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05-05-2014, 04:55 PM
(This post was last modified: 05-05-2014, 04:56 PM by Big Toe.)
Onto the assignment of HDB shops. It does help in reining in the runaway speculative assignment prices but it does nothing to help a small business owner to start up/run a shop. Without the avenue of a greater pool of shops to assign, the new start up have 2 options to have the lowest cost retail space.
1. Bid for it(Think COE)
2. Rent from existing tenants. (plenty of sub tenant conditions apply)
With a smaller pool of available supply and plenty of demand, how can rental be affordable?
The whole system of property in Singapore is based on a market based/bidding system, there are some tweaks
in the HDB residential market where it is no longer pegged to market prices, but that's it. It is very much like the COE system.
Food prices are affordable in a number of hawker centres in Singapore(and can be tasty too), some areas do cost a fair bit more.
On one hand there are needy families that require assistance in food/healthcare/education. On the other hand, I witness with my own eyes some 'needy families' giving/throwing away cooked food that are donated to them as it did not taste good enough. And the volunteers thought they had helped the family by providing them with food. I have seen many family members smoke and waste money away. By all means helping needy families is a good thing but there is a need to go beyond that. We need to check if the family is really in need or deserve our help.
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The concept of running the country so that it is profitable has a good intent. So in long run there will be lots of reserves and a lot of spare cash. But achieving the profitability by letting in too many foreigners and business that do not create jobs to locals, rsulting in over-crowding and escalating prices (houses, coes, healthcare etc), is something to ponder on.
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"ya investor101 actually we do that all the time. Selling our L99 house at inflated prices" -- specuvestor
Gov owns the house, we own the lease for 99 yrs!
Ouches! truth hurts!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
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05-05-2014, 11:25 PM
(This post was last modified: 05-05-2014, 11:37 PM by Big Toe.)
Investor 101, many business owners understand where you are coming from, it does not make sense to pay
100-300K for a transfer but this is the current situation of retail space in Singapore. The high transfer fee does make the person an owner,
it gives the person " the right to be a tenant of HDB shop for $ X of rent for a specific number of years". Even paying $5-$6M for a tiny shop nearer a town centre does not make the person an owner. Chances are there is an average of 50-60yrs left on the leasehold, after which the property becomes $0. That's right, from $5-6M to $0. These values are not plucked from thin air, these are actual transactions and banks do value the properties at these prices.
A standard HDB shophouse refers to a shop the size of a 3rm flat(68sqm) with a 3rm flat upstairs.
And they are becoming smaller in size(for the newer estates) and without a residential unit upstairs.
And that's why it makes more sense to pay >$100K for the right to rent a larger space and probably lower rent.
And just for those who is thinking of setting up shop at a good location. You need money, lots of it.
A regular shop rentals are usually $XX,XXX at prime town centres. Even the yellow box is rented out for ard 2K/mth.
If you think this is bad, Hong Kong is even worse.
Disclaimer: I am not in the property trade but do have some knowledge of retail/industrial properties, local and in certain other countries.