The new owner has the option to redevelop the site into a six-storey commercial building with a gross floor area of up to 27,125 sq ft, says PropNex (Picture: PropNex Realty)
SINGAPORE (EDGEPROP) - A portfolio of six adjoining freehold shophouses on Serangoon Road has been sold for $62.5 million, according to a Jan 26 press release by PropNex Realty, who brokered the deal. The shophouses were launched for sale by tender last August with a guide price of $63 million. The sales tender closed on Sept 9, 2022.
Read also: Portfolio of six freehold shophouses on Serangoon Road for sale at $63 mil
The two-storey shophouses, located at 322 to 332 Serangoon Road in District 8, sit on a site zoned for commercial use with a gross plot ratio of 3.0. The ground-floor units of the shophouses are fully-leased to F&B operators, while the second-floor units are fully-leased to public entertainment operators.
The portfolio received “a number of enquiries” from investors, including high net-worth individuals and family offices, says Tracy Goh, PropNex’s head of investment and collective sales. “They are attracted to the properties’ prominent location in the city fringe – with double frontage to Serangoon Road and Kitchener Road – as well as proximity to various amenities and being opposite the Farrer Park MRT station,” she observes.
As the site is zoned for commercial use, the buyer will not be subjected to the additional buyer’s stamp duty (ABSD) or seller’s stamp duty (SSD).
Goh adds: “Furthermore, these shophouses are not under conservation and the buyer can choose to redevelop them in the future to unlock greater value from the potential increase in GFA.” The plot can potentially be redeveloped into a six-storey commercial building with a gross floor area (GFA) of 27,125 sq ft. According to PropNex, the sale price translates to $2,304 psf per plot ratio (psf ppr) based on the potential GFA.
Goh believes commercial properties in good locations will continue to draw investor demand. “We expect well-located commercial properties – particularly near employment areas and tourist attractions - to continue to be on the radar of investors, riding on the optimism from Singapore’s successful transition to living with Covid-19 and the reopening of national economies.” (Find Singapore commercial properties with our commercial directory)
“While global headwinds and rising interest rates may weigh on sentiment in the real estate market, we anticipate that the commercial property sector – shophouses, strata office space, commercial land – will continue to appeal to investors as these properties are not subjected to the hefty ABSD,” Goh adds.
Table showing other recent commercial transactions along Serangoon Road (Source: EdgeProp Research)
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