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Author: Ravi Philemon
Neil Road Conservation Shophouses for sale via separate EOI exercises
Colliers International announced on Feb 12 that it is inviting offers for the purchase of a pair of conservation shophouses in Neil Road and three other shophouses with adjoining vacant land in Jasmine Road via two separate Expression of Interest (EOI) exercises.
Healthy interest expected for EOI exercises for Neil Road Conservation Shophouses
Mr Steven Tan, Senior Director of Capital Markets at Colliers International, said, “We expect healthy interest for these shophouses from both local and foreign investors, including high net worth individuals, family offices, developers, and private equity funds. Singapore real estate remains appealing and continues to get investors’ vote of confidence amid uncertain times. This is due in part to Singapore’s strong fundamentals and the long-term growth potential of its property market.”
Conservation shophouses at 65/67 Neil Road
The pair of adjoining 2-storey conservation shophouses with attic at 65/67 Neil Road has an indicative price of SGD15.57 million, which translates to about SGD2,800 per square foot (psf) based on the total gross floor area (GFA) of 5,563.7 sq ft (512.2 sq m). The rare shophouses – located in the prime Tanjong Pagar planning area – sits on a site that spans 2,703.6 sq ft (251.2 sq m) and has a 99-year land tenure, with effect from 4 July 1989.
Situated near the Tanjong Pagar and Outram Park MRT stations on the East-West Line, the property is easily accessible via public transport. It also has prominent frontage onto Neil Road, enjoying heavy pedestrian traffic and high visibility. Being in the vibrant city centre and within the Chinatown Historic District, the area around the shophouses teems with activity, offering a wide range of entertainment and F&B options.
Mr. Tan added, “Apart from their rarity and prime location, these shophouses at Neil Road are attractive as they enjoy strong tenant covenant and has the potential to increase GFA via addition and alteration works, subject to relevant approvals. Additionally, there is ample space at the rear of the property for the loading and unloading of supplies as well as the setting up of an alfresco F&B area, subject to approval. We believe there is an upside for rental revision, particularly in a robust leasing market with limited supply.”
The ground floor of both shophouses and the second floor of 67 Neil Road are currently tenanted to an entertainment establishment which has been leasing the space for many years. Meanwhile, the second floor of 65 Neil Road – which is vacant – will allow the successful buyer to inject new concepts to the revitalise the space. Subject to approval by the Urban Redevelopment Authority, the second floor of the shophouse can be used for restaurant, clinic, commercial school, gym/fitness centre, night club, karaoke, student hostel, and residential use, potentially co-living concepts.
Under the Master Plan 2019, the site is zoned commercial. Owing to the commercial-use zoning, the additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD) are not applicable for the site.
The EOI exercise for 65/67 Neil Road will close at 3pm on 12 March 2020.
Freehold shophouses at 7/9/11 Jasmine Road and adjoining land
The three shophouses – comprising a mix of 2- and 3-storey properties – and an adjoining vacant land (belonging to the owner of 11 Jasmine Road) have a guide price of SGD22.88 million. This works out to about SGD1,185 psf – inclusive of the estimated development charge – based on the proposed GFA of 21,363 sq ft (1,984.8 sq m) upon redevelopment.
Altogether, the three shophouses and the adjacent land, which is located behind the three shophouses, are sited on freehold land with a combined site area of 7,121 sq ft (661.6 sq m). Under the Master Plan 2019, the site is zoned residential with 1st storey commercial and has a Gross Plot Ratio of 3.0.
The site presents exciting redevelopment potential. Subject to approvals, it could potentially be redeveloped into a modern building of up to 4-storey, with commercial space on the first floor and about 16 residential units, based on an average apartment size of 861 sq ft (80 sq m).
Mr. Tan noted, “What makes this site appealing is its freehold tenure, convenient location in an established residential enclave with a large population catchment, and the relatively sizable land area, which offers good redevelopment opportunities. We have been approached by several co-living operators who are looking for suitable properties to operate from, and we believe this site would be ideal for that purpose. The buyer can seek permission from the authorities for change of use to Serviced Apartments to tap the growing co-living sector.”
The site – surrounded by an exclusive landed housing estate – is a stone’s throw from the upcoming Upper Thomson MRT station on the Thomson-East Coast Line and minutes away from the Marymount MRT station on the Circle Line. It is also conveniently situated near numerous amenities, including popular eateries along Upper Thomson Road, Thomson Plaza, Sin Ming Plaza, Junction 8 shopping mall, Whitley Secondary School, Catholic High School, and MacRitchie Reservoir Park.
The EOI exercise for 7, 9 and 11 Jasmine Road and the adjoining land will close at 3pm on 19 March 2020. The shophouses can be purchased separately or collectively.
Properties such as the Neil Road Conservation Shophouses may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property (such as the Neil Road Conservation Shophouses) under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.
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