reporter2
11-12-15, 15:50
http://www.businesstimes.com.sg/real-estate/uptick-in-shophouse-sales-attests-to-niche-appeal
Uptick in shophouse sales attests to niche appeal
Scarcity and historical value make it a sought-after property class
Dec 5, 2015
THE shophouse market seems to be showing some buzz in sales - perhaps a final burst of activity before a year-end wind-down.
Recent deals include two acquisitions in the Duxton area totalling S$13.7 million; the buyer is believed to be Spanish tycoon Ricardo Portabella Peralta, who a couple of months ago paid S$18.2 million for a pair of adjoining shophouses along Telok Ayer Street.
This time around, Mr Peralta is acquiring a property along Duxton Hill, with a land area of 1,218 sq ft, for S$9.4 million and another shophouse on a 1,076 sq ft site on Duxton Road for S$4.3 million. The two properties are on sites with respective balance lease terms of slightly more than 70 years.
Other transactions include a pair of shophouses along Club Street that went for S$8 million. The two-storey properties are on a 1,272 sq ft site with a balance lease term of 79 years. The built-up area is about 2,540 sq ft. The ground level is leased to a restaurant. The buyer is a Singapore-incorporated company with a Vietnamese shareholder.
The seller is a company with shareholders that include Clifton Partners, controlled by seasoned property investor Zain Fancy.
Mr Fancy is also a shareholder in another company that is understood to have sold a three-storey shophouse along Pagoda Street for S$12 million. This reflects a 3.7 per cent gross yield based on existing rental income. The ground floor is leased as a shop, the second floor as offices and the third floor, a spa.
The property has a built-up area of about 4,316 sq ft and a land area of 1,486 sq ft. The site has a balance lease of around 79 years.
Also sold recently were 61 Neil Road (S$4.8 million) and 45 Craig Road (S$7 million) - both on sites with 99-year leasehold tenures starting 1989. The Craig Road property's built-up area is around 3,700 sq ft; it is being sold by a Singaporean businessman on vacant possession to a family office, which is expected to lease it out, said Simon Monteiro of Historical Land, who brokered the sale. CBRE handled the sale of the Neil Road property
Commenting on the recent uptick in shophouse deals, Sammi Lim, associate director of investment properties at CBRE, observed: "During the past three to six months, many shophouse buyers have been waiting, comparing deals in the market and evaluating which ones to go into - in terms of location, property specs and of course price. Following negotiations with sellers, the price gap has been bridged, resulting in the string of deals lately."
The volume of shophouse transactions has dropped following the introduction of the total debt servicing ratio framework in late-June 2013. "However transacted prices have moderated only slightly in prime locations with high footfalls such as Chinatown, Telok Ayer and Club Street.
"Shophouses are still a very well sought-after property class for their scarcity, historical value and in some cases, aesthetic appeal," Ms Lim added.
Another attraction of shophouses that are on sites which are fully zoned commercial is that they are open to foreign ownership and not subject to the additional buyer's stamp duty. "To some foreign buyers, acquiring a conservation shophouse is akin to purchasing a boutique building with a piece of history."
Uptick in shophouse sales attests to niche appeal
Scarcity and historical value make it a sought-after property class
Dec 5, 2015
THE shophouse market seems to be showing some buzz in sales - perhaps a final burst of activity before a year-end wind-down.
Recent deals include two acquisitions in the Duxton area totalling S$13.7 million; the buyer is believed to be Spanish tycoon Ricardo Portabella Peralta, who a couple of months ago paid S$18.2 million for a pair of adjoining shophouses along Telok Ayer Street.
This time around, Mr Peralta is acquiring a property along Duxton Hill, with a land area of 1,218 sq ft, for S$9.4 million and another shophouse on a 1,076 sq ft site on Duxton Road for S$4.3 million. The two properties are on sites with respective balance lease terms of slightly more than 70 years.
Other transactions include a pair of shophouses along Club Street that went for S$8 million. The two-storey properties are on a 1,272 sq ft site with a balance lease term of 79 years. The built-up area is about 2,540 sq ft. The ground level is leased to a restaurant. The buyer is a Singapore-incorporated company with a Vietnamese shareholder.
The seller is a company with shareholders that include Clifton Partners, controlled by seasoned property investor Zain Fancy.
Mr Fancy is also a shareholder in another company that is understood to have sold a three-storey shophouse along Pagoda Street for S$12 million. This reflects a 3.7 per cent gross yield based on existing rental income. The ground floor is leased as a shop, the second floor as offices and the third floor, a spa.
The property has a built-up area of about 4,316 sq ft and a land area of 1,486 sq ft. The site has a balance lease of around 79 years.
Also sold recently were 61 Neil Road (S$4.8 million) and 45 Craig Road (S$7 million) - both on sites with 99-year leasehold tenures starting 1989. The Craig Road property's built-up area is around 3,700 sq ft; it is being sold by a Singaporean businessman on vacant possession to a family office, which is expected to lease it out, said Simon Monteiro of Historical Land, who brokered the sale. CBRE handled the sale of the Neil Road property
Commenting on the recent uptick in shophouse deals, Sammi Lim, associate director of investment properties at CBRE, observed: "During the past three to six months, many shophouse buyers have been waiting, comparing deals in the market and evaluating which ones to go into - in terms of location, property specs and of course price. Following negotiations with sellers, the price gap has been bridged, resulting in the string of deals lately."
The volume of shophouse transactions has dropped following the introduction of the total debt servicing ratio framework in late-June 2013. "However transacted prices have moderated only slightly in prime locations with high footfalls such as Chinatown, Telok Ayer and Club Street.
"Shophouses are still a very well sought-after property class for their scarcity, historical value and in some cases, aesthetic appeal," Ms Lim added.
Another attraction of shophouses that are on sites which are fully zoned commercial is that they are open to foreign ownership and not subject to the additional buyer's stamp duty. "To some foreign buyers, acquiring a conservation shophouse is akin to purchasing a boutique building with a piece of history."