JLL today launched the Expression of Interest exercise for 291 Serangoon Road, a freehold city-fringe commercial building located near to Farrer Park MRT station. JLL which is the exclusive marketing agent said that situated on a corner site, the prominent six-storey freehold city-fringe commercial building commands a 35-metre wide dual frontage onto Serangoon Road and Burmah Road.
The property occupies a land area of 5,455 sq ft and spans a total area of 19,913 sq ft. Based on the Master Plan 2014, the site is zoned “Commercial” with a gross plot ratio of 3.0. The building features a food & beverage (F&B) tenant on the ground floor, a night club on the second and third floor and offices on the upper floors. Subject to approval from relevant authorities, potential uses include retail, showroom, fitness centre, medical suites, entertainment and serviced apartments amongst others. There is a potential for the incoming buyer to have naming and signage rights for the property.
The freehold city-fringe commercial building occupies an excellent and highly accessible location with only 200 metres away from Farrer Park MRT Station.
The Central Business District (CBD) is also accessible within a short 10-minutes’ drive. Major expressways located in close proximity includes Pan Island Expressway (PIE), Central Expressway (CTE) and East Coast Parkway (ECP).
Built in the early 1800s, Serangoon Road was one of earliest roads built in Singapore. With its excellent city fringe location coupled with strong transport infrastructure, the area has evolved into a vibrant commercial and medical hub, well served by an abundance of trendy food & beverage and lifestyle offerings. The area is undergoing further rejuvenation with the development of several new developments including Centrium Square, a 19-storey commercial development comprising retail, medical suites and office space and Uptown @ Farrer, a mixed-use development by Low Kheng Huat, which will consist of retail, residential, and a 240-unit serviced residence operated by lyf Farrer Park Singapore.
Mr Clemence Lee, Associate Director, JLL says: “Centrally located freehold commercial buildings are hard to come by in Singapore. This is a rare opportunity for both investors and owner-occupiers to own a freehold flagship building with potential naming rights in a location which is undergoing rejuvenation and gentrification. Due to its palatable quantum, the property will appeal to a range of investors such as boutique real estate funds, family offices, local companies and owner-occupiers.”
The latest transaction in the vicinity is Wanderlust Hotel, which transacted at $37 million or approximately $2,466 psf on gross floor area (GFA) in April 2018. Located opposite 291 Serangoon Road, the entire two-storey commercial podium at Centrium Square transacted at $135 million or approximately $4,967 psf on strata area in July 2016.
The indicative guide price for the freehold city-fringe commercial building at 291 Serangoon Road is in the region of $52 million or $2,611 psf on Gross Floor Area (GFA).
As the freehold city-fringe commercial building sits on land zoned for commercial use, foreigners are eligible to purchase the building. There is also no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) imposed on the purchase of the property.
An earlier report by JLL said that the biggest gainers following the new property cooling measures will likely be owners of commercial buildings. Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the freehold city-fringe commercial building 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.”
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He added: “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.”
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