SINGAPORE (EDGEPROP) - EastGate, a freehold, strata-titled commercial building, is located on a busy stretch of East Coast Road. On the ground floor is the Sri Murugan supermarket that opened last year, a 7-Eleven convenience store and Fresenius Kidney Care East Coast dialysis clinic. The owner of the strata units occupied by the supermarket and dialysis clinic had purchased the two units in 2010.
See also: Changing a neighbourhood, one shophouse at a time
The unit occupied by the Sri Murugan supermarket has a strata area of 5,145 sq ft, while the adjacent unit taken up by the dialysis clinic has an area of 1,313 sq ft. This brings the total strata area to 6,458 sq ft. They account for 11% of the total share value in the development. The unit currently occupied by the supermarket has a permanent approved use as a restaurant, while the unit taken up by the dialysis clinic has been approved for use as a medical clinic.
Developed by Sing Holdings and completed in 1998, EastGate is a 10-storey commercial building with 52 strata commercial units. Besides the three strata retail units on the ground floor, the 49 strata units on the upper floors are office units. As the building is on a corner plot, it has a double frontage along East Coast Road and Brooke Road in prime District 15. (Find Singapore commercial properties with our commercial directory)
The owner of the two strata retail units occupied by the supermarket and dialysis clinic has been receiving “unsolicited offers” over the years. After holding them for the past 12 years, the owner has decided to put them on the market for sale. The guide price for the two freehold ground-floor units is $23.8 million, which translates to $3,685 psf on the strata area.
The seller is looking to sell both units together as they are contiguous, says Yap Hui Yee, Savills Singapore senior director of investment sales and capital markets, the exclusive marketing agent for the space. This means the new owner has the flexibility of exploring change of use, and can be creative in restoring the space and repositioning the retail uses, she adds. The leases on both units will expire sometime in 2024.
“Sizeable retail assets are also very limited in supply, and it is often more appealing to anchor tenants who are looking to operate different concepts in the same unit,” according to Yap.
Some examples of such multi-concept stores include gourmet grocers offering grocery and culinary experiences, cafes with coffee brewing workshops, or gyms with sports care centres. Last year, the average psf rental rate for ground-floor retail shops of 1,000 sq ft or larger in District 15 was 20% higher than retail shops that are below 1,000 sq ft, according to URA data. Rental growth for sizeable retail shops on the ground floor in District 15 jumped 40% y-o-y in 4Q2021, Yap observes.
The strata retail market has also seen the highest transaction activity since 2017, adds Yap. A total of 280 strata retail units changed hands for a total of $496.5 million last year, based on Savills research. “Due to changes in consumer demand and work-from-home arrangements, the strata retail performance in established residential enclaves has been resilient through the pandemic, and many investors have shifted their focus to retail shops situated within mature neighbourhoods,” she comments.
At EastGate, the two retail units enjoy good frontage on the ground floor, especially the supermarket, which is a corner unit. The units feature regular, highly efficient layout and high ceiling.
In terms of location, EastGate is located at the East Coast-Katong enclave, a hub of activity — from F&B to lifestyle establishments in shophouses to shopping malls nearby. A few doors away is 112 Katong, which is newly opened in December 2021 after a two-year asset enhancement. Other malls in the area include Katong V and Parkway Parade. Connectivity in the area will be further enhanced with the upcoming Marine Parade MRT Station on the Thomson-East Coast Line located just a four-minute walk from EastGate. “The area has become more vibrant since the reopening of 112 Katong,” says Yap.
Interest in strata retail units, especially sizeable units that are well-located, is likely to further increase this year, she adds. The property cooling measures in the residential sector last December, and the hike in property tax for high-value residences, may divert more high-net-worth individuals and family offices to explore investing in strata commercial units instead. As the units at EastGate are zoned for commercial use, foreigners and companies are eligible to purchase, and will not be subjected to additional buyer’s stamp duty or seller’s stamp duty.
The sale of the two strata retail units at EastGate will be conducted via an expression of interest exercise that will close on March 28.
Check out the latest listings near EastGate, East Coast Road, District 15, Marine Parade MRT Station