SINGAPORE (THE BUSINESS TIMES) - With robust demand seen for shophouses last year, the start of 2020 saw the latest slew of such invetment properties up for sale.
A pair of conservation shophouses along Tras Street in Tanjong Pagar is on the market with a guide price of $12 million for the larger property and $10.8 million for the smaller unit. This works out to about $2,800 per square foot (sq ft) for each shophouse, sole marketing agent CBRE announced on Tuesday (Jan 7).
The larger shophouse has a land area of about 1,494 square feet (sq ft) and total floor area of about 4,257 sq ft, while the smaller unit has a land area of about 1,298 sq ft and total floor area of about 3,852 sq ft.
The three-storey shophouses with attic have a 99-year lease and are zoned for commercial use under the Urban Redevelopment Authority's 2019 Master Plan.
They are a short walk from Tanjong Pagar MRT Station, and are fully leased to food and beverage operators on the ground floor and "soho" or small office/home office users on the upper floors, said CBRE.
Recent transactions of 99-year leasehold shophouses include 34, 36 and 38 Tanjong Pagar Road, which were sold collectively in December 2019 at about $16.4 million or about $3,000 per sq ft; and 76 Pagoda Street, which sold in July 2019 at $13.3 million or $3,500 per sq ft, added CBRE.
As for new commercial developments in the area, Guoco Tower, Frasers Tower and ASB Tower are slated for completion this year.
Clemence Lee, senior director of capital markets at CBRE, said that investors' interest has started to shift to "well-located 99-year leasehold shophouses which are believed to offer better value and higher yields", on the back of rising prices for 999-year or freehold central business district shophouses.
The two shophouses can be bought individually or collectively, and are on sale via an expression of interest exercise which closes on Feb 12 at 3pm.
Separately, two freehold shophouses, one along East Coast Road and the other in Geylang, have been launched for sale by tender.
Their guide prices start from $9.9 million for the East Coast shophouse and from $4.98 million for the Geylang property, marketing agent PropNex Realty said on Tuesday.
The tender exercise for both properties closes at 3pm on Jan 30.
The shophouse on 711 East Coast Road also has a student hostel licence, which allows accommodation facilities for students studying in local primary schools, secondary schools and junior colleges, PropNex said.
The four-storey property has a land area of 2,491 square feet (sq ft) and a total floor area of about 7,670 sq ft. It is zoned for residential and commercial use on the ground floor.
The East Coast shophouse is leased to a retail shop on the ground floor and to a student hostel operator on the upper floors. The nearest MRT station is the upcoming Siglap station on the Thomson-East Coast Line.
PropNex associate division director Loyalle Chin said: "With an appealing rental yield of over 3 per cent and a low per-square-foot (psf) price of around $1,300 psf, this asset will be considered by high-net-worth individuals with an eye for undervalued investments, as well as family boutique real estate players seeking to expand into hospitality."
A neighbouring shophouse on 693 East Coast Road was recently sold at about $2,059psf, Mr Chin noted.
Meanwhile, the corner shophouse on 35, 35A Geylang Lorong 11 occupies a land area of 1,820 sq ft and a total floor area of about 3,225 sq ft.
It has a current plot ratio of approximately 1.8 and an allowable gross plot ratio of 3.0, which gives it redevelopment potential.
The two-storey shophouse has full tenancy, with its ground storey approved for food and beverage operations with a liquor licence, while the upper floor is used for housing. It is zoned for residential and institutional use.
The rental yield of 4.5 per cent for the Geylang shophouse is one of the highest across shophouses in Singapore, Mr Chin said. He noted that the rental yield for a freehold or 999-year leasehold shophouse is typically between 1.8 per cent and 2.5 per cent.
The property's owner is hoping to "sell fast" as the family is seeking to divest the asset for personal reasons, Mr Chin noted.
Located at the junction of Sims Avenue and Geylang Lorong 11, the shophouse is about a 600-metre walk to Kallang MRT Station on the East-West Line.