is expected to stabilise in 2021 and recover gradually thereafter.”
An earlier research by Colliers International said that ground-floor rent on Orchard Road declined 2.6% HOH in H2 2020 to SGD37.24 per sq foot per month, while that of Regional Centres declined 2.3% HOH to SGD31.68 per sq foot per month. This brings the average retail rental decline in 2020 to 7.2% YOY, the worst in their record.
Jonathan Denis-Jacob, Director, Head of Consulting and Advisory Services, said, ” Brick-and-mortar retail will remain relevant and is here to stay, especially for global retailers. While we saw several high profile retail brand closures, although not all these were strictly related to Covid-19, we also saw some resilient brands quickly backfilled these vacated space with new concepts. The delivery format and the evolving experience to consumers will continue to change. We have seen a rapid take-up of a large prime retail footprint despite the ongoing pandemic. For example. the three former Robinsons’ spaces were taken over very quickly by major retailers for their concept stores such as IKEA at JEM, and more recently, BHG at Raffles City and Courts at The Heeren.”
With the easing of restrictions, retail sales saw an improvement to a 4.5% decline YOY in December, as supermarkets, IT products, furniture/household products and sporting goods record double-digit sales growth. The recovery is, however, uneven among different trades.
“With this uneven recovery, landlords will rejig tenant mix and pivot their strategies leading average retail rents to remain flat in 2021. Rents could improve thereafter with widespread virus containment and resumption of travelling,” said Tricia Song, Head of Research for Singapore at Colliers International. “
A saving grace is the limited 2021-2025 islandwide supply at 0.8% of total stock p.a. vs the 10-year historical average of 1.1%. In addition, the new supply is mostly concentrated in suburban and fringe areas, where there are well-defined population catchments.”
Investors’ confidence in the Retail property market remains strong despite the industry going through one of the worst retail crisis in history as full-year transaction volume in 2020 reached SGD2.9 billion, reflecting a 29.5%YOY decline.
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