48 opportune commercial units going for less than a million that you have to know about! Part II
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Reuben
- October 28, 2019
- 16 min read
16 min read
In Part I we observed how the commercial investment sector has seen rapid growth this year – no doubt following the hamperance of residential-related en bloc sales post 2018 cooling measures.
We also briefly noted the ‘threat’ that GLS seemed to pose to successful en bloc-related activity.
Curious about this hindrance factor from a commercial property standpoint, we decided to look at successful commercial-related GLS during the same time frame.
The following list proves interesting:
| Date Of Sale | Name of Development | Current Development | Proposed Development | Size (Total sq ft) | Price Sold |
| January 2019 | Club Street (D2) | Hotel | Hotel | 55,126 sqft | $562.2 million |
| April 2019 | Middle Road (D7) | Residential (1st Storey commercial use) | Residential (1st Storey commercial use) | 80,326 sqft | $492 million |
| September 2019 | One-North Gateway (D5) | Residential (1st Storey commercial use) | Residential (1st Storey commercial use) | 62,201 sqft | $155.7 million |
| September 2019 | Bernam Road (D2) | Residential (1st Storey commercial use) | Residential (1st Storey commercial use) | 41,400 sqft | $440.9 million |
| September 2019 | Tan Quee Lan Street (D7) | Residential (1st Storey commercial use) | Residential (1st Storey commercial use) | 124,116 sqft | $800.2 million |
Notice how the 5 commercial-related GLS here matches up to the 5 commercial-related en bloc sales since the cooling measures last year?
What’s more, there were no ‘pure commercial’ land sold in this GLS list – save for the Club Street sale (assuming we include hotel-use as ‘commercial property’).
On the contrary, 2 commercial developments were procured in the recent round of en bloc sales (note: the residential development site housing Min Yuan Apartments is to also be developed into a hotel-site) – thus hushing the myth that this current string of commercial-related GLS (post cooling measures) posed any ‘threat’ to the success of its commercial en-bloc counterpart.
Factor in the earlier mentioned 2nd Half GLS release, and you realise that there are 0 commercial developments in the confirmed list.
Yes, the reserve list might harbour an approximate 990,000 square feet of commercial space (which is honestly quite the figure), but as we know, successful purchases through the GLS reserve list might not be the fastest method even when compared to the en bloc process.
Still, this is not to say that things will remain the same come next year’s 1st half GLS release – hence all the more reason to invest wisely.
Perhaps the nicest sounding ring to all of this is the healthy demand for commercial property that we have seen in the past year and can further expect from 2019.
All this is very nice… but what commercial sectors should we be focusing on?
Simply put, the definition of commercial property refers to real estate property that is used for business activities.
Truthfully, commercial real-estate property in Singapore covers a broad spectrum of sectors with typical leaseholds of 30, 60, 99 and 999-years.
So before we go any further, let us briefly define these sectors. They include:
Retail spaces (includes conservation shophouses), Office spaces, Strata title Spaces (different unit ownership eg. People’s Park Complex/Golden Mile), Medical Suites, Hotels (and hostels), Industrial Property (Warehouse & Factories), and Mixed Developments (eg. HDB Shophouses/Residentials with 1st storey Commercial Use).
Oh, and car parks too – but they really shouldn’t be tickling your fancy unless you’re intent on staging a parody of Justin Lin’s 2006 Tokyo Drift (in which case you have our utmost admiration… and concern).
The main sectors
Jokes aside, it is quite a lengthy list.
Luckily for you (and me), we are dealing with potential commercial en bloc units going for below a million in asking price (hence the omission of hotel developments for now).
So which sectors to focus on?
Well, if you were to observe the makeup of units in the recent commercial-related property en bloc sales, this is what you’d see:
| Development Name | Unit Makeup | Completed | Tenure | Failed Attempts |
| Selegie Centre | 33 retail units | 1985 | Freehold | 2 |
| Realty Centre | 3 retail & 33 office units | 1974 | Freehold | 0 |
| Golden Wall Centre | 3 retail & 19 office floors (174 units) | Unknown | Freehold | 1 |
| Century Warehouse | 35 strata units (Related to B1 – Light Industrial) | Unknown | Freehold | 0 |
Notice the majority of retail and office units?
Beginning with the retail sector, negligible declining rental vacancies have prompted experts’ advice for investors to focus on ‘malls with high population catchment and asset enhancement potential’.
What’s more, for those worried about competition from the e-commerce sector, it has since been proven that you need not fear an immediate downward spiral of retail sales and hence reduced demand for retail spaces to boot.
Regarding office space demands, you’ll find that there were no GLS options for CBD office sites from mid 2017 to end 2018 despite a 6% rise in tenancy in the 1st half of 2018 as opposed to the 1% rise for the entire year of 2016.
This prompted JLL to predict a low supply of Grade A offices (and hence higher rent) until as late as 2023 or 2024 – which constitutes enough time for commercial en bloc purchases and post office space-related redevelopment.
Furthermore, considering Singapore’s status as the region’s key business hub, it is rather surprising that rental prices here are considered one of the lowest amongst its competitors – 2.9 times less than Hong Kong in Grade A office rentals for example.
Not only is this a favourable factor for numerous companies, it ultimately results in higher office space demand.
With the final backing of a commercial-related transactions study (paragraph 11) done earlier this year, it is without a shadow of a doubt that (strata) retail and office space should be the main sectors for us to base our potential en bloc list off.
The side-sectors
Despite all this, it isn’t to say that the other sectors will not see any en-bloc related activity at all.
Here are some brief points to back up this statement before we finally get into that long-awaited potential en bloc list.
Firstly, with the increase of Singapore’s ‘ageing population, rising affluence, increasing prevalence of chronic diseases and rising health awareness’, moderate interest in medical suites might surface even if massive immediate demand is not likely.
Secondly, given the favourable 14 consecutive declines in industrial rents and prices before the 4th quarter of 2018 coupled with the increasing lack of office-spaces, companies might be looking to shift their work-spaces into industrial developments (something like the former Century Warehouse) – though be warned that this trend might or might not last for much longer.
Thirdly and finally, we covered the incredible outlook for the hotel development sector in Part I. If you have the means to invest in that industry during this current market upturn, it could bode very well for you financially to delve into that aspect of commercial real estate following some solid research.
Thus, you can see that despite the rosier outlook for office and retail-space related commercial investment, any game in the commercial sector is fair game at this point barring a sudden economic crisis (touch wood!).
Our list of potential commercial en bloc developments… finally!
So after all the painstaking analytics, are there really any ‘affordable’ potential en bloc commercial units we should be looking at?
The simple answer is ‘yes’. Although the follow-up to that would be ‘but not many’.
Keeping in mind that a favourable price (we’re looking at less than a million per unit) and location (District 7 seemed pretty hot thus far) are important factors for successful commercial en bloc sales.
And that older (at least 25 years) retail/office units are the focus alongside unit transaction recency (we are again looking to include developments with recent transactions last dating April 2018), let’s dive right in!
#1 – Orchard Towers
Orchard Towers is located in D9, was built in 1975 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 15 sqm sold for $805,000 on 3 October 2019.
#2 – Far East Plaza Residences
Far East Plaza Residences is located in D9, was built in 1982 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 29 sqm sold for $930,000 on 5 July 2019.
#3 – International Plaza
International Plaza is located in D2, was built in 1976 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 43 sqm sold for $980,000 on 6 June 2019.
#4 – Peace Centre/Mansion
Peace Mansion is located in D9, was built in 1976 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 43 sqm sold for $512,000 on 1 October 2019.
#5 – Beauty World Centre
Beauty World Centre is located in D21, was built in 1984 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 15 sqm sold for $440,000 on 12 September 2019.
#6 – People’s Park Complex
People’s Park Complex is located in D1, was built in 1973 and has a 99-year leasehold.
Latest unit sale just bordering a million: Strata Retail Unit – 29 sqm sold for $1,080,000 on March 2018.
(This development is one of 3 listed properties that have been exempted from the ‘recent unit transaction’/’below 1 million’ criteria given its high en bloc potential – note that prices might be different now.)
#7 – The Odeon Katong
The Odeon Katong is located in D15, was built in 1983 and is a freehold development.
Latest unit sale: Strata Retail Unit – 31 sqm sold for $1,200,000 on 7 May 2019.
(This development is one of 2 listed properties that have been exempted from the ‘below 1 million’ criteria given its high en bloc potential – note that prices might be different now.)
#8 – The Plaza
The Plaza is located in D7, was built in 1995 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 37 sqm sold for $630,000 on 21 August 2019.
#9 – Queensway Shopping Centre
Queensway Shopping Centre is located in D3, was built in 1975 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 16 sqm sold for $680,000 on 14 October 2019.
#10 – Textile Centre
Textile Centre is located in D7, was built in 1997 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 82 sqm sold for $848,000 on 4 March 2019.
#11 – City Plaza
City Plaza is located in D14, was built in 1972 and is a freehold development.
Latest unit sale below a million: Strata Office Unit – 17 sqm sold for $680,000 on 30 October 2018.
#12 – Highland Centre
Highland Centre is located in D19, was built in 1995 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 43 sqm sold for $615,000 on 18 June 2018.
#13 – Bukit Timah Plaza
Bukit Timah Plaza is located in D21, was built in 1981 and has a 999-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 20 sqm sold for $515,000 on 10 October 2019.
#14 – Sim Lim Tower
Sim Lim Tower is located in D8, was built in 1980 and is a freehold development.
Latest unit sale below a million: Strata Office Unit – 47 sqm sold for $988,000 on 2 July 2019.
#15 – Sim Lim Square
Sim Lim Square is located in D7, was built in 1987 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 38 sqm sold for $970,000 on 21 May 2019.
#16 – Golden Mile Complex
Golden Mile Complex is located in D7, was built in 1973 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 86 sqm sold for $838,000 on 9 October 2019.
#17 – Concorde Shopping Centre
Concorde Shopping Centre is located in D3, was built in 1987 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 30 sqm sold for $480,500 on 1 October 2019.
#18 – Parklane Shopping Mall
Parklane Shopping Mall is located in D7, was built in 1974 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 42 sqm sold for $700,000 on 30 September 2019.
#19 – Cuppage Plaza
Cuppage Plaza is located in D9, was built in 1983 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 38 sqm sold for $745,000 on 23 August 2018.
#20 – Peninsula Plaza
Peninsula Plaza is located in D6, was built in 1980 and has a 999-year leasehold.
Latest unit sale below a million: Strata Office Unit – 41 sqm sold for $950,000 on 20 September 2019.
#21 – High Street Centre
High street centre is located in D6, was built in 1969 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 45 sqm sold for $726,000 on 4 July 2019.
#22 – High Street Plaza
High street centre is located in D6 and has a 999-year leasehold from 1827.
Latest unit sale below a million: Strata Office Unit – 13 sqm sold for $400,000 on 20 September 2019.
#23 – Shenton House
Shenton House is located in D1, was built in 1969 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 41 sqm sold for $805,000 on 20 September 2019.
#24 – People’s Park Centre
People’s Park Centre is located in D1, was built in 1974 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 36 sqm sold for $850,000 on 13 December 2019.
#25 – Bylands Building
Bylands Building is located in D7 and has a 99-year leasehold from 1978.
Latest unit sale below a million: Strata Office Unit – 19 sqm sold for $400,000 on 10 September 2019.
#26 – Goldhill Shopping Centre
Goldhill Shopping Centre is located in D11, was built in 1969 and has a 999-year leasehold.
Latest unit sale: Strata Office Unit – 112 sqm sold for $1,150,000 on 29 August 2019.
(This development is one of 3 listed properties that have been exempted from the ‘below 1 million’ criteria given its high en bloc potential – note that prices might be different now.)
#27 – Sultan Plaza
Sultan plaza is located in D7, was built in 1978 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 64 sqm sold for $923,224 on 21 August 2019.
#28 – Orchard Plaza
Orchard Plaza is located in D9, was built in 1983 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 20 sqm sold for $450,000 on 14 August 2019.
#29 – Fortune Centre
Fortune Centre is located in D7, was built in 1983 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 38 sqm sold for $748,000 on 21 May 2019.
#30 – Holland Road Shopping Centre
Holland Road Shopping Centre is located in D10, was built in 1972 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 18 sqm sold for $850,000 on 1 August 2019.
#31 – Tanglin Shopping Centre
Tanglin Shopping Centre is located in D10, was built in 1970 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 36 sqm sold for $900,000 on 26 July 2019.
#32 – Peninsula Shopping Complex/Centre
Peninsula Shopping Complex/centre is located in D6, was built in 1974 and has a 999-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 38 sqm sold for $992,000 on 18 June 2019.
#33 – Coronation Shopping Plaza
Coronation Shopping Plaza is located in D10, was built in 1979 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 25 sqm sold for $920,000 on 28 June 2019.
#34 – Fook Hai Building
Fook Hai Building is located in D1, was built in 1976 and is a 99-year leasehold (from 1972) development.
Latest unit sale below a million: Strata Office Unit – 41 sqm sold for $680,000 on 13 June 2019.
#35 – Katong Shopping Centre
Katong Shopping Centre is located in D1, was built in 1973 and is a freehold development.
Latest unit sale below a million: Strata Office Unit – 41 sqm sold for $680,000 on 3 June 2019.
#36 – Upper Serangoon Shopping Centre
Upper Serangoon Shopping Centre is located in D19, was built in 1981 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 18 sqm sold for $400,000 on 29 March 2019.
#37 – The Golden Landmark
The Golden Landmark is located in D7 and has a 99-year leasehold from 1981.
Latest unit sale below a million: Strata Retail Unit – 26 sqm sold for $480,000 on 12 March 2019.
#38 – Manhattan House
Manhattan House is located in D3, was built in 1974 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 57 sqm sold for $780,000 on 27 February 2019.
#39 – Tong Eng Building
Tong Eng Building is located in D1, was built in 1980 and has a 999-year leasehold.
Latest unit sale: Strata Office Unit – 43 sqm sold for $1,155,000 on 15 January 2019.
#40 – North Bridge Centre
North Bridge Centre is located in D3, was built in 1987 and has a 999-year leasehold.
Latest unit sale below a million: Strata Office Unit – 38 sqm sold for $869,188 on 30 April 2018.
#41 – Golden Mile Tower
Golden Mile Tower is located in D7, was built in 1974 and has a 99-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 20 sqm sold for $370,000 on 21 December 2018.
#42 – Bugis Cube
Bugis Cube is located in D7 and has a 999-year leasehold from 1827. (Find out which year built).
Latest unit sale below a million: Strata Retail Unit – 12 sqm sold for $633,000 on 17 December 2018.
Has been put up for a 2nd collective sale attempt (closes 14 November 2019).
#43 – Katong Plaza
Katong Plaza is located in D15, was built in 1983 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 23 sqm sold for $700,000 on 7 November 2018.
Has been approved for hotel use “which can be turned into an 18-storey hotel with 345 rooms and 10,125 sq ft of commercial space”.
Has also been put up for a 3rd collective sale attempt (closes 19 December 2019).
#44 – Roxy Square
Roxy Square is located in D15, was built in 1995 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 27 sqm sold for $739,000 on 4 September 2018.
#45 – Maxwell House
Maxwell House is located in D1, was built in 1971 and has a 99-year leasehold.
Latest unit sale below a million: Strata Office Unit – 36 sqm sold for $615,000 on 4 July 2018.
#46 – Beauty World Plaza
Beauty World Plaza is located in 21, was built in 1982 and has a 999-year leasehold.
Latest unit sale below a million: Strata Retail Unit – 14 sqm sold for $460,000 on February 2018.
(This development is one of 3 listed properties that have been exempted from the ‘recent unit transaction’ criteria given its high en bloc potential – note that prices might be different now.)
#47 – Balestier Plaza
Balestier Plaza is located in D12, was built in 1985 and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 37 sqm sold for $758,000 on February 2018.
(This development is one of 3 listed properties that have been exempted from the ‘recent unit transaction’ criteria given its high en bloc potential – note that prices might be different now.)
#48 – Ming Arcade
And our final development on this list – Ming Arcade is located in D10, was built in the 1980s and is a freehold development.
Latest unit sale below a million: Strata Retail Unit – 17 sqm sold for $510,000 on 6 June 2018.
And so that concludes the list! If there are any other commercial/mixed-commercial developments you’d like to see on this list, do feel free to drop us a comment below!
Final word (& Disclaimer!)
While this is a list of potential commercial en bloc sale options that seem to fit the bill based on our stringent criteria and en bloc analysis from 2016 to 2019, we all know that the property market is a very volatile entity where people have made and lost millions of dollars.
Furthermore, we are not advocating commercial en blocs as the next Singapore gold-rush – especially when you factor in ongoing global trade tensions. More than anything, we strongly encourage our readers and investors to perform meticulous research on respective individual properties before making any important investment decisions.
One final thing to add is that you cannot pay for a commercial property using your CPF, very much unlike purchasing a residential property under the private properties scheme. Also, while there aren’t any ABSD or SSD charges for commercial properties, you will have to fork out an alternate 7% Goods & Services Tax (GST) and Total Debt Servicing Ratio (TDSR) . Once again, this isn’t payable through your CPF unlike the ABSD, but is remittable if the commercial property is purchased through an established company.
Should you wish to learn more about this or have any further enquiries (eg. more information on potential en bloc properties unit mix etc.) or article/information requests, do feel free to leave us a comment below or shoot us an email at hello@stackedhomes.com.
Best of luck, and till next time!
*This article was formulated based on a request made by one of our readers earlier this month. If you’ve missed it here’s part 1!*
Is fook hai freehold or 99?
Hi Chew, Fook Hai is 99 years from 18/01/1972
biggest worry with commercial en bloc unit is whether it can be rented out while waiting. a lot of those on the list are strata titled, old malls with a lack of strategy. a lot of talk about en bloc, but very hard to find a buyer these days also . sim lim square themselves couldn’t go through twice. unlike residential en bloc which is a lot more straight forward. people always need a place to stay so it’s easier to rent. commercial on the other hand is another story.
Any explanation why are commercial properties subject to the same 80% support before an en bloc sales can proceed for buildings that older than 10 years since the intention of the law was not to cause hardship to folks that have strong sentimental attachment to the homes they live in?
Hey! A collective sale’s outcome is very impactful considering how it forces every owner, even those unwilling to sell, to accept the outcome. If an owner truly wants to sell, nothing is stopping them – a collective sale isn’t necessary. So for a decision to be made that leads to such a impactful outcome, a high threshold is required. Commercial units can also be sentimental for certain owners. For example, they might have regular customers visiting their shop there often due to their locale. They might have been operating at the same place for decades. Another example – new owners may have also done renovations and invested their time and money into the unit. Having a low threshold for a collective sale can easily derail these plans, creating more uncertainty for business owners who rely on the property to do business. As such, we think this is why the 80% threshold doesn’t just apply to residential market.
What is the en bloc projected payout for The Plaza?