Seven contiguous shophouses approved as serviced apartments up for sale

The seven contiguous shophouses are strategically located at the city fringe

EDMUND TIE announced on 18 Feb that it has been appointed as the sole marketing agent for the sale of 296 to 308 Lavender Street (even-numbered lots only). The seven contiguous shophouses are available for sale via an expression of interest exercise.

seven contiguous shophouses

(image: EDMUND TIE)

The freehold seven contiguous shophouses enjoy triple road frontage with prominent visibility along the main thoroughfare of Lavender Street. With a combined site area of 1,217.7 sq m (approximately 13,107 sq ft), the shophouses boast a total gross floor area of around 1,637.5 sq m (approximately 17,626 sq ft). All the ground floor units are approved for F&B use.

Under the URA Master Plan 2019, the seven contiguous shophouses are zoned “Residential with Commercial at 1st Storey” with a plot ratio of 3.0 and maximum allowable gross floor area of 3,653.1 sq m (approximately 39,322 sq ft).

An Outline Planning Permission has been granted by URA for a change of use to Serviced Apartment at plot ratio 3.0. As the shophouses are located within the Jalan Besar Secondary Settlement Conservation Area, rear extension of up to 6-storeys can be allowed.

Strategically located at the city fringe, the seven contiguous shophouses are located approximately 350 metres away from Bendemeer MRT station. It is also a short drive from the Central Business District (CBD) and Orchard Road. The property enjoys excellent connectivity to other parts of Singapore via Pan Island Expressway (PIE) and Central Expressway (CTE).

Some prominent landmarks in the precinct include CT Hub, Aperia Mall, Mustafa Centre and City Square Mall. The Lavender and Jalan Besar precincts have undergone exciting rejuvenation with the addition of new commercial developments such as ARC 380 and Centrium Square. The upcoming completion of nearby residential estates such as Kempas Residences and Towner Crest will also contribute to higher footfall and buzz in the area. In recent years, the area has become a hotspot for lifestyle amenities, hotels, hostels, eateries and cafes.

The region will also benefit from developments on-going at the nearby Kallang River, which is slated to become a lifestyle hub with a mix of offices, hotels, retail and entertainment facilities under the current Master Plan. Plans are underway to develop Kampong Bugis and transform the existing Kallang Industrial Estate into a vibrant mixed-use waterfront precinct. More sporting and community facilities will also be introduced to area.

EDMUND TIE’s Executive director of investment advisory, Mr Tan Chun Ming, commented: “It is increasingly rare to have a contiguous row of shophouses available for sale. 296 to 308 Lavender Street, originally part of a portfolio of nine assets to be liquidated, was sold via a tender process in 2010. The property marketed by the former DTZ, now known as EDMUND TIE, received overwhelming responses then.”

He added: “The site was originally affected by the tunnel reserves, limiting the potential development of the site. However, this restriction was removed over the years and since then, the current owner has received unsolicited offers on multiple occasions.”

“The incoming buyer can value add to the shophouses by carrying out Additional & Alteration works to maximize the gross floor area. Due to the vibrant locale, the property is well-suited for a variety of uses such as a boutique residential development, serviced apartment or co-living residence, subject to authorities’ approval,” he commented.

“An enquiry on development baseline record was submitted for one of the shophouses. Assuming the baseline is similar for all seven shophouses, development charge may not be payable to maximize the gross floor area.”

The guide price for the seven contiguous shophouses is $60 million, reflecting $1,526 per sq ft on the proposed total gross floor area of 39,322 sq ft.

The expression of interest exercise for seven contiguous shophouses at 296 to 308 Lavender Street will close on Wednesday, 24 March 2021 at 3pm.

Mr Paul Ho, chief mortgage officer at iCompareLoan said, “shophouses are perceived as attractive investments because they can hold their values because of their central locations and the freehold/999-year-leasehold of many of these properties. Shophouses are also valued because they give prominent presence to a business entity for them to be visible in a highly competitive environment.”

“The seven contiguous shophouses will be especially attractive to investors because of its location, as investment properties of such nature are scarce,” he added.


Commercial/shop spaces in Singapore usually comes with 30-, 60-, 99-, or 999-year lease. Some may be freehold. For 99-year and shorter leasehold units, buyers should be mindful that financing institutions may quote a lower loan quantum for units running low on their lease.


Borrowers for commercial properties are allowed to take a loan-to-value ratio (LTV) of up to 80%, even with outstanding residential mortgages. The maximum loan tenor typically stands at 30 years. However, loans for commercial property tend to command a higher interest rate relative to residential property loans. Like the latter, these loans come in

  • Fixed Rate Package
  • Variable (Floating) Rate Package

The requirements for a commercial loan, however, are more stringent. For example, the LTV ratio is contingent on whether the property is for owner-occupation or investment, with the latter subjected to stricter criteria by some banks. The next section explains the approval conditions in greater detail.

Credit worthiness and approval for commercial loans in Singapore

For purchases made under your name only your income, outstanding debts and credit history will be assessed. The maximum LTV ratio for a commercial mortgage is set at 80%, even with existing housing mortgages. But financing institutions will take a holistic approach in deciding whether to grant you a 80% loan.

For purchases made under a private limited or LLP company, the financiers will evaluate if the company has a cash flow record over the past few years that is sufficient to fund this investment. For instance, a company earning a monthly profit of S$15,000 deposits it into the company’s account in a timely manner, the lenders can, thus, lend up to 60 to 80% (typically) of this S$15,000. In other words, you can obtain a loan up to 60 to 80% of the debt servicing ratio (DSR). This is much higher than the DSR for residential property bought by an individual.

Conversely, buying under a private limited or LLP company without adequate cash flow or profit (or if the companies are special purpose vehicles), may result in the banks requiring that the directors guarantee any loans taken by the company under their individual capacity. The directors may also need to be Permanent Residents or Singaporeans. In many cases, these directors will need to furnish documentary proof that most of their incomes are derived from that company. If they earn their income from elsewhere, some banks will not grant the loan even with them as guarantors. While others may.

From time to time, credit officers of the financiers will impose new rules and conduct additional documentation checks. Often, credit officers may ask for more supporting documents if they want to do tighter cross checks.

The post Seven contiguous shophouses approved as serviced apartments up for sale appeared first on iCompareLoan Resources.

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