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With deals breaching the $500-million-mark year to date, industry players expect this year’s total transaction value in the shophouse market to match, if not exceed last year’s $1 billion, reported the Business Times.
This comes as demand for conservation shophouses in Districts 1 and 2 have been especially robust.
For instance, a corner shophouse at 64 Club Street (pictured) within the Central Business District has been put up for sale at a guide price of about $25 million, or $4,450 psf based on the built-up area of around 5,618 sq ft.
The price is set to be the highest psf rate for a conservation shophouse in District 1, said market watchers. Last year, 52 Amoy Street went for around $4,000 psf.
Owned by a company affiliated to Clifton Partners, the 999-year leasehold property – comprising two storeys, an attic level and a basement – underwent a major refurbishment costing about $3 million in 2016.
Approved for restaurant use, the entire shophouse is occupied by Japanese-Italian fusion restaurant Caffe B under a long lease tenure.
Nestled on a 2,250 sq ft site, the shophouse is located in the Telok Ayer Conservation Area, next to private millionaires’ club Chinese Weekly Entertainment Club. As it is zoned for commercial use, foreigners are allowed to acquire the property.
“Having been beautifully restored and fully let to an upscale restaurant, 64 Club Street presents a timely opportunity to parties looking to own a trophy 999-year leasehold, income-producing asset in a vibrant F&B and lifestyle destination,” said Clemence Lee, associate director of capital markets at marketing agent JLL.
“Coveted 999-year leasehold shophouses located in the exclusive Club Street area are highly sought after and seldom available for sale.”
The tender for 64 Club Street will close on 1 June.
Another affiliate of Clifton Partners, which is owned by Singaporean Zain Fancy, is acquiring 70 Duxton Road for $7.55 million.
The group also purchased the neighbouring 71 and 72 Duxton Road for $7.35 million and $7.3 million respectively, in separate deals a few months ago.
“There is strong demand for conservation shophouses in Districts 1 and 2 from high net worth individuals – both locals and foreigners – as well as boutique property funds. These investors believe the limited supply in this asset class bodes well for long-term capital appreciation,” said JB Lin, associate director of Corporate Visions, which brokered the sale of 70 Duxton Road.
Meanwhile, a property investor is buying a three-storey shophouse at 77 Amoy Street for $25 million, which translates to $3,500 to $3,600 psf based on the estimated built-up area.
77 Amoy Street’s buyer also recently sold 75 Amoy Street for over $18 million, which works out to around $3,900 psf on the built-up area.
CBRE capital markets director Sammi Lim noted that while the mood in the shophouse market has improved, investors still prefer “to review more options before committing to a purchase as they seek a mid to longer-term view on investments. Savvy investors know that this asset class will hold value due to its scarcity.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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