Six freehold shophouses in Serangoon Road sold for $62.5 million amid healthy interest in commercial properties - PropNex

26 January 2023, SINGAPORE – PropNex Realty, the largest real estate agency in Singapore has today announced the successful sale completion of a portfolio of six adjoining freehold shophouses at 322 to 332 Serangoon Road for $62.5 million. The sales tender was launched by PropNex, the exclusive marketing agent for the properties on 2 August 2022 and the tender closed at 2pm on 9 September 2022.

The site on which the shophouses sit is currently zoned for commercial use with a gross plot ratio of 3.0, under the URA Master Plan 2019. The plot can potentially be redeveloped into a 6-storey commercial building offering a gross floor area (GFA) of 27,125 sq ft. The sale price of $62.5 million translates to $2,304 psf per plot ratio (psf ppr) based on the potential GFA of 27,125 sq ft.

As the site is zoned for commercial use, the buyer will not be subjected to the additional buyer’s stamp duty (ABSD) nor the seller’s stamp duty (SSD).

Tracy Goh, Head of Investment and Collective Sales at PropNex, said, “We received a number of enquiries for this portfolio of freehold shophouses from investors, including high net worth individuals and family offices. 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. 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 six 2-storey shophouses in District 8 are fully-leased to Eating House and F&B operators including ABC Nasi Kandar and Chinese eateries on the ground floor, while the space on the second level are also fully-leased to public entertainment operators.

There are numerous commercial offerings nearby. The shophouses are situated next to Centrium Square and opposite the City Square Mall. Other amenities in the area include Mustafa Centre, Parkroyal On Kitchener Road, Holiday Inn Singapore Little India, and the Farrer Park Hospital.

Ms Goh added, “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. As more people return to their workplaces and as tourism picks up, this could translate to more demand for F&B and retail services, which will then benefit commercial property owners and landlords.

“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.”