SINGAPORE - A prime four-storey conservation shophouse at 21 New Bridge Road has been launched for sale via tender at $19.5 million, Colliers International said.
The seller will bear the additional cost to top up the land tenure to a fresh 99-year lease, and has also committed to undertake addition and alteration (A&A) works to build out the rear extension from the current four storeys to up to six storeys.
The valuation price of $19.5 million translates to around $3,200 per square foot (psf) based on the proposed total gross floor area (GFA) of 6,062 square feet (sq ft) after the refurbishment and lease top-up, according to Colliers.
The shophouse sits on a site spanning 134.1 square metres (sq m) or about 1,443 sq ft, Its 99-year tenure began from Dec 27, 1928, which leaves about eight years remaining.
Situated within a conservation area, the site is zoned for commercial use with a plot ratio of 4.2 under the Urban Redevelopment Authority's Master Plan 2014. It has an allowable building height of up to 18.35 metres, or equivalent to about six storeys based on the height of surrounding shophouses, Colliers noted.
Steven Tan, director of capital markets at Colliers International, said: "We believe this property presents investment upside with untapped potential."
"It currently has an approved GFA of 468.4 sq m with a plot ratio of 3.49, which could be maximised to offer 563.22 sq m of GFA under the prescribed plot ratio of 4.2."
The buyer will also be able to actively participate in the design stage of the A&A works for the rear extension, to ensure that the refurbishment will suit its needs, Mr Tan added.
The shophouse is located opposite The Central shopping mall in District 1, and sees high footfall as it is situated between a restaurant and a coffeeshop, according to Colliers. The property is also within walking distance to the central business district, Boat Quay and Clarke Quay.
Public transport options nearby include the Clarke Quay MRT station across the street as well as the Raffles Place MRT interchange station.
The shophouse is offered for sale on a sale-and-leaseback arrangement with a yield of 4 per cent on a "two years plus two years" (2+2) lease structure.
Due to its commercial-use zoning, the additional buyer's stamp duty and seller's stamp duty are not applicable. The sale is also open to both local and foreign investors.
The tender will close on Nov 27 at 3pm.
"We expect demand for shophouses to remain relatively consistent in the next three years, particularly from boutique investors due to the low capital quantum required," Mr Tan said.
"In addition, shophouses offer intrinsic value owing to their vintage charm and limited supply; they are also not subject to the recent tax hikes in residential sector. These factors make shophouses an appealing real estate asset class that are in high demand."
Shophouse transactions in Singapore with a value of $10 million and above hit an all-time high in 2018 at $834 million, according to Colliers Research.