Freehold shophouse in Chinatown for sale at $27.6 million
A freehold shophouse at 28 Stanley Street has been put up for sale in an expression of interest exercise.
The four-storey conservation shophouse features a roof terrace balcony and occupies a land area of 1,729 sq ft with a gross floor area of about 6,485 sq ft, said real estate agency Auctionjia.
image credit: AuctionJia
4-storey freehold shophouse is located in Telok Ayer, in the heart of Central Business District.
The freehold shophouse is approved F&B for ground and first floor and is tenanted with immediate rental income. Auctionjia said foreigners are eligible to purchase the freehold shophouse. Additional Buyers Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD) are not applicable for the sale of this property.
Referring to the record price of $4,259 per sq ft that was fetched at the sale of the nearby 21 Boon Tat Street shophouse, AuctionJia said it is looking to at least match the price.
With a gross floor area of about 6,485 sq ft, the freehold shophouse is expected to close at $27.6 million.
The freehold shophouse is a stone’s throw away from Telok Ayer MRT station. The expression of interest exercise closes at 2pm on Wednesday (Dec 12).
With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.
The government’s swift response to curb home price growth in July, has tampered the prospects of residential properties as attractive investments. Investors looking for alternatives to park their money could divert their attention to shophouses as they are not subjected to this round of purchase or sales restrictions.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Mr Paul Ho, chief mortgage consultant at iCompareLoan, said that the owners of the redevelopment site are smart to put the aging buildings to put the property on the market before the collective sale window closes. Mr Ho added that the subdued residential property market enthusiasm is also a big blow to en bloc beneficiaries shopping for a replacement property, as well as investors.
“Whatever decision en bloc sale committee makes, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners,” said Mr Ho.
Owners of property which is being collectively sold must be mindful that as collective sale process takes 20 to 30 months to complete, and that during this time, they do not have sufficient funds for down-payment – and also their CPF Ordinary Account funds are tied up in the property – meaning they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
Mr Ho pointed out that the rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
He said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
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