http://www.businesstimes.com.sg/arch...ps-sale-36-38m

Published May 23, 2012

Six People's Park shops up for sale for $36-38m

Seller asking up to $5,240 psf for the 6 adjoining units, subdivided into 33

By Kalpana Rashiwala


SIX adjoining ground-floor strata shop units at People's Park Complex have been put on the market with an indicative price of $36-38 million or about $4,960-5,240 per square foot based on their total strata area of 7,254 sq ft.

The six units have been subdivided for leasing purpose into 33 units of which 29 units are currently leased out. Leases on the other four units expired recently and the units have been deliberately kept vacant to give the new owner more options.

Based on the current rental income of the 29 leased units, the net property yield works out to 4.4 per cent based on a price of $36 million. Assuming all 33 units are leased out, the net yield would rise to about 4.8 per cent, according to Donald Han, special adviser at HSR, the sole marketing agent appointed by the seller, WF Group. The company is a low-profile property investment outfit.

The expression of interest for the sale of the six units closes on June 13. One end of the string of six units faces the taxi stand (along Park Crescent) and car park entrance, while the other faces a busy ground-floor concourse in the development.

The latest transaction in the building was a ground-floor unit of about 291 sq ft that changed hands for $8,946 psf last month. That unit is at the rear of the building, close to the People's Park Food Centre.

People's Park Complex, which is on a site with a remaining lease of about 55 years, is a mixed development near Chinatown MRT Station.

HSR is pitching the six units as an investment in prime retail space for rental returns. "Alternatively this investment would also appeal to end users looking for large prominent ground-floor retail space in the location," said Mr Han.

The strata shop segment is seeing brisk property investment sales, partly driven by the cooling measures affecting the residential property segment which has diverted funds to other segments of the property market. There were 611 transactions of strata retail units for a total $656 million last year, up from 543 deals worth $608.l2 million in 2010.

The first three months of this year saw 208 transactions for a total $156.7 million.

"Strata titled shops especially in central areas remain sought after as the bulk of new supply is located in suburban locations and in "untested" new developments," said Mr Han.