Singapore’s property market may fluctuate somewhat, but they generally tend to trend upwards more often than not.
While we’re used to hearing reports of sky-high prices for residences and office units, kopitiams have recently been going for eye-watering sums too.
One of them is a kopitiam in Yishun, which has reportedly been sold for S$40 million.
Source: Google Maps
As expected, the buyer has indicated that the stallholders’ rental will be increased.
The kopitiam is question is located in Block 848, Yishun Street 81, reported Lianhe Zaobao.
Source: Lianhe Zaobao
As it has 4,273 square feet (sq ft) of space — the price works out to a staggering S$9,361 per sq ft (psf).
The premises has 14 stalls and 78 years left on its lease, reported 8World News.
The transaction was discovered from a caveat filed with the authorities in May.
On the surface, the S$40 million Yishun kopitiam may seem like a relative bargain compared with the Tampines kopitiam that sold for a record S$41.6 million.
However, the Tampines kopitiam went for a psf price of just S$6,964 — about three-quarters of the Yishun kopitiam’s.
This was due to the Tampines kopitiam having a larger floor space of 6,501 sq ft.
It also has 18 stalls, meaning more potential rental income.
Coffee shop industry insiders said the Yishun kopitiam’s psf price is believed to be a new high in recent years.
Mr Mak Junrong, director of the property research and consulting department of Singapore real estate firm ERA, said it was comparable to that of a retail unit on the first floor of a strata-titled mall on Orchard Road.
Source: Google Maps
The psf price of such a store would be between S$4,000 to S$12,000, he told Zaobao.
However, its size would be no bigger than that of an Yishun kopitiam, he added.
There seems to be a trend of buying coffee shops at high prices now, Mr Mak noted.
He conjectured that it’s because Singaporeans have learnt to co-exist with Covid-19 and adjust their lives back to how they were pre-pandemic, adding,
As investors see this and business slowly picking up, they’ll feel more confident that now is a good time to buy.
True enough, the buyer of the Yishun kopitiam told Shin Min Daily News that he’d decided to buy now as he felt the pandemic had stabilised.
What drew him to the coffee shop was its convenient and central location.
The block lies smack in the middle of a neighbourhood with high flat density that’s close to Khatib MRT station.
Source: SRX
The kopitiam also operates 24 hours, which means a there’ll be customers at all hours of the day.He said that the price was the highest he’s paid for any transaction.
However, he wants to remain anonymous as the deal hasn’t been completed yet.
The paper identified him only as someone who’s been in the F&B industry for many years.
The new owner also seemed definite that the stallholders’ rentals will increase.
He told 8World News that a rental adjustment would be “difficult to avoid”.
However, he would estimate the final amount taking into account the rentals of nearby coffee shops.
Individual stallholders would also be contacted to negotiate the new rental, he told Zaobao.
Source: Google Maps
Mr Han, a rojak stallholder at the kopitiam, told the paper said the crowd there has always been good.
However, he would have to see how much the rental increase would be before he can decide whether to remain there.
ERA’s Mr Mak advised buyers of coffee shops to strike a balance between raising rents and a possible drop in sales.
He cautioned that if the rental is increased too much, the popular stalls may leave, affecting business.
Considering the high price paid for the kopitiam, it’s inevitable that stall rentals will rise.
Hopefully, the hike will be reasonable enough for the stallholders to feel that they can still survive.
Otherwise, everyone will be on the losing end, including the residents, if a once-popular food spot turns silent.
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Featured image adapted from Lianhe Zaobao and Google Maps.
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