Chinese investors push conservation shophouse prices above $7,000 per square foot

A three-story shophouse located situated on Stanley Street recently traded hands for $29 million, as per the caveat filed on the 13th of April. The property is built up to a total area of 6,485 square feet and is situated on a 1,729 sq feet freehold site. The cost of $29 million is the most expensive price ever achieved for a shophouse. If you take a psf price basis this comes to $4,472. The purchaser will be 8M Real Estate, a property investment company with its CEO and founder Ashish Manchharam. 8M has invested in shophouses since the year 2014. JLL brokered the deal.

Novo Place land price on a 12,4449.3 sq m site with a maximum Gross Floor Area (GFA) of 37,348 sq m.

Many other shophouses located situated in CBD along with Chinatown have been sold to buyers for more than $7,000 per square foot According the Richard Tan, senior associate district director of the group at PropNex. Due to confidentiality agreements, he is not able to reveal the transaction’s details. There are no caveats filed for these transactions.

Loyalle Chin who is director of PropNex ShophouseHuat and associate group division director for PropNex Realty, sees “a new wave of foreign investors that include investors from China. “They will be the ones who set records in commercial shophouses in the CBD as well.”

Certain properties have recently been sold. In the early spring the leasehold of 999 years, two-storey shophouse for intermediate conservation along Amoy Street changed hands for $21.8 million. It’s located on a 1,856 sq feet site with an area of 3,115 square feet. The cost is $6,998 per square foot. According to a caveat that was lodged in the matter, it’s 3.112 millions (16.65%) higher than the $18.688 million that the shophouse was sold for in November. The psf-price was around $5,999 based upon the build-up area and Chin made the deal.

Based on an property record search NC Properties is the company that bought the conservation shophouse located on Amoy Street. NC Properties is linked to Hong Kong’s New Century Group, which invested in Telok Ayer and Circular Road conservation shophouses.

CBD as well as Chinatown transactions
On the intersection at the corner of Club Street, the five-storey commercial structure Liberty House changed ownership to a buyer for $92.2 million, as per an early caveat filed in April. The building is located on a leasehold for 999 years site with 7,180 square feet and a gross floor area of 28,876 square feet. The cost is based on a figure of $3,193 per square foot. CBRE was the broker for the deal.

The purchaser will be Union Property Holding, according to an property record search. Zhang Nie, former Singapore director for Chinese Oil trader Unipec has the majority ownership of the company.

The shophouses that are conserved in the Haji Lane-Beach Road region are also highly sought-after and recent sales have surpassed $6,900, as per Chin, a PropNex analyst.

A few Chinese citizens who had been renting the Good-Class Bungalows in the prime area in Singapore or bungalows in Sentosa Cove over the past two years were planning to transform their houses into party venues. “They quickly realized that these were commercial enterprises and could not be permitted in private residential neighborhoods,” Chin says.

Entertainment licence draw
Commercial shops that have a license for nightclubs operated by URA and a public entertainment licenses issued by the Singapore Police Force, allowing the establishment to remain operate until 3am, are sought-after by rich Chinese, Chin adds. “It permits them to host live shows, entertain guests and even open up the space open to visitors.”

For example, Havana KTV Nightclub is currently the tenant of the shophouse that is located along Amoy Street. The lease is due to expire in June the new owner may decide to open an additional nightclub there.

An 999 year leasehold, commercial property, Bugis Point on North Bridge Road, was listed for sale via expression of interest. The sale ended on April 18.

The commercial shophouse, which is six stories high, has an area of 19,902 square feet and is located on a 2784 sq ft site. Bugis Point is listed at an indicative cost of $92 million which is roughly $4,623 per square foot for the floor space. The property is fully leased with tenants who hold licences to entertain the public that allow the operation of their establishment until 3am, according to Chin.

The building is situated with an 18m frontage on North Bridge Road, between Tan Quee Lan Street and Liang Seah Street. It is located opposite Bugis Junction and next to the planned Guoco Midtown integrated development.

Based on Chin, Bugis Point has had “multiple interested parties” and has received multiple offers”. The majority of interested parties are believed to be Chinese.