SINGAPORE – A coffee shop in Yishun has changed hands for $40 million, with a price per sq ft (psf) surpassing that of some ground level retail units in the prime Orchard Road shopping belt.
A firm called Y848 lodged a caveat with the Singapore Land Authority on May 10 for the 24-hour KPT Kopitiam located in Block 848 Yishun Street 81.
This is the second coffee shop to be sold around this price, after news earlier this week that a coffee shop in Tampines was bought over for a record $41.68 million.
However, the 397 sq m Yishun coffee shop, which has 14 stalls, is smaller than the 604 sq m Tampines coffee shop, which has 18 stalls. This means its psf price works out to be $9,361, compared to $6,411 for the Tampines coffee shop.
The Yishun coffee shop's psf price eclipses the average of $6,964 psf for ground level retail units in Far East Plaza and Lucky Plaza in Orchard Road sold this year, according to data from ERA Research and the Urban Redevelopment Authority (URA).
It has 78 years left on its lease, two years more than the Tampines coffee shop, which is located at Block 201 Tampines Street 21.
Local media outlet 8world reported that the transactions for both coffee shops have yet to be completed. A caveat lodged with URA secures a property for the buyer.
According to the Singapore Business Directory, Y848 is registered at Chang Cheng HQ in Woodlands. Chang Cheng Group owns more than 160 food outlets in Singapore, with brands such as the Chang Cheng Mee Wah coffee shop chain, Chang Cheng Chinese Vegetables Rice and Rong Kee Roasted Delights.
Mr Nicholas Mak, ERA Singapore's head of research and consultancy, told The Straits Times that he believes the two big-ticket sales come as a result of the broad easing of Covid-19 measures that investors wager will bring diners back to coffee shops in droves.
"The lifting of Covid-19 restrictions signals to the investors that things are going back to normal and the diners are coming back, so it gives them some confidence to enter the market," said Mr Mak.
"We could still see some more of such transactions this year, but rising interest rates might dampen such aggressive bids. As interest rates increase, the cost of financing these investments will increase."
Stallholders at KPT Kopitiam said on Friday (June 17) that they had been informed of the sale, and that the management would change in September.
A woman who works at the beverage stall and wished to be known only as Madam Mok, 50, said workers were unsure if rents would increase.
"We've been serving customers here for over ten years. We don't know what will take place when they pass over to the new management, but we will keep working until then and see what happens," she added.