A shophouse located at the 18th floor of Hongkong Street, located just off Boat Quay in District 1’s prime area is available for sale for the estimated price in the range of $10.1 million. The walk-up four-storey property has a GFA (GFA) that is 5,074 sq feet, which includes terraces on second fourth and third floors. This is why the asking price equates to $1,991 per sq ft in relation to the current GFA.
The Myst new launch has acquired by City Development Limited at 798 and 800 Upper Bukit Timah Road, Bukit Panjang. Acquired for S$126.3 million, the residential development is 16,630 sq ft and is in a prime location.
The property is located on an size of 1,884 square feet that is designated for commercial use and has an approved Gross plot ratio 4.2 in the current 2019 URA Master Plan. The property is subject to an 99-year leasehold tenure that began at the beginning of January 1st, 1951. This implies that there’s a total of around 27 years left in the lease. Krystal Khor director of Mondania and the person who markets the property and says that the proprietor (18) Hongkong Street had previously obtained permission to build four floors of the building to be utilized as an hostel for backpackers. In the past seven years the property was let to the owner in the form of City Backpackers @ Clarke Quay. However, the permission to plan is scheduled to expire in 2024. The property could be sold as vacant property should the buyer choose to, Khor adds.
Redevelopment potential
The property located at 18 Hongkong Street lies within the Upper Circular Conservation Area, that is bordered by Upper Circular Road, South Bridge Road, North Canal Road and New Bridge Road. The buildings in the area are generally three-to-five-storey shophouses built between 1930 and the latter half of the 1960s.
According to URA’s conservation guidelines the area is classified as one Singapore’s secondary settlements – post-World-War-1 urban settlements that aren’t part of the city’s central district. Additional secondary settlements include areas such as Balestier, Beach Road, Jalan Besar, Joo Chiat and Tiong Bahru.
In this classification under this classification, the property has greater flexibility in terms of the possibility of redevelopment, says Khor. The shophouses are not conserved, and belong to areas that are designated Historic Districts by URA that comprises places such as Boat Quay, Chinatown, Kampong Glam, and Little India -which are subject to more stringent conservation requirements the ones in secondary settlements are given a degree of flexibility, such as the possibility of adding an extension to the rear with the restriction of the maximum allowed height.
With the approved plot’s gross ratio 4.2 and its maximum allowed height of six storeys A renovation of the property by extending the rear could result in an expanded GFA of 7,912 square feet. According to Khor the owner has made an application to get permission to expand its GFA to 7,912 sq . ft by adding an extension of five stories that is accompanied with a terrace on the roof. “A fee of $250,000 to be paid for the increase in GFA was already paid through the owners,” the agent says. In addition, the owner is trying to get approval for F&B use on both floors as well as office space for the third through fifth floors.
Khor estimates that the construction costs for redeveloping and adding the extension could run about $4.5 million, subject to any changes to the regulations. She also estimates the land improvement charge that will apply to the redevelopment project, including the premium for differentials to build up the lease for a new 99-year lease, could be at $4.9 million subject to no modifications from the authorities in charge.
She estimates that the buyer would need to pay $19.475 million to acquire and develop the 18 Hongkong Street, which translates to $2,462 per square foot according to the possible GFA. This is not including the $250,000 already given from the vendor to URA.
‘Good value’
For Khor for Khor, the property is a great investment offering investors a great value and investors, considering cost of redevelopment and the associated fees. “At $2,462 per square foot that’s a lower entry price for psf when contrasted with similar leasehold properties in the most sought-after CBD areas that are currently trading at prices of more than $3000 per square foot,” she opines.
It also includes the purchase of a six-storey storehouse on five Hongkong Street for $49.8 million in 2011, she says. The property was leased with 99 years of lease that began on November 16 in 2011, was purchased at $49.8 million. The property was previously managed as Hotel Clover 5. Hongkong Street. Based on its built-up space of 14,384 square feet, that’s $3,471 per square foot. It is also the latest one to take place at Hongkong Street, based on the caveat search in SISVREALink that pulls information from the Singapore Land Authority’s transactions records.
Before that the sale, an apartment of five floors property located at 42 Hongkong Street was sold for $7.2 million in June 2021. The property was built in the surface area of 1,661 sq ft and a remaining lease of 26 years in the lease of 99 years at date of the transaction was sold at $7.2 million.
A new look for Hongkong Street
Over the past 10 years, Hongkong Street, a small, quiet alley used by merchants who would make a living in Boat Quay, has seen an ongoing shifts in its appearance -as a result of the development of the waterfronts that run along Singapore River into lifestyle destinations. Due to its proximity to popular tourist hotspots such Clarke Quay and Marina Bay and Marina Bay, the street has seen an increase in boutique and budget hotels. It has also become the home of luxurious F&B establishments, such as the famous Bar 28 HongKong Street and Spanish eatery FOC Restaurant, as well as fitness centers that specialize in. “With Clarke Quay MRT Station only a short distance from the area, it’s the perfect spot,” adds Mondania’s Khor.
She explains that, in recent years the shops on Hongkong Street have also started getting attention from office owners because of the location’s close proximity to the CBD as well as the nearby facilities. In the year 2018, WOHA Architects, which already occupies the 29th floor of Hongkong street, bought the adjacent shophouse for $9 million, to build its office. In the year before the shophouse with six floors at 39 Hongkong Street was sold for $17.2 million, which was then renovated into offices, which are now being leased by creative media and IT companies.
Presently, Hongkong Street continues to undergo a constant redevelopment. The northwest corner of the road, on New Bridge Road, a new hotel owned by property the group 8M Real Estate is in the process of being built. The company had bought five stories of freehold commercial buildings located at 23 New Bridge Road and four 99-year leasehold shophouses that adjoin it at 27-33 New Bridge Road for a total of $37 million in 2018.
Mondania’s Khor believes that 18 Hongkong Street will attract keen attention from a variety of buyers because of its position and wide possibility of redevelopment that spans F&B hotels, offices, and retail. Additionally, its commercial zoning permits foreigners as well as corporations to purchase properties without the additional buyer’s and seller’s tax. The property is also a factor for it: its address. “The number “18” is thought to be lucky and positive We expect that the number of the building will attract several purchasers,” Khor says.
