What businesses occupy the most expensive retail space?
By Lin Zhiqin
/ The Edge Property |
At least 51 strata retail transactions have crossed the $10,000 psf mark, based on URA’s caveat data so far. These transactions took place as far back as 2005 at just nine developments: Alexandra Central, Centrepoint, Far East Plaza, Lucky Plaza, Novena Regency, Pavilion Square, People’s Park Complex, Sim Lim Square and The Arcade.
A 43 sq ft, ground-floor unit at The Arcade is by far the most expensive on price psf terms. The unit changed hands for $1.4 million, or $32,516 psf, in December 2015. The shop is prominently located at the entrance facing Raffles Place Park and enjoys high footfall. It is currently occupied by a money changer. Only two transactions at The Arcade crossed the $10,000 psf mark. The second transaction was that of a 65 sq ft shop on the second floor that fetched $780,000, or $12,077 psf, in February 2015. It is tenanted by a florist. The Arcade is a 99-year leasehold office-cum-retail development, with three levels of retail space, located within walking distance of Raffles Place MRT station. The Edge Property could not trace the profitability of these two transactions at The Arcade as there were no prior caveat records for the units.
This unit at The Arcade changed hands for $1.4 million or $32,526 psf last December. Thinking of starting a business at The Arcade? Click here
A new-sale transaction for a 161 sq ft unit at Alexandra Central that sold for $2.87 million, or $17,820 psf, in January 2013 ranks second on The Edge Property’s list of most expensive strata retail space psf. The unit is currently leased to an F&B business. According to the business’ director, who wished to remain anonymous, the monthly rent is $7,000 and the business is stable despite the low occupancy rate at the mall. Based on this, the monthly rent is $43.48 psf and gross rental yield is 2.9%.
Transactions at Alexandra Central accounted for eight of the 51 top-dollar deals. All eight were new-sale transactions for ground-floor units that were sold in 1Q2013 at between $10,498 and $17,820 psf. Six of the eight units were unoccupied when The Edge Property visited Alexandra Central on Jan 5; two were occupied by F&B businesses Toast Box and 1-Box Bento.
The third-most-expensive shop in terms of price psf is a 151 sq ft unit located on basement one of Lucky Plaza. The unit changed hands for $2.65 million, or $17,550 psf, in May 2011 and is occupied by a jewellery business.
Based on the matching of caveats, the previous owner enjoyed a profit of $1.79 million, or 19% annualised capital gains, from the sale of this unit bought at $860,700 in April 2000.
Lucky Plaza plays host to 14 of the 51 top- dollar cases that crossed the $10,000 psf mark. There were 58 transactions at Lucky Plaza between 2011 and 2015, with 11 above the $10,000 psf mark. The price ranged from a low of $1,490 to $17,550 psf, with the average at $6,994 psf.
Far East Plaza is another location with some of the priciest retail space, with 14 transactions crossing the $10,000 psf mark. The most expensive is a third-storey, 344 sq ft unit sold at $4.45 million, or $12,919 psf, in December 2012. Along with the two adjacent units, which are also on our list of pricey units at $12,533 and $12,514 psf respectively, the space is occupied by a consignment store offering micro retail “cubes” and shelf space.
Of the 14 transactions at Far East Plaza, 13 were for units located on the third floor. The sole exception was a second-storey, 215 sq ft unit transacted at $2.65 million, or $12,310 psf, in April
2014. According to the tenant, Suresh of Master Tailors, the monthly rent is $8,200. This puts the monthly rent at $38.14 psf and gross rental yield at 3.7%. “This location close to the escalators is important for my business as tailored suits are impulse buys. Although we have many repeat clients, we cannot move to another unit, as they will think that we have closed,” Suresh says.
The most expensive unit at Far East Plaza is occupied by a consignment store.
Six of the entries on the list of priciest retail space are at Pavilion Square, a residential and commercial development located on Geylang Road and slated for completion later this year. All six were new-sale transactions for first-floor units that took place in April 2013. The most expensive was a 118 sq ft unit sold at $1.29 million, or $10,879 psf. There have been 25 new-sale transactions for first-floor units at Pavilion Square, with the lowest price being $7,000 psf and the average at $8,658 psf. For the 25 second-storey units that were transacted, the price ranged from $5,097 to $5,791 psf and the average was $5,523 psf.
Of the 51 transactions that crossed the $10,000 psf mark, 24 were resale cases whose previous caveats can be traced. All 24 sellers reaped profits ranging from $132,000 to $11,680,000, or $3,047,871 on average.
The transaction with the highest profit in absolute quantum was for a 1,281 sq ft, third-floor unit at Far East Plaza that is currently occupied by a fashion boutique. The previous owner bought the unit for $1.32 million in April 2005 and sold it for an $11.68 million profit in October 2014, resulting in an annualised profit of 93%.
Among the 24 transactions, the highest annualised profit of 155% was for the 549 sq ft, third-floor unit at Far East Plaza occupied by the consignment store. This unit was purchased at $600,000 in March 2006 and subsequently resold at $6.88 million in December 2012.
Third-floor unit at Far East Plaza sold for $11.68 million profit in October 2014. Looking to invest in shop units? Start browsing here.
Three most expensive retail units over $10,000 psf mark per development
No. | Location | Floor | Type of business | Area (sq ft) | Type of sale | Price ($ psf) | Price ($) | Contract date |
|---|---|---|---|---|---|---|---|---|
1 | Alexandra Central | 1 | F&B | 161 | New Sale | 17,820 | 2,869,000 | Jan-13 |
2 | 1 | Unoccupied | 140 | New Sale | 17,221 | 2,411,000 | Feb-13 | |
3 | 1 | Unoccupied | 161 | New Sale | 15,646 | 2,519,000 | Feb-13 | |
1 | Centrepoint | 1 | Department store | 344 | Resale | 15,988 | 5,500,000 | Jun-14 |
1 | Far East Plaza | 3 | Consignment store | 344 | Resale | 12,936 | 4,450,000 | Dec-12 |
2 | 3 | Accessories/Salon | 549 | Resale | 12,750 | 7,000,000 | Nov-12 | |
3 | 3 | Consignment store | 549 | Resale | 12,532 | 6,880,000 | Dec-12 | |
1 | Lucky Plaza | B1 | Jewellery | 151 | Resale | 17,550 | 2,650,000 | May-11 |
2 | B1 | Perfume | 151 | Resale | 17,351 | 2,620,000 | Jul-11 | |
3 | B1 | Souvenir | 151 | Resale | 16,424 | 2,480,000 | Oct-10 | |
1 | Novena Regency | 1 | Unoccupied | 161 | New Sale | 10,298 | 1,658,000 | Apr-13 |
1 | Pavilion Square | 1 | Uncompleted | 118 | New Sale | 10,916 | 1,288,128 | Apr-13 |
2 | 1 | Uncompleted | 118 | New Sale | 10,492 | 1,238,048 | Apr-13 | |
3 | 1 | Uncompleted | 118 | New Sale | 10,492 | 1,238,048 | Apr-13 | |
1 | People'S Park Complex | 1 | Bakery | 291 | Resale | 10,997 | 3,200,000 | Feb-13 |
1 | Sim Lim Square | 1 | Electronics | 420 | Resale | 12,024 | 5,050,000 | Nov-12 |
2 | 1 | Electronics | 355 | Resale | 11,268 | 4,000,000 | Jun-11 | |
3 | 1 | Unoccupied | 420 | Resale | 10,714 | 4,500,000 | Mar-13 | |
1 | The Arcade | 1 | Money changer | 43 | Resale | 32,558 | 1,400,000 | Dec-15 |
2 | 2 | Florist | 65 | Resale | 12,000 | 780,000 | Feb-15 |
Source: URA, The Edge Property
This article appeared in The Edge Property Pullout, Issue 713 (February 1, 2016) of The Edge Singapore.
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