SINGAPORE, 30 October 2018 – Colliers International (NASDAQ and TSX: CIGI), a global leader in commercial real estate services is pleased to announce the launch of five adjoining shophouses (the Property) at 236 to 244 Geylang Road for sale via Expression-of-Interest (EOI) for an indicative price of SGD28 million.
The freehold Property – located at the junction of Geylang Road and Lorong 10 Geylang Road – is well-positioned to benefit from the ongoing transformation and revitalisation of nearby Paya Lebar regional centre and the Kallang River precinct which will likely bring more buzz and commercial activity to the area.
The shophouses sit on a 7,411-square foot conservation site and have an existing floor area of approximately 21,349 sq ft. Under the 2014 Master Plan, the site is zoned “Commercial” with a plot ratio of 3.0. Owing to the Property’s commercial-use zoning, the additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD) are not applicable.
The indicative price of SGD28 million works out to about SGD1,312 per square foot based on the floor area – more attractive than the SGD1,500 psf achieved for 733 Geylang Road which was transacted in May this year. In the first nine months of 2018, shophouse transactions valued at over SGD5 million each came in at 71 deals which amounted to a total value of SGD983 million. This has surpassed the SGD536 million from 45 transactions (valued at over SGD5 million each) recorded in the corresponding period in 2017.
Mr. Steven Tan (陈添裕), Director, Capital Markets & Investment Services, Colliers International, said, “Shophouses have always been an attractive asset class for property investors owing to their scarcity, prime locations, palatable investment quantum and vintage characteristics. Following the introduction of fresh cooling measures on residential properties from 6 July this year, shophouses have become even more appealing to investors. Colliers Research noted that well-located shophouses with freehold or 999-year leasehold tenures have seen cap rates compress to record low levels of sub-two percent signaling very bullish expectations.”
The five-adjoining shophouses – all comprising three-storey plus attic – are conveniently situated within 700-metre radius to Kallang and Aljunied MRT stations. Nearby amenities include a myriad of food and beverage outlets, boutique hotels and residential apartments. The Property was designated for conservation on 25 October 1991.
Mr. Tan added, “This is a rare investment opportunity and we expect to see keen interest in the Property which has excellent frontage and visibility on Geylang Road. In view of the Property’s proximity to the James Cook University in Sims Drive, we think there is a potential for the prospective buyer(s) to apply to the authorities for a change of use for the site to student accommodation.”
Under Master Plan 2014, the Property can be used for shops, office, commercial school and gym/fitness centre on the first floor. Meanwhile, allowable use for the second to fourth storeys include: Shop, office, and stores selling take-away food. A host of other uses are subject to evaluation, such as pet shop and medical clinic on the ground floor and residential, student hostel, childcare and gym/fitness centre on the upper levels.
Currently, about half of the Property are tenanted to multiple users, including a money changer, café, hair salon, restaurant and an association.
The EOI exercise will close at 3 pm on 22 November 2018.