Buyer has the flexibility to redevelop the Serangoon Road freehold two-storey shophouses pair into a mixed-use development
CBRE announced on Feb 4 that it has been appointed as the sole marketing agent for the sale of a corner pair of freehold two-storey shophouses at 24 and 26 Moonstone Lane. The Serangoon Road freehold two-storey shophouses pair are offered for sale as a bundle by Expression of Interest. Interested parties are invited to submit their offers by 11 March 2020 at 3pm.
Located off Serangoon Road, the Serangoon Road freehold two-storey shophouses pair enjoys prominent frontage of about 11 meters along Moonstone Lane and has an average depth of 25 meters. The Serangoon Road freehold two-storey shophouses pair occupy a total site area of approximately 2,877 square feet and have a combined existing built-up area of approximately 4,628 square feet.
Under the 2019 Master Plan, the Serangoon Road freehold two-storey shophouses pair are zoned “Residential with Commercial at 1st Storey” with a gross plot ratio of 3.0 and a building height of up to six storeys. Consequently, the subject property can be redeveloped into a mixed-use development with total maximum allowable gross floor area of approximately 8,632 square feet, subject to relevant authorities’ approval.
The shophouses are currently fully tenanted which can provide the successful buyer with immediate rental income stream. Both units are leased to retail shops and enjoy the convenience of having on-street car parking lots right in front at the doorstep.
Indicative pricing for the Serangoon Road freehold two-storey shophouses pair is S$6.6 million, which translates to about S$944 per square foot on the proposed total gross floor area of 8,632 square feet. Subject to the authorities’ confirmation on the development baseline, the development charge payable to maximize the plot ratio is estimated to be approximately S$1.55 million.
Mr Clemence Lee, Senior Director of Capital Markets at CBRE, says, “Compared to shophouses located in the conservation areas, shophouses such as the subject property that are located in non-conservation areas will give the buyer more flexibility in redevelopment options. And as redevelopment opportunities in the Kallang Planning Region are rarely made available, we expect keen interest from developers and contractors who are seeking such occasional opportunities that are also of palatable sizes. The subject property will also appeal to private investors who are always on the lookout for well-located freehold shophouses.”
“The buyer can also expect to benefit from the subject property’s strong capital appreciation over the medium term. This is on the back of URA’s vision to transform areas along the Kallang River into a bustling lifestyle hub, as well as the properties’ proximity to two growing neighborhoods nearby – Bidadari and Kallang Whampoa which are expected to accommodate 13,000 new residential units by 2023,” adds Mr Lee.
Located less than ten minutes’ drive to the Central Business District, the Serangoon Road freehold two-storey shophouses pair enjoy seamless connectivity to the rest of the island via major expressways and arterial roads. The numerous condominiums in the vicinity such as The Poiz Residences, The Venue Residences and Shoppes, and the upcoming Jui Residences will also provide a ready catchment.
Mr Paul Ho, chief mortgage officer at iCompareLoan said, “properties such as the Serangoon Road freehold two-storey shophouses pair are perceived as attractive investments because they can hold their values because of their location and the freehold nature of the properties. Shops and shophouses are also valued because they give prominent presence to a business entity for them to be visible in a highly competitive environment.”
Mr Ho added, “the Masterplan promises to inject more new homes and work places along the Waterfront of Kallang River. This makes the shophouses for sale an attractive proposition.”
The Kallang River presents rejuvenation opportunities for new homes, work places, recreation and community spaces. With its route winding through the central region of Singapore, both public and private housing will be introduced in precincts along the river to enjoy the great connectivity.
As efforts are being made to improve connectivity, the river too will be made more scenic for nearby residents and visitors. Several stretches of waterways at Upper Boon Keng Road to Sims Avenue, Potong Pasir, and Kolam Ayer have been given a facelift through the PUB’s Active, Beautiful, Clean Waters projects. Other stretches along Kallang River are also being studied for such improvements.
At the ‘Kallang Alive!’ Sports Hub area, Sport Singapore is introducing more sporting and community facilities to strengthen its standing as an inclusive sporting precinct. The nearby conserved Old Kallang Airport can also be put to a variety of community, sports and recreational uses for all to enjoy. More intermediary habitats can also be provided along the river for biodiversity and wildlife to thrive.
The existing Kallang Industrial Estate will also be transformed in the longer term into an attractive mixed-use precinct along the waterfront.
The biggest gainers following the 2018 property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use said one research. 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 and encumbrances.
Properties such as the Serangoon Road freehold two-storey shophouses pair 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.
Buyers or investors who are interested in the Serangoon Road freehold two-storey shophouses pair should consider approaching a mortgage broker who will be able to guide them through the best commercial loans that are available for the purchase of the prime properties.