Peninsula Plaza strata retail units relaunched for sale at reduced price

by • August 31, 2019 • RetailComments (0)639

Peninsula Plaza strata retail units price reduced from $16 million to $13.5 million reflecting yields in excess of 3%

JLL, as the exclusive marketing agent, on Aug 29 offered for sale two prime 999-year leasehold strata retail units located at the basement level of Peninsula Plaza.

Peninsula Plaza strata retail units

Image credit: JLL

Located in the heart of City Hall, Singapore’s Civic District, Peninsula Plaza is a mixed-use 30-storey development comprising an office tower with a 5-storey retail podium. Its retail podium offers a myriad of F&B, retail and service offerings. The F&B offerings are mainly located at the basement which is filled with restaurants and eateries, popular amongst tourists and locals alike. Due to its outstanding location, Peninsula Plaza bustles with activities from day to night. The development is located within a short walking distance to City Hall MRT Interchange Station.

Occupying a prominent location at the basement of Peninsula Plaza, the two units for sale have direct escalator access from Level 1. The contiguous units have a combined strata area of 4,779 sq ft and are fully leased to 5 tenants, which includes 2 restaurants and 3 retail tenants. The units are highly accessible and enjoys high footfall.

City Hall is a popular cultural and retail destination that is currently undergoing rejuvenation, with the newest development in the area being the revamped Funan Mall. Funan Mall consists of a six-storey retail mall, two office towers and a tower of co-living serviced apartments. Key tenants include Golden Village, Courts, Newstead Technologies, Lenovo Flagship Store as well as home-grown boutique brands such as Carrie K, Keepers and Love Bonito. Over at the Capitol, the ultra-luxurious six-star Capitol Kempinski Hotel recently opened its doors to guests in Q4 2018. Other notable new developments in the area includes Duo Tower and The South Beach.

Mr Clemence Lee, Senior Director, Capital Markets, JLL, said: “The property was initially launched for sale in January this year with a guide price of $16 million. Upon the close of the EOI, we received a few offers which fell short of the owner’s expectation. The property was subsequently withdrawn from the market.

With the new Funan Mall and revamped Capitol Piazza adding vibrancy into the area, we have started receiving renewed interest from investors who are looking to purchase prime strata retail units within the City Hall area to capitalize on the potential capital and rental upside. As such, we have decided to relaunch the property for sale to offer buyers another opportunity to consider this exceptional asset. With the price lowered to $13.5 million, the yield of above 3% is compelling for a 999-year property and we are confident that the property will draw strong interest from astute investors.”

As this is a commercial property, foreigners are eligible to purchase the Peninsula Plaza strata retail units. There is no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the Peninsula Plaza strata retail units.

The guide price for the Peninsula Plaza strata retail units is $13.5 million, which translates to about $2,825 per sq ft on strata area.

The sale of the Peninsula Plaza strata retail units will be conducted through an Expression of Interest exercise which closes on Thursday, 3 October 2019 at 3pm.

A recent research report said that more interest is seen in strata titled retail units. The report by Knight Frank said that it envisages the interest in strata titled retail units to remain healthy for the rest of 2019, given the higher cost of acquisition for residential units. Separately, the low interest rate environment is expected to continue as the US looks to cut the Fed interest rate, making investments in strata titled retail units more appealing, it added.

Another recent research by CBRE said that retail property landlords may be relenting on rents in favour of higher occupancy. The CBRE report noted that in Q2 2019, URA’s retail property rental index (Central Region) saw its second consecutive quarter of decline.

Mr Paul Ho, chief mortgage officer of iCompareloan, commenting on the trend in the retail property segment said, “considering the fact that consumers are cautious and the less than upbeat sentiment caused by the trade war, as well as the threat of a technical recession, it makes good sense for retail property landlords to rethink their pricing strategy.”

“Such pricing re strategy by retail property landlords will ensure that occupancy does not experience a freefall,” he added.

How to Secure a Commercial Loan Quickly

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