Serangoon’s Landmark Coffeeshop Snapped Up for a Whopping $40.5M, Shaping Future of Local F&B Scene
Following the sale of a Tampines coffeeshop for $41.6 million last year, and a Yishun coffeeshop fetching $40 million in the same period, a Serangoon coffeeshop has now entered the fray, being sold for an astonishing $40.5 million.
Not $40.5, not $400.50, but $40.5 million.
For your information, the record-breaking price for a 4-room HDB flat was $1.4 million, making this coffeeshop’s price nearly forty times more.
Can you believe that a coffeeshop could fetch such an exorbitant price?
The coffeeshop spans an area of 390 square metres (approximately 4198 square feet).
With this size, the average cost per square foot of the transaction skyrockets to a staggering $9647.
Walking on the floors of this coffeeshop will never feel the same again.
Lucrative Location
Located at Block 261 in the central passageway of Serangoon, this coffeeshop has been a local fixture for over 30 years.
It’s conveniently situated close to the Serangoon MRT station and NEX shopping centre, with additional amenities like clinics and gyms nearby.
In other words, the flow of customers is pretty muich guaranteed.
Industry insiders are of the opinion that the trend towards escalating resale prices for coffeeshops is set to continue.
But what does this mean for us, the regular customers?
I mean, at the end of the day just like the GST hikes, we might end up being the ones paying more by having to buy more expensive food from this coffeeshop.
But Nicholas Mak, head of ERA Property Research and Consulting Department and chief research officer at MOGUL.sg, shared with Shin Min Daily News that the high resale price doesn’t necessarily equate to higher food prices, because it needs to match the market price.
The previous owner of “Wanjin” is a director of the Fuzhou Coffee and Beverage Business Association.
Hong Baoxing, the association’s chairman, shared in an interview with Shin Min Daily News his belief that the sale price was mutually agreed upon by both parties.
He highlighted that the area’s robust business climate, diverse customer base, and the coffeeshop’s outdoor dining area are major attractions.
He noted that the previously sold “high-priced” coffeeshops also featured outdoor dining areas.
Buyer on A Buying Spree
Documents obtained by Shin Min Daily News from the Land Management Bureau reveal that the coffeeshop’s lease still has about 65 years remaining.
Which makes us wonder, who’s the new owner who wants to purchase the coffeeshop at a high price way before the lease ends?
The new owner is none other than AMK Food Court Pte Ltd, who lodged a real estate resale prohibition (caveat) this September.
Interestingly, the address of the buying company, and the directors of the company, are the same as that of Broadway Food Centre Holdings, although the transaction is reportedly still pending completion.
Founded in 1997, Broadway Food Centre (Holdings) Pte Ltd engages in the business of retailing prepared foods and beverages for consumption on the premises.
In 2018, Broadway acquired 23 stores from its competitor, S11 coffeehouse chain, for approximately S$200 million according to The Straits Times.
On top of that, soon the trend of high-priced coffeeshop resales will mirror that of public housing.
Buyers investing in coffeeshops at such hefty prices are unlikely to resell them soon, indicating their readiness for long-term business ventures in the area.
Analysis: Diverse Factors Elevate Coffeeshop Resale Prices
Nicholas Mak had also analysed the multitude of factors contributing to the high resale price of this particular coffeeshop.
Key factors include its prominent location beside a major road, which makes it a hotspot for foot traffic.
Alongside with its proximity – a mere 5-minute walk – to both the subway station and shopping centre, a coffeeshop at that location can actually earn a lot.
Additionally, with over 10 stalls and a scarcity of large coffeeshops in the vicinity, it stands out. No competitors (yet).
A unique feature of this coffeeshop is its rare KFC stall in the coffeeshop, which Mak believes attracts a significant student population from nearby schools in Bishan, Lorong Chuan, and Bartley.
In Singapore, where space is at a premium, location and size are crucial.
But for now, seems like both housing and coffeeshop costs are going higher and higher.
What do you think will be next?
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