Cushman & Wakefield today announced that it has been appointed as the marketing agent for the sale of a prime commercial development site located in the heart of Queenstown where the iconic Queenstown Cinema (formerly 250 Commonwealth Avenue) once stood.
Located merely 300 metres from Queenstown MRT Station, the iconic Queenstown Cinema site sits prominently at the corner of Commonwealth Avenue and Margaret drive and the vacant plot has a land area of 3,001.2 sq m (32,305 sq ft approximately). The Housing & Development Board has granted the iconic Queenstown Cinema site a 99-year lease, commencing from 1st January 1975.
The sale of the iconic Queenstown Cinema site is expected to fetch above $200 million, or about $2,063 per square foot of the approved GFA.
Written Permission (WP) has been granted for the iconic Queenstown Cinema site to be developed into a six-storey commercial building comprising shops, restaurants, community institutions & ciniplex with basement car parking lots. The approved Gross Floor Area is 9,003.6 sq m (approximately 96,914 sq ft) and Development Charge is not payable.
According to Mr Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, “The immediate neighbourhood of the subject site is undergoing massive rejuvenation with multiple new condominium developments such as Stirling Residences, Margaret Ville, Commonwealth Towers and Queens Peak, as well as new public housing projects including SkyOasis @ Dawson, Skyresidence @ Dawson, Skyville @ Dawson and Skypac @ Dawson, amongst others.”
The new commercial development at the site of the iconic Queenstown Cinema will serve more than 17,000 households from the new and existing residential developments within the vicinity, when completed.
“This is a rare opportunity to acquire a prime commercial development site right in the heart of Queenstown, a mature and highly popular residential precinct. In fact, it is the only commercial site available on the market within the locale,” said Mr Poh.
Adding: “Given the recent cooling measures in the residential segment and the excellent attributes of the subject site, we are confident that it will receive good interest from developers and investors both local and overseas.”
The tender for the iconic Queenstown Cinema site will close at 3.00 pm on 8 January 2019 (Tuesday).
With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Commercial properties such as the iconic Queenstown Cinema 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 discerning investors.
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