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Strata shop blues

By Michael Lim / The Edge Property | December 1, 2015 9:45 AM MYT
Tags: mixed-useretailshop
On a Monday afternoon a fortnight ago, Janet Choey was found sitting in one of her hairstyling chairs, checking her hair and phone messages. There were no customers at the salon. “I expected it to be quiet, but not this quiet,” says the proprietor of Blossom Hair Salon.

Choey purchased the 161 sq ft shop unit on the first level of Viva Vista in a sub-sale for $550,000 ($3,406 psf) in 2013 and moved into the new premises six months ago. “This place is quieter than my old shop in Telok Blangah,” she says. Fortunately for Choey, she has regular customers and has also benefited from walkin customers, mainly expatriate tenants of the apartments on the upper floors of Viva Vista.

A five-storey mixed-use development along South Buona Vista Road, Viva Vista has 144 apartments on the second to fifth levels and 106 shops on the first and basement levels. The freehold project was developed by Oxley Holdings and obtained Temporary Occupation Permit (TOP) in September 2014.

Half a dozen of the 41 shops on the first level of Viva Vista were open for business that Monday afternoon. They included a drone store, a nail studio, a tailoring service, a pet spa and salon as well as Pet Lovers Centre.

Chan, the owner of a fresh produce wholesale distribution and trading company, says he moved into his 248 sq ft unit six months ago. He is operating his corner unit as an office, as Viva Vista is near his place of business, namely the Pasir Panjang Wholesale Centre. The rental rate he is paying is about $1,300 a month, which translates into $5.20 psf a month.

It is a far cry from the $8 to $14 psf monthly rate that most investors had hoped to get when they bought their units five years ago at the launch of the project, says Sam Tng, senior team director of property realtor LHG Properties. At $8 to $14 psf, they would have achieved gross rental yields of 3.5% to 6% per annum based on the purchase prices then. However, at $5.20 psf a month, the gross rental yield translates into just 2%, especially for those who purchased the units at higher prices in sub-sales in 2012 and 2013.



The vacant units on the basement level of Viva Vista





Struggling to find tenants


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