[UPDATE] Chinese investors drive conservation shophouse prices above $7,000 psf

/ EdgeProp Singapore |
The two-storey conservation shophouse at Amoy Street changed hands for $18.688 million last November and again in early April, for $21.8 million (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - A three-storey shophouse on Stanley Street recently changed hands for $29 million, according to a caveat lodged on April 13. The property has a built-up area of 6,485 sq ft and sits on a 1,729 sq ft freehold site. The price of $29 million makes it the highest absolute price achieved for a shophouse to date. On a psf-price basis, it works out to $4,472. The buyer is 8M Real Estate, a property investment group headed by founder and CEO Ashish Manchharam. 8M has been investing in shophouses since 2014. JLL brokered the deal.
Several other shophouses in the CBD and Chinatown have changed hands for prices above $7,000 psf, according to Richard Tan, senior associate group district director at PropNex. However, due to non-disclosure agreements, he cannot disclose transaction details. And no caveats have been lodged for these transactions.
Loyalle Chin, director at PropNex ShophouseHuat and associate group division director of PropNex Realty, sees "a fresh wave of overseas investors, including those from China. "They are the ones setting record prices in commercial shophouses in the CBD too."
Some properties have recently been flipped. In early April, a 999-year leasehold, two-storey intermediate conservation shophouse along Amoy Street changed hands for $21.8 million. It sits on a 1,856 sq ft site with a built-up area estimated at 3,115 sq ft. The price translates to $6,998 psf. According to a caveat lodged, it is 3.112 million (16.65%) higher than the $18.688 million the shophouse fetched last November. The psf-price was about $5,999 based on the built-up area then, and Chin brokered the deal.
According to a property title search, NC Properties is the entity that purchased the conservation shophouse on Amoy Street. NC Properties is linked to Hong Kong's New Century Group, which invested in Telok Ayer and Circular Road conservation shophouses.
The three-storey conservation shophouse on Stanley Street changed hands for $29 million in April, making it the most expensive by quantum (Photo: Samuel Isaac Chua/EdgeProp Singapore)

CBD and Chinatown transactions

At the corner of Club Street, the five-storey commercial building Liberty House changed hands for $92.2 million, according to a caveat lodged in early April. The building sits on a 999-year leasehold site of 7,180 sq ft with a gross floor area of 28,876 sq ft. The price reflects a price of $3,193 psf. CBRE brokered the deal.
The buyer is Union Property Holding, according to a property title search. Zhang Nie, former Singapore head of Chinese oil trader Unipec, owns the company.
The conservation shophouses in the Haji Lane-Beach Road area are equally well-sought-after, with recent transactions crossing $6,900 psf, notes PropNex’s Chin.
Some Chinese nationals who had rented Good Class Bungalows in the prime district of Singapore or bungalows at Sentosa Cove in the last two years had intended to turn their homes into party houses. "They quickly realised that these were considered commercial activities and not allowed in private residential neighbourhoods," Chin says.
The tender for Bugis Point on North Bridge Road closed on April 18. Interest came from Chinese buyers due to the approval of units for nightclub use and public entertainment licence until 3am (Photo: Loyalle Chin/PropNex)

Draw of entertainment licence

Commercial shophouses with a licence for nightclub use by URA, and public entertainment licence from the Singapore Police Force, allowing them to open until 3am, are highly sought-after among these wealthy Chinese, Chin adds. “It allows them to hold live shows, entertain friends and even open the venue to the public.” (Find Singapore commercial properties with our commercial directory)
For instance, Havana KTV Nightclub is the current tenant of the shophouse along Amoy Street. With the lease ending in June, the new owner can choose to put a new nightclub in.
A 999-year leasehold commercial building, Bugis Point on North Bridge Road, was put on sale by expression of interest, which closed on April 18.
The six-storey commercial shophouse has a total floor area of 19,902 sq ft and sits on a 2,784 sq ft site. Bugis Point has an indicative price of $92 million, or about $4,623 psf, on the floor area. The property is fully leased, with tenants holding public entertainment licences that allow them to operate until 3am, notes Chin.
The building has an 18m frontage along North Bridge Road, between Tan Quee Lan Street and Liang Seah Street. It is opposite Bugis Junction and next to the upcoming Guoco Midtown integrated development.
According to Chin, Bugis Point has seen "multiple interested parties and received several offers". Most of the interested parties are said to be Chinese.

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