It’s one thing to know that property prices in Singapore are notoriously expensive, it’s quite another to see and know the price that a certain property fetched for.
A coffee shop located in Block 201 Tampines Street 21 has recently exchanged hands for the price of S$41,682,168.
Readers: I never knew a coffeeshop could be that expensive.
Yeah, me neither.
Details of the Transaction
According to 8world News, a caveat was lodged in April, with expectations that the transaction will be completed in July.
In property law, a “caveat” literally means “beware”, and its purpose is to protect the property buyer by telling other prospective buyers that you have priority in the dealings with a particular building.
For Singapore, a caveat can be secured through the Urban Redevelopment Authority (URA).
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But you’re probably asking, what’s so special about this place to warrant such a high price?
Well, the coffee shop is 604 square metres in size, holds 18 stalls, and is the largest coffee shop along Tampines Street 21.
It’s a stone’s throw away from the Tampines 1 Mall and Tampines East Community Club, plus it’s just a short distance from the Tampines East MRT Station. All in all, it’s a prime location with the amount of foot traffic it receives from residents and workers alike.
The price per square foot (psf) is around $6,964, which is comparable to the prices for retail spaces in Far East Plaza and Lucky Plaza, according to the data collated by URA and real estate firm ERA.
As for the transacting of individual stalls, data from the first half of 2022 show that it can be sold anywhere from S$4,000 to S$8,000 psf.
Given that the Tampines St 21 coffee shop was sold at S$41.68 million, it breaks the previous record, where a coffee shop at Block 155 Bukit Batok Street 11 was sold for S$31 million in 2015.
Stallholders Pulling Out due to Increased Rent
As one might expect, any property owner who had spent that amount of money would try to break even their losses as soon as possible.
Ah, capitalism at its finest.
For the current stall owners though, it means that there’s a significant increase in rent.
The hawkers who allowed themselves to be interviewed have chosen to seek anonymity (for fairly obvious reasons), but their opinions are pretty similar.
One hawker shared that their previous landlord has never resorted to increasing their rental prices in a significant manner over the 23 years that she’s been operating there.
However, after the coffeeshop changed hands two months ago, the new landlord increased her rental prices from S$6,000 to S$10,000.
The rent excludes other charges and miscellaneous fees.
It was only after “extensive negotiations” that she managed to cut down the rental price to S$9,000, but even then, the increased price is hard to bear.
However reluctant, she has to consider giving up her business in the next six month if it becomes too challenging to continue operating without making losses.
Another stallholder bluntly told 8world reporters that many have decided to cancel their leases because of the huge increase in rent.
A $4,000 increase is no joke; hawker stalls are famously known for selling their food at cheaper and affordable prices, and profiting more through quantity instead of quality.
It would be extremely difficult to meet the new rental prices even if they were increase their food prices, because that would also drive away some of their frequent patrons.
In the hawkers’ minds, it was probably better to cut their losses while they could.
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Featured Image: 8world News
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