A prime four-storey conservation shophouse at 21 New Bridge Road has been launched for sale via tender at $19.5 million, also Colliers International said.
The vendor will bear the additional price to leading up the land tenure into a new 99-year lease, and has also committed to undertake addition and alteration (A&A) functions to construct out the rear expansion from the present four storeys to around six storeys.
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The valuation cost of $19.5 million translates to around $3,200 per square foot (psf) based on the projected total gross floor area (GFA) of 6,062 square feet (sq feet ) after the refurbishment and lease top-up, according to Colliers.
The shophouse sits on a website spanning 134.1 square metres (sq m) or about 1,443 sq feet, Its 99-year tenure began from Dec 27, 1928, which leaves about eight years remaining.
Situated within a conservation area, the website is zoned for commercial use with a plot ratio of 4.2 beneath the Urban Redevelopment Authority’s Master Plan 2014. It has an allowable building height up to 18.35 metres, or equivalent to about six storeys based on the elevation of encompassing shophouses, Colliers noted.
Steven Tan, manager of capital markets at Colliers International, said:”We consider this land gifts investment upside with untapped potential”
“It now has an approved GFA of 468.4 sq m with a plot ratio of 3.49, which might be maximised to provide 563.22 sq m of GFA beneath the prescribed plot ratio of 4.2.”
The purchaser will also be able to actively participate in the design stage of this A&A functions for the rear expansion, to guarantee that the refurbishment will satisfy its requirements, Mr Tan added.
The shophouse is located opposite The Central shopping mall at District 1, and sees large footfall as it’s situated between a restaurant and a coffeeshop, according to Colliers.
Public transport options nearby include the Clarke Quay MRT station across the road as well as the Raffles Place MRT interchange station.
The shophouse is provided for sale onto a sale-and-leaseback arrangement using a return of 4 percent on a”2 years and two years” (2+2) lease arrangement.
Owing to the commercial-use zoning, the additional purchaser’s stamp duty and vendor’s stamp duty are not applicable. The sale is also open to both local and overseas investors.
“We anticipate demand for shophouses to remain relatively constant at the subsequent 3 years, particularly from boutique investors as a result of minimal capital quantum demanded,” Mr Tan said.
“In addition, shophouses provide intrinsic value due to their vintage charm and restricted distribution; they are also not subject to the current tax hikes from residential industry.
Shophouse transactions in Singapore using a value of $10 million and above hit an all-time large in 2018 at $834 million, according to Colliers Research.