Chinatown grows in commercial appeal

20130119-st-chinatown-grows-commercial-appeal-pic THERE is a buzz in Chinatown and not just because it is the festive season.

Property has become the new talk of the town in the past few months, particularly commercial real estate.

The heritage-filled district has just received a major boost with the opening on Wednesday of the 16-storey Parkroyal on Pickering hotel and launch of the revamped Chinatown Point mall.

The 367-room hotel, which was built for $350 million, is owned and managed by Pan Pacific Hotels Group, a unit of UOL, a firm controlled by billionaire banker Wee Cho Yaw.

Right next door is Chinatown Point, which officially opened its doors barely a week ago after a $90 million facelift to revitalise the complex's 20-year-old interior and facade.

It houses 170 shops, luxury watch retailer Cortina, and anchor tenants Daiso and FairPrice across five floors.

Chinatown Point is owned by a consortium which includes Perennial Real Estate Holdings, German fund manager SEB, NTUC FairPrice and Singapore Press Holdings.

But these two big openings are just the icing on the cake.

Interest in Chinatown's commercial segment has been growing, say property analysts, especially with the shift in investor focus towards non-residential property seen last year.

Knight Frank data shows that Outram's Chinatown segment registered a 74 per cent increase in the number of commercial transactions in 2012 compared with the previous year. These deals include sales of shophouses, strata offices and shops.

Ms Alice Tan, Knight Frank's senior manager for consultancy and research, noted that office sales in the heritage district were three times that of 2011 levels, driven largely by new sales in the mixed-use PS100 project in Peck Seah Street.

Ms Tan added that shophouse sales in Chinatown grew 45 per cent last year over 2011.

Mr Ong Kah Seng, director of R'ST Research, said the shophouses appeal both because of their proximity to the Central Business District and the Tanjong Pagar neighbourhood and their unique architectural features.

The outlook for Chinatown's commercial sector seems bright. Mr Ong anticipates that strong investor interest will carry over into the next few years, with the popularity of shophouses driving demand.

"Especially with the recent new measures to cool residential and industrial property investments, deeper-pocket investors are likely to focus on commercial property investments," he added.

"The low interest rates and ample liquidity also mean that the measures for residential and industrial properties are likely to stay for at least a couple of years."

Source: Straits Times, 19 Jan 2013