This is a review of a Race Course Area shophouse that is currently marketed by one of my colleagues. This is to provide potential buyers with a more in-depth view of the property and have all the details needed to make a well-informed decision. Should you require more information, feel free to write to estatemagnates@gmail.com or contact Joshua Loo at +6596329840! I will link you up to the seller agent!
Note from the writer: This review was initially a thorough and comprehensive look in regards to the property. However, we have encountered numerous unethical practices in regards to the properties that we are marketing. In order to protect the interest of the writer, real estate agents involved and seller, some identifying information was removed.
If you are an interested buyer for the property, please contact the proper channels as extensive time and effort were contributed for the marketing.
Introduction
My previous review of a shophouse located at Dublin Road, that is located close to Somerset was my first foray into explaining the architectural intricacies of a property.
With the growing demand of interest in my long-form reviews by clients and real estate agents, I feel that it is important that I expand deeper into these reviews from an architectural standpoint, yet not sacrifice on the foundations in which these reviews first started in; its value in real estate.
Real Estate as a term has been crudely recognized to be a form of financial investments, which brings to mind corporate overlords and overbearing landlords.
However, we will need to remind ourselves that every real estate is an occupier’s home, which fulfils physiological and psychological needs.
Talking about architecture on Estate Magnates which all this time is heavily focused on Real Estate investing, and still will be, brings these two halves into a greater whole.
Potential clients will then be closer to making a truly informed decision.
The format for this Race Course Area Shophouse review will first elaborate on its architectural/interior merits, followed by its potential as a real estate investment.
Façade of Race Course Area Shophouse
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The shophouses along the street have been earmarked for conservation as it is located within the Owen Road Conservation Area. Based on the “3 Rs principle: Maximum Retention, Sensitive Restoration and Careful Repair, it is crucial to protect the original structure and architectural elements of the shophouses.
The following points that are mentioned below are not exhaustive and the full restoration guidelines list for secondary settlements can be found here.
Roof
The roof must be pitched and unglazed, natural colour clay roof tiles are to be used.
Decorative Features
All the ornamental plasterwork and cut-porcelain tiles have been retained.
Canopy and Awnings
You might have noticed that most of the shophouses do have a modern, retractable awning. This is allowed to be installed with precision under the main beam of the building.
Rear Extension
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Despite being a conservation property, Additions & Alterations (A&A) for a rear extension can be done for up to 5 storeys can be done, which significantly increases the build-up area of the shophouse.
Architectural Style
Rather than opting for a traditional corporate office, SOHO (small office/home office) spaces provide a striking balance in affordability and function for small business operations. Since this is a Residential with Commercial at 1st Storey shophouse, I consider this to be an evolution of the smaller SOHO apartments designed and marketed by condominium developers.
The high floor-ceiling height of the shophouse provides an opportunity to create a functional SOHO (Small office/ home office) space and creative experimentation with mezzanine floors which the architect has executed flawlessly.
Creating a SOHO is more than just finding a property with high ceilings. SOHO Lofts are usually finished with an industrialized look. This is characteristic, based on the following points;
High ceilings supported by thick columns
Exposed brick walls
Large windows from the floor to ceiling
Wide, open plan; no internal walls
Heavy-duty wooden floors
Exposed piping and ventilator tubes
We don’t often get to see large glass windows for conservation shophouses as the external façade design are usually demountable timber shutter boards. Other than that, the interior work fulfils most of these points.
Also, the lighting and material type are very important. The apartment will require good amounts of natural lighting. For artificial lighting, the use of brushed metal lamps gives a strong industrial, perfect for that SOHO loft style.
Material use will require different forms that will portray a strong juxtaposition. This can be achieved simply mixing both hardwood and brushed metal items together.
1st Storey
The 1st storey of the shophouse is kept clutter-free. There is a large open plan with little interior walls so that the occupier is free to move to configure furniture placement freely.
Instead of hardwood floors, smooth concrete tiles are chosen due to their high durability, and the Persian rug helps to soften the overall look. A small pantry is located right at for the convenience of the occupiers, and the entire length is fitted with cabinetry to provide ample storage.
The metal shelving located to the left of the picture provides more storage solutions for the occupier and a movable ladder is useful for hard-to-reach shelves.
There is some semblance of the shophouse original heritage as the exposed wooden beams are still present.
An additional storage area is neatly tucked away in the corner of the shophouse. Space is fully utilised as it runs below the staircase landing which leads to the 2nd Storey of the shophouse.
2nd Storey with Mezzanine
The 2nd storey with Mezzanine is the quintessential look of an Industrial SOHO loft with a modern twist. Exposed brick walls with partial plaster cover provide an “unpolished” look, giving a grunge appearance without the actual mess.
Standout features that were present in the 1st storey also makes an appearance here, with smooth concrete tiles and metal shelving.
Plenty of natural lighting envelopes the entirety of the shophouse due to two strategically located air wells, an important element of a loft. With the addition of a portioned mezzanine level and attic space towards the back of the shophouse, the high ceiling is exposed which everyone loves!
Mental benefits are present too! High ceilings help to reduce mental claustrophobia, and places occupants in a mindset of creativity, freedom and abstraction, as mentioned by this article from the Journal of Environmental Psychology.
The brushed steel straight staircase provides a nice juxtaposition against the exposed brick walls and tiling work. There is a separate landing for every level which not only provides a clear distinction of floors but added practicality.
On the mezzanine level, there is hardwood flooring. In my opinion, this is a good alternative to the cement tiles present in other areas as this is a dedicated work area. Hardwood flooring will technically soften footsteps to a certain extent which will reduce sound distractions.
The use of fluorescent lighting provides copious artificial lighting. A cassette air conditioner unit supplies the entire space with cool air provides a comfortable environment for the occupiers.
Modern conveniences such as a small pantry and hot desks are available for occupiers to take a break away from their work desks.
Attic Space
Lastly, the attic space is a simple affair with hardwood plank flooring with grain matched cabinetry.
Having a panel glass wall instead of a traditional solid partition does wonders for the attic space as it visually widens the width of the area.
This makes for a fantastic area for work or to hand out with a couple of friends!
3rd and 4th Storey
I’m unable to take pictures as the 3rd and 4th storey is currently occupied by residential tenants who are not present during the photo-taking session. Sizes are approximate to a standard studio apartment.
Contact me now if you are interested to view the premises so that arrangements can be made.
Roof Terrace
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Rear Courtyard
The rear courtyard provides the occupiers with some fresh air, and occupiers can come here for a quick lunch break.
With the added rear extension, the occupiers of the shophouse will require more accessibility. A private lift has been added which travels the full height of the shophouse, and u-turn staircase with landings provides to move around the shophouse quickly.
The staircase landings are spacious enough for light furniture.
More Interesting Facts
The tiniest attention to detail had been observed for the interior work of this shophouse and is the current owner’s passion project. These minute changes increase the functionality of the shophouse for its occupants significantly.
Forming part of the attic, this separate space is fully utilised for recording artists! Also, the main attic space is decked with specialist recording equipment which will be useful for those that are in the music industry.
The soundboards as seen in the picture not only is visually compelling, it aids in the acoustics of the area by placing it in more delicate areas in the room.
Fire Rated Roller Shutters are installed at crucial areas in the shophouse for the safety of the occupants.
These whiteboard panes will glide seamlessly which is excellent for quick meetings and discussions. If you look carefully at the bottom of the picture, you will probably notice that there are some power sockets neatly hidden below these panes. This provides the occupants of this space simple reasons to move around and hot desk.
Can you spot the difference in the pictures? An additional quirk in this area is a monitor that can be easily stowed and deployed, which will be beneficial for short meetings.
This reinforced steel beam was a special addition by the current owner during the A&A works as it aids in reducing sound vibrations from cars moving along the road, travelling through the floor and affecting the occupiers.
This reduces distractions leading to a more focused and productive workforce.
Real Estate Matters
Huge Gross Floor Area (GFA)
Land Area: 162.5m2 or 1,749.28 sqft
Gross Floor Area: 444.22m2 or 4,781.93 sqft
It is rare for a conserved property to have such a huge GFA. Most conserved properties are severely limited in their GFA, which makes their capital appreciation solely on decreasing supply. The GFA count for this shophouse will enable it to generate good rental figures for the property.
As of recent years, there is a slight increase in the Plot Ratio to 3. This allows you for a further slight increase in GFA. This amounts to approximately an additional 500 sqft.
Based on this additional space, perhaps an additional studio apartment can be built in?
Price
*PM me for past sales transactions for similar shophouses!*
The price of this Race Course Area shophouse is at a negotiable $7.5 million.
Supply and transactions for these conservation shophouses in the market have been low, so do take into consideration that prices shown might not necessarily reflect true market value.
Location
Farrer Park MRT station is short 7 minutes’ walk away
Central Expressway (CTE) and Serangoon Road is a 5 minutes’ drive away.
Rental Yield
Residential Components
Taking into consideration of how much it will cost to create the space of these two separate studio apartments of approximate 550 sqft (I.e., the ones on the 3rd and 4th storey), I believe it costs the current owner a ballpark figure of around $220,000 for this space.
With an average rent of $2,250/month for 1 Bedroom/Studio apartments, the estimated rental yield for this new A&A addition will contribute to a staggering 24.5% rental yield based of the price of the initial investment!
Commercial Components
Median rental for commercial spaces around the area is $4.2 psf. The approximate total commercial floor area is around 3000 sqft, less the staircase and non-usable areas, this will be approximately $12,000/month.
Total Yield
This makes the total rent of the shophouse to be closer to $16,400/month. Based of the selling price of $7.5 million, Gross rental yield is 2.72%.
Disadvantages
Residential with Commercial At 1st Storey
Potential buyers will have to consider the ABSD on the residential components of the shophouse.
Asking Price
The unit demands for a high asking price; however, the investor should take into account that because of the increased floor area of the rear setback, there is good cashflow from rental collection.
In addition, A&A charges for conservation properties are usually higher than usual due to the nature of the project and this can account upwards to $500-$600k.
Conclusion
This shophouse has a good built-up area and is very well furnished. The current owner have made an amazing effort in finding the right Architect for the interior decoration, which I feel all buyers will be in awe of it.
The shophouse have an average performance in terms of rental, but conservation shophouses like these usually rely on its strengths of generating good capital yield in the long run.
As this is a residential shophouse with commercial at first storey, interested buyers will need to account for the ABSD costs involved.
Did you enjoy reading this review? Allow me to provide something similar to your property! I provide long-form articles as a form of extended listing for my sellers, and I find them to be effective in standing out in the property market.
If you are an interested buyer, feel free to contact me at +6596329840 or Joshua.loo@orangetee.com for more information.
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