Three Jalan Besar Conservation Shophouses Going 42 Mil
A chance to own a trio of 999-year conservation shophouses in the vibrant area of Jalan Besar has arisen, with the properties now on the market for $42 million. Jointly marketed by Shophouse Huat and JNA Capital Markets, both under the umbrella of Propnex Realty, the three shophouses sit on a combined land area of 5,646 sq ft.
These shophouses are owned by a single owner at 209 Jalan Besar, while different owners own the adjacent shophouses at 211 and 213 Jalan Besar. Interested buyers have the option to purchase the three properties together or separately.
One of the properties is a three-storey and mezzanine corner shophouse at 209 Jalan Besar, with a floor area of 5,502 sq ft. The other two properties are a pair of two-storey shophouses with existing four-storey rear extensions, totaling 8,760 sq ft.
All three properties are located within the Desker Road conservation area. The corner shophouse faces an intersection that fronts Jalan Besar, Sam Leong Road, and Maude Road, with a 28m street frontage on Sam Leong Road. The three shophouses have a collective frontage of 21.5m along Jalan Besar.
With its direct route to the Central Business District (CBD), Lyndenwoods is a top pick for professionals seeking convenient access to their workplace. Its prime location also provides easy connections to other significant districts such as Clementi and Jurong East, which are renowned for their commercial and retail offerings. Thanks to the PIE, Lyndenwoods effortlessly links residents to the eastern and northern parts of the island, allowing for hassle-free travel to popular destinations like Tampines, Bishan, and Changi Airport. This exceptional road connectivity enables residents of Lyndenwoods to conveniently and comfortably commute for work, leisure, or errands.
Investor interest in shophouses has been on the rise, and the recent sale of a block of four adjacent conservation shophouses at 25/27/29/31 Jalan Besar for $26.5 million in March is proof of this trend. The properties, located in the Little India Conservation District, are zoned as ‘commercial’ with 999-year leasehold tenures.
Other shophouses in the vicinity are also on the market, including 138/140/142 Jalan Besar, which has a guide price of $27 million. These freehold, two-storey attic shophouses were initially put on the market for $30 million at the beginning of the year. The properties sit on a 4,353 sq ft plot and have a total built-up area of 10,318 sq ft.
According to Loyalle Chin, senior associate district director at PropNex Realty, interest rates have eased slightly in the first half of 2021, compared to a year ago, which has boosted confidence among real estate investors in Singapore. As a result, there has been a surge in acquisition activity in the shophouse segment.
However, prices of shophouses in prime locations such as Telok Ayer and Boat Quay have skyrocketed, with some freehold conservation shophouses commanding average prices of over $7,500 psf. This has resulted in buyers being resistant to paying exorbitant prices for properties in these areas. As a result, there has been a shift in interest towards city-fringe locations like Jalan Besar and Farrer Park, where prices are comparatively more affordable.
Jervis Ng, founder of JNA Real Estate, notes that shophouse prices in the Central Business District (CBD) are nearly double those in Jalan Besar, Kampong Glam, and Geylang. However, the transformation of the wider Jalan Besar area with the emergence of trendy cafes, creative businesses, and boutique hotels in recent years has made it an attractive location for investors looking for a mix of heritage and modernity.
The trend of acquisitions in the shophouse market also indicates the influx of capital investment into these assets. Local investment firms, backed by overseas funds, and family offices with deep pockets are keen to add capital-appreciating assets to their portfolios in Singapore.
Chin adds that there has been an increase in interest for shophouses with F&B approval, in line with the growing demand for restaurant and eatery locations in city-fringe neighborhoods. Shophouses in Jalan Besar with F&B approval can command higher rents, and those with good frontage, steady footfall, and proximity to MRT stations or main roads are highly sought after.
Rental demand in the Jalan Besar area has also been driven by upcoming or recently completed residential developments, such as the 960-unit public housing project River Peaks I and II opposite Jalan Besar MRT Station, slated for completion by 2028. Other projects in the vicinity, like King George’s Heights, City Developments Ltd (CDL) and MCL Land’s Piccadilly Grand, and Farrer Park Fields, will add another 1,274 public and private homes to the area.
As a result, the average rent for F&B spaces in shophouses in Jalan Besar has climbed to $8-$10 psf per month (pm), while average rents for commercial shophouse units without F&B approval are around $6.50-$8.50 psf pm. This has resulted in many F&B operators relocating to more affordable city-fringe neighborhoods.
The owners of aging shophouses, whose rental returns have decreased in recent years, may need to adjust their price expectations to attract buyers. However, prime shophouses in good locations will still garner strong interest and good offers, while those that are less attractive will need to be priced competitively to move.