A record transaction for a shophouse has taken place in District 1. Located at 21 Boon Tat Street and a part of the Telok Ayer Conservation Area, the 999-year leasehold site has bagged S$16.5 million in price which translates to a rate of S$4,259 psf taking into account its 3,874 sq ft built-up area.
The property agents for this sale stated that this was a record high psf for a District 1 conservation shophouse.
It needs to be mentioned that the prices didn’t breach the S$4,000 psf figure for the past 12 months in this area.
The last big deal happened in August where a 64 Club Street located shophouse that also had 999-year lease tenure bagged S$3,880 psf for the 5,618 sq ft built-up area.
As per media reports James Heng, the founder of Duck & Hippo Group has bought this shophouse using one of his entities.
The local group has been on a buying spree off late and had recently acquired Big Bus Tours, biggest open-top sightseeing tours operator in the world that has its headquarters in London.
Big Bus Tours was officially launched on September 13 and since then seven brands that were owned by Duck & Hippo Group have been working under the Big Bus Tours banner.
Acquisition price for this deal is still shrouded in mystery. It has been understood that Mr Heng shall work with Big Bus Tours in the capacity of a consultant to ensure smooth transition.
Interestingly the 21 Boon Tat Street shophouse would be the latest commercial property in Heng’s portfolio of other conservation shophouses which he owns in Singapore.
These include conservation properties in Amoy Street, Liang Seah Street and Teck Lim Road.
Property analysts have cited the shophouse’s locational advantage as the reason behind its high price tag. As a part of the Central Business District this property’s Level 1 and 2 have been a known destination for food and beverages.
Presently Cheek by Jowl, a restaurant run by Michelin-starred chef has lease of the street level while the attic and second level has a popular bar Freehouse which uses the attic as seating space.
A successful property investor previously held the site which has been categorized as ‘Commercial’ under the 2014 Master Plan by the URA.
It is a short walk from Downtown Line’s Telok Ayer MRT Station and also a few minutes’ walk from Raffles Place interchange.
Going by the present price the rental yield from the property was less than 2%. JLL were the marketing agents for the sale and the property was sold via an EOI exercise that closed on the 20th of September.
In related developments a shophouse located in 22 Ann Siang Road was sold for S$15 million. With an area of 4,300 sq ft the rate translated to S$3,488 psf.
This was revealed by PropNex Realty which had been marketing agents for the sale. While the agency declined to reveal details about the buyer they said that it was bought by a Singaporean HNI.
Located near the under-construction Maxwell station which is a part of the Thomson-East Coast Line, the property has a 999 year lease tenure.
The 3-storey shophouse also has a basement and currently has offices occupying the top floors and Lolla a popular restaurant in the ground floor. The gross rental yield was 1.5% based on the price of the property.
Property agents are divided about this bullish trend in prices. Some are happy with the prices like in the case of 21 Boon Tat Street while others say that such high prices are pushing yield very low.
They cite the fact that there has been a rise in interest rates while rents for F & B businesses have stagnated in the recent months.
Thus, buying at such high prices with the hope that prices would appreciate future isn’t quite justified.
All property watchers have locked their eyes on a corner shophouse block that is located at 2 & 3 McCallum Street and 1 Stanley Street through an EOI.
The property has been priced S$48 million and going by its 10,805 sq ft built-up area the rate would be around S$4,442 psf. Lian Huat Group currently owns the property which spans 3 storeys and an attic.
7-Eleven and a restaurant are occupying the ground floor while rest of the building is occupied by offices. It is estimated that rental yield is 1.5%.
Cushman & Wakefield, Corporate Visions and CBRE are jointly marketing this property.