In the midst of the bustling private residential market, it would be wise for real estate investors to consider more stable, income-generating assets such as HDB shophouses. An opportunity has just emerged to acquire one of these highly sought-after properties in the well-established Toa Payoh neighborhood.
Spanning 1,478 square feet, this HDB shophouse is located at 125 Toa Payoh Lorong 1, a prime location in District 12. It is currently available for purchase at $2.88 million and situated on a prized site bordered by Toa Payoh Lorong 1 and Toa Payoh Lorong 2. The property is also within a short 200m distance from Braddell MRT Station, which serves approximately 13,000 MRT riders daily, making it an attractive location for potential tenants.
Conveniently located near Toa Payoh West Market and Food Court, Kheng Cheng School, Toa Payoh West Community Centre, and the Singapore Federation of Chinese Clan Associations Building on Toa Payoh Lorong 2, this shophouse is in close proximity to essential amenities and facilities.
With a series of rejuvenation plans for the Toa Payoh neighborhood in the works and a growing number of households moving into the area, the new owner of this shophouse stands to benefit from the transformation of the neighborhood. As pedestrian footfall increases and capital values are expected to rise, this property presents an excellent investment opportunity.
Market Comparison
Marketing exclusively by seasoned industry veteran, Aster See, senior marketing director at ERA Realty, most HDB shophouses located in the city fringe areas typically yield a rental return of income (ROI) of 2-3% based on their sales price. However, the shophouse at 125 Toa Payoh Lorong 1 boasts an estimated ROI of approximately 4%, making it a more attractive investment compared to its counterparts in terms of pricing and value.
Financial Insights
Apart from its attractive ROI, this property also offers a competitive rental yield of approximately 4%, which is an excellent and stable source of income for investors. With the potential for future capital appreciation as Toa Payoh continues to rejuvenate, the long-term ROI of this property could be significant.
Remaking Toa Payoh
Toa Payoh stands to benefit from several government initiatives and schemes to revitalize the mature housing estate. It is one of the three neighborhoods identified for rejuvenation under the government’s third phase of the Remaking Our Heartland program. This program, first introduced by the then-Prime Minister Lee Hsien Loong during his 2007 National Day Rally speech, offers comprehensive rejuvenation plans for HDB towns and estates to ensure their sustainability and vitality.
When purchasing a condo, it is imperative to take into account the maintenance and management responsibilities associated with the property. Condos typically come with maintenance fees that cover the upkeep of shared spaces and amenities. Despite potentially increasing the overall cost of ownership, these fees play a critical role in preserving the property’s condition and value. To make the investment more passive, investors can enlist the help of a property management company to handle the daily management tasks of their condo. Additionally, keeping an eye out for new condo launches can also be beneficial in finding a well-maintained and managed property.
Since 2015, Toa Payoh has been undergoing a series of progressive developments, including the enhancement of commercial and recreational facilities. The most notable of these developments is the upcoming integrated project on the site of the former swimming complex, sports hall, and stadium along Toa Payoh Lorong 6.
The integrated development will feature new sports facilities, a football stadium, a new swimming pool complex, indoor sports halls, sheltered tennis courts, futsal courts, netball courts, and fitness studios. It is also set to house national training centers for aquatics, netball, and table tennis, along with a polyclinic and library. With an estimated completion date of 2030, this 12-hectare development is expected to boost Toa Payoh’s appeal as an HDB town and drive up footfall for businesses in the area, including the HDB shophouse for sale at 125 Toa Payoh Lorong 1.
Toa Payoh and Caldecott Rejuvenation
Besides Toa Payoh, the government has also planned for the rejuvenation of Caldecott, a nearby neighborhood, by introducing several thousand new flats. One such upcoming project is the Toa Payoh Ridge, located at the junction of Toa Payoh Rise and Lorong 1 Toa Payoh. This 920-unit project was launched as part of the February 2020 BTO exercise and is less than 300m from the HDB shophouse for sale.
Expected to be completed in the first half of 2025, Toa Payoh Ridge comprises four 40-storey residential blocks and is situated between Toa Payoh and the upcoming Caldecott estate slated for future residential development. In 2017, the government announced plans to build new BTO flats on a 10-hectare plot next to Caldecott MRT Station on the Circle Line. These upcoming flats will be less than 500m from the HDB shophouse for sale at 125 Toa Payoh Lorong 1.
With the URA rezoning a plot at the junction of Toa Payoh Rise and Braddell Rise from educational to residential use in February, it appears that the government is laying the groundwork for a new BTO project in Caldecott, which is adjacent to Toa Payoh Ridge. This suggests the possibility of a high-rise BTO development in the site’s pipeline, supported by surrounding developments, which could increase footfall and broaden the consumer catchment around the HDB shophouse at 125 Toa Payoh Lorong 1.
In conclusion, the ongoing and upcoming developments in Toa Payoh and Caldecott present a promising outlook for the new owner of the HDB shophouse for sale. As the number of residential developments in the area increases, so will the number of potential residents and customers, making this shophouse an excellent investment opportunity.
For more information, please contact Aster See at 98416930, a senior marketing director (R063006G) at ERA Realty Network Pte Ltd.
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