Business & Economy Property District 1 shophouse at Boon Tat Street sold at record price of...

District 1 shophouse at Boon Tat Street sold at record price of 16.5 million




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A 999-year leasehold District 1 shophouse at 21 Boon Tat Street in the Telok Ayer Conservation Area is being sold for $16.5 million. Reports say that Duck & Hippo group founder James Heng is paying $4,259 per square foot for the District 1 shophouse,which has an estimated built-up area of 3,874 sq ft.

According to property agents, the psf price is a new high for a District 1 shophouse.

The District 1 shophouse with attic occupies a land area of 1,759 sf and has a total area of approximately 3,874 sf. It has a tenure of 999-year leasehold w.e.f. 1 November 1884. Under the 2014 Master Plan, the site is zoned “Commercial” and is located within the Telok Ayer Conservation Area.

District 1 shophouse
Image credit: JLL

Located along the bustling Boon Tat Street, the trophy conservation shophouse accommodates the highly-acclaimed Michelin Star restaurant, Cheek by Jowl.

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The Property has rare permanent F&B approvals granted for both floors. The shophouse has excellent specifications including amongst other, generous ceiling height, a regular, efficient and column-free layout. Having full length windows spanning the front of the shophouse coupled with the presence of an airwell, the District 1 shophouse benefits from good natural lighting.

The CBD conservation shophouse is highly accessible and is within a short walk from Telok Ayer and Raffles Place MRT stations. Located within the CBD, the property is also easily accessible via major expressways including the Marina Coastal Expressway (MCE) and Central Expressway (CTE).

Characterised by a myriad of F&B offerings and a dynamic entertainment scene, the Telok Ayer Conservation Area (comprising of Amoy Street, Boon Tat Street, Telok Ayer Street and Stanley Street etc) is one of the most frequented locations in the CBD. With its excellent location and access to a large surrounding catchment of working population, the area bustles with activities round the clock. The area is now home to two Michelin Star restaurants, with Cheek by Jowl being one of them.

A bottom is in sight for industrial property market

Mr Clemence Lee, Associate Director, Capital Markets, JLL, said when marketing the property: “Freehold conservation shophouse located in the CBD are highly sought after for their investment value and wealth preservation purpose and seldom made available for sale. Moreover, shophouses with F&B approval on two floors are rare as the authorities are becoming increasingly selective in granting such approvals. 21 Boon Tat Street presents investors a rare opportunity to own a well-located trophy asset with strong tenant covenant, superior 999-year tenure, rare permanent F&B approval and strong rental income.

Astute investors would recognise the strong attributes of the property and seize the opportunity to add this trophy asset into their investment portfolio. We expect strong interest from investors such as boutique real estate fund, high-networth individuals, family offices and local companies.

Furthermore, with its prime location and rare permanent F&B approval for both floors, 21 Boon Tat Street will appeal to F&B operators looking to acquire their own flagship asset and stake a claim in this vibrant F&B and lifestyle destination.”

The latest transactions for shophouses in the Telok Ayer Conservation Area include 77 Amoy Street, which was reported transacted at $25 million ($3,500 psf approx.) in March 2018, and 75 Amoy Street, which was reported transacted at $18 million ($3,900 psf approx.) in February 2018.

The indicative guide price for the District 1 shophouse was set in the region of $17 million reflecting around $4,388 psf on GFA. It was closed at a slightly lower price.

Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the District 1 shophouse may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.

“To buy a commercial or Industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.

Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied though the payoff may be worthwhile for investors.”

Buying a commercial property versus residential property

How to Secure a Commercial Loan Quickly

Are planning to purchase a similar District 1 shophouse but unsure of funding? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.

Alternatively you can read more about the Best Commercial Loans in Singapore before deciding.  Our brokers have close links with the best lenders in town and can help you compare Singapore commercial loans and settle for a package that best suits your commercial purchase needs.

Whether you are looking for a new commercial loan or refinance, our brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.

For advice on a new commercial loan  or Personal Finance advice.

To speak to our Panel of Property agents.

For refinancing advice.Follow us on Social Media

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