- The property sold for $37M
- 52 Boat Quay rises tall above its neighbours at six stories
- Shophouses are a very resilient segment of the market
A Singaporean shophouse that came to market late last year has now sold for almost double. Located at 52 Boat Quay, a stone’s throw Singaporean icons including Esplanade, Marina Bay Sands, and Clarke Quay the property was sold for S$37 million, making a S$16 million profit.
The shophouse stands above the rest at six stories, including circa 6,446 square feet of total built-up area on a 1,119 square feet site.
Undergoing refurbishment in 2015, the property includes a diverse mix of clients including Michelin-starred Italian restaurant, Braci, on the top two levels, an izakaya bar on the first level, and the second and fourth levels leased to corporates as office space.
It is also situated in a location that holds a special place in local lore; the “Belly of the Carp” is a winding part of the Singapore river and is known as such due to the curve resembling that of a fish, believed to be auspicious by the Chinese.
Shophouse appeal unabated
When the shophouse went to market in September last year, retail conditions were broadly on the down. The shophouse segment was strong at the time, with a then Savills report finding of S$375.2 million of retail transactions for the quarter, shophouses comprised S$237.2 million, a quarter on quarter (QoQ) rise of 9.2%.
Then, the property cooling measures such as Additional Buyer Stamp Duty or Seller’s Stamp Duty were not imposed on the shophouse segment.
The Property Tribune asked Yap Hui Yee, Savills Executive Director of Sales and Capital Markets and broker of the 52 Boat Quay sale, whether drivers of the segment have changed.
Yap noted the appeal of shophouses has remained:
“The key driver is shophouses’ intrinsic heritage value, scarcity, and ability to preserve value. Purchasers see shophouses as an opportunity to hedge against inflation and the volatility in the equity market and other asset classes. So, amid the limited supply and high liquidity environment, they will continue to be the preferred asset class for mid-to-long-term investments.
“Another key draw of shophouses is that they offer viable alternative to other commercial spaces, especially so for family offices. This is quickly becoming a fast-growing trend in Singapore’s shophouse market.”
Yap Hui Yee, Savills Executive Director of Sales and Capital Markets
“We have seen increasing interest from family offices looking to acquire shophouse for part own-occupation, part investment purposes. For example, some of these family offices are looking to operate a fine-dining restaurant / Omakase with their restaurant partners / chefs on the ground floor and occupy the upper floors space as their office premise.
“Some are also partnering with co-working or co-living operators by renting out their shophouses on a profit-sharing basis.”
Shophouses also seem to be the stalwart of Singapore property:
“From what we observed, the interest from local family offices and foreign investors are resilient since the border reopened, amid greater certainty and stability in the local property market as compared to overseas markets. Some overseas buyers who are based in Singapore remain active in the shophouse market, these include mainland Chinese, Hong Kong, South Korean and Indonesian investors.”
Savills’ Singapore Retail Briefing Q4 2022 noted a slow and steady recovery for the sector, with vacancy rates for Singaporean retail falling for the third consecutive quarter. It was also noted that: “… the declining vacancy rates may indicate that landlords are prioritising improving mall occupancy rather than having high rental expectations.”
Amidst other movements indicating recovery for the sector, The Property Tribune asked Yap whether the improved conditions would begin to favour malls, instead.
Yap said it was unlikely, “as shophouse stands out to be a better space for most retail/F&B tenants.” Among the benefits for shophouse tenants, Yap noted: flexible operating hours (malls close at 10pm), signage rights, prominent road frontages, some enjoy direct parking lots right in front of the shophouse, and more.
