Hoa Nam Building, a mixed-use building at 27 Foch Road is up for collective sale at $160 million.
Huttons Asia, the sole marketing agent for the en bloc sale of Hoa Nam Building, said that the per plot ratio for the en bloc sale is $1,866 per square feet.
Founded in 2002, Huttons Asia is one of the largest real estate agencies in Singapore. Its real estate marketing and consultancy services cover the full spectrum across the residential, commercial, industrial and executive condominium sectors, in both the primary and secondary markets of Singapore. In addition, they market international projects from UK, Australia, Japan and across Southeast Asia. We focus on providing tailored professional solutions to meet the needs of every client and partner.
Hoa Nam Building is a freehold development on a 21,365 sq ft plot off Lavender Street and has a strata area of 56,123 sq ft, and comprises 36 residential units, 14 office units, and 33 shops. Hoa Nam Building is close to three MRT stations – Bendemeer MRT Station on the Downtown Line, Lavender station on the East-West Line, and Farrer Park station on the North-East Line.
Huttons Asia said that the site at which Hoa Nam Building sits has a maximum gross floor area of 85,744 sq ft and could be redeveloped into a new mixed-use or full commercial building. Given its proximity to MRT stations and location outside the prime city fringe, “the site is ideal for co-sharing residential or co-sharing offices with commercial shops and eating outlets on the lower floors”, said Huttons.
The marketing agent added that the Hoa Nam Building site has obtained in-principle approval from URA for a change of use to full commercial, and that if a buyer proceeds with the change, additional buyer’s stamp duty would not be apply.
The tender for Hoa Nam Building will close on Aug 20.
With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Commercial properties such as Hoa Nam Building 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 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.
To buy a commercial or Industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.
Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied, though the payoff may be worthwhile for discerning investors.
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