Chinese investors drive conservation shophouse prices above $7,000 psf
A surge of Chinese investments, especially in the CBD and Chinatown areas of Singapore, is pushing up prices for commercial shophouses. A three-storey shophouse on Stanley Street recently changed hands for $29 million, the highest absolute price achieved for a shophouse to date. Meanwhile, a two-storey conservation shophouse along Amoy Street was sold in early April for $21.8 million.
A surge of Chinese investments in the CBD and Chinatown of Singapore is driving up prices of commercial shophouses. The most recent example is the three-storey shophouse on Stanley Street, which changed hands for $29 million in April, the highest absolute price ever achieved for a shophouse. The property had a built-up area of 6,485 sq ft and sits on a 1,729 sq ft freehold site. The price works out to $4,472 psf.
Loyalle Chin, director at PropNex ShophouseHuat, as well as associate group division director of PropNex Realty, notes that “there’s a fresh influx of overseas investors, including those from China, and they are the ones setting record prices in commercial shophouses in the CBD too.”
The underlying owner of the two-storey intermediate conservation shophouse located along Amoy Street, which was sold in early April, is believed to be a Chinese national. It sits on a 1,856 sq ft site with a built-up area estimated at 3,115 sq ft, and was sold for $21.8 million, equivalent to $6,998 psf — 3.112 million (16.65%) higher than the November sale of $18.688 million at $5,999 psf.
At the corner of Club Street was the five-storey commercial building Liberty House, which was sold in early April for $92.2 million, reflecting a price of $3,193 psf. According to Richard Tan, senior associate group district director at PropNex, several other shophouses in the CBD and Chinatown have changed hands for prices above $7,000 psf, though details of these transactions are not disclosed due to non-disclosure agreements.
Tengah EC is a new eco-friendly executive condo located near the Bukit Timah Nature Reserve, offering sustainable features and convenient access to the city centre. Open for application to Singaporean married couples, the development is set to be the first of its kind in Tengah EC the West region with a completion date of late 2013.
Chinese buyers are particularly attracted to shophouses with a licence for nightclub use by URA and public entertainment licence from the Singapore Police Force, allowing them to open until 3am. This allows them to hold live shows, entertain friends, and even open the venue to the public. A case in point is Bugis Point on North Bridge Road, which was put on sale by expression of interest. It has an indicative price of $92 million, or about $4,623 psf on the floor area, and the tender closed on April 18. Interest came mostly from Chinese buyers due to the approval of units for nightclub use and public entertainment licence until 3am.
Overall, it is clear that Chinese investors are heavily pursuing shophouses in the CBD and Chinatown areas, driving up prices and setting records. Chin notes that even those who had rented Good Class Bungalows in the prime district of Singapore or bungalows at Sentosa Cove in the last two years and intended to turn them into party houses, quickly discovered that such activities were considered commercial activities and not allowed in private residential neighbourhoods.