Rare freehold portfolio comprising 4 shophouse units at Macpherson Road for sale by expression of interest

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CBRE has launched for sale a rare freehold portfolio comprising of four freehold shophouses along Macpherson Road by Expression of Interest (EOI). The portfolio comprises 514 Macpherson Road, an intermediate two-storey shophouse; 526 and 528 Macpherson Road, 2 adjoining two-storey shophouses and 534 Macpherson Road, a corner two-storey shophouse (the Properties).

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The rare freehold portfolio is zoned “Residential with Commercial at 1st-storey” with a gross plot ratio of 3.0 and a building height up to four storeys.

rare freehold portfolio
Image credit: CBRE

With a total site area of approximately 6,089 sq ft (or individual land size of approximately 1,500 to 1,529 sq ft), the Properties can be redeveloped to a maximum allowable gross floor area (GFA) of approximately 18,267 sq ft (or individual unit with maximum allowable GFA of approximately 4,501 to 4,589 sq ft).

Located along Macpherson Road, the shophouses enjoy prominent main road frontage and are currently fully tenanted with immediate rental income stream. Three of the ground floor units are leased to F&B operators and the fourth unit is tenanted to a minimart. On-street car parking lots in front of the rare freehold portfolio and an open air public carpark in the vicinity provide ample car parking and convenient access for commercial use.

A short seven-minute walk from Tai Seng MRT station, the Properties enjoy seamless connectivity to the key precincts island-wide. In recent years, the Paya Lebar and Tai Seng areas have also undergone vivid transformation with the completion of several large-scale commercial, industrial and high-rise residential developments.

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Three HDB blocks at Macpherson Lane, which are located next to the Properties, have also been identified for the Selective En Bloc Redevelopment Scheme, and more development initiatives can be expected in the future. Bidadari Estate, a 93-hectare housing estate which is under development, is a five-minute drive away and will inject much vibrancy to the entire area. The government has also announced plans to relocate Paya Lebar Airbase in 2030 which will have implications on the redevelopment potential of the area.

Sammi Lim, Director, Capital Markets, CBRE said, “With excellent main road frontage, the units offer high visibility and existing F&B approvals which are quite rare in today’s market. We expect keen interest from developers, contractors, family offices and private equity funds who are actively seeking well located freehold shophouses to add to their land bank.”

He added: “These shophouses will also appeal to investors seeking income-producing properties for immediate rental income to capitalize on the strong rental upside. With added vibrancy from the upcoming Bidadari Estate and rejuvenation of the Macpherson Estate, potential buyers can expect to benefit from capital appreciation in the medium to long term.”

CBRE is the sole marketing agent for this EOI exercise and the rare freehold portfolio are offered for sale as a portfolio bundle or individual basis. The EOI exercise will close on 8 August 2018, Wednesday at 3pm.

The launch for sale of the rare freehold portfolio is announced just a few days after the Government announced new property cooling measures for private residential market.

The Government said the new property cooling measures were necessary to check sharp increase in prices, which could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply.

The government acted to cool the residential property market. Additional Buyer’s Stamp Duty (ABSD) rates have been raised for some categories of residential property purchases, and the Loan-to-Value (LTV) limits on residential property purchases have been lowered, all with effect from 6 July 2018. Strata-office and shophouse markets could emerge as the biggest gainers after the new property cooling measures.

Who are the big gainers and losers after the new property cooling measures announcement?

Overall private property prices rose across most market segments in the past few quarters, with the largest price surge seen in the Core Central Region (5.5%) and Outside of Central Region (5.6%).

As developers’ existing stock continues to diminish and supply of completed homes remain low, many projects especially those in the CCR have raised prices of their unsold units, some by even double-digits this year. Private residential market continued to gain traction with individual re-sellers have also seized the opportunity of increasing their asking prices in light of the more positive market sentiment fueled by the recent collective sales frenzy.

Investors may be curbed by the government’s swift response to cool home price growth and it may have tampered the prospects of residential properties as attractive investments. Investors looking for alternatives to park their money may therefore divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.

Some observers have suggested that there is a chance that the en bloc sales market will be dampened by the cooling measures. As developers become wary of end-demand and are hurt by the 5 per cent non-remittable Additional Buyers’ Stamp Duty (ABSD) on land purchase, it is expected to have an impact on their offer prices.

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