Serangoon Central coffee shop becomes third to change hands for over S$40 million in Singapore

SINGAPORE: A coffee shop located in Serangoon Central has reportedly been sold for a staggering S$40.5 million, marking the third instance of a coffee shop resale surpassing S$40 million in Singapore.

According to a report by the Singaporean Chinese media outlet 8World News, Wan Jin Coffee Shop, situated on the ground floor of Block 261 along Serangoon Central Drive, was acquired by a private company, AMK Food Court.

The buyer reportedly sought a caveat in September this year, and the completion of the transaction is pending.

This bustling coffee shop comprises 13 stalls, featuring renowned names such as ‘Fried Rice King’ and ‘Yishun 925 Chicken Rice.’

In June last year, two coffee shops in Yishun and Tampines changed hands for over record-high S$40 million transaction, which shocked the entire city-state.

The Tampines coffee shop was acquired for a record $41.68 million, whereas the Yishun establishment sold for S$40 million.

Real estate buyers typically apply for a caveat after paying a deposit and fulfilling purchase-related formalities, ensuring a safeguard against subsequent property transactions that could compromise their interests.

As per the Urban Redevelopment Authority (URA), this recently sold coffee shop still holds approximately 65 years on its leasehold tenure.

Records of the transaction indicate that Wan Jin spans an area of 390 square meters or approximately 4,198 square feet.

Based on these metrics, the average price per square foot of this deal stands at S$9,647, likely ranking among the highest in recent coffee shop transactions.

The most expensive coffee shop in Tampines Street 21 covers an area of 604 square meters (approximately 6,501 square feet), qualifying as one of the larger coffee establishments, with an average price per square foot of around S$6,411.

On the other hand, the Yishun coffee shop, sold for S$40 million, spans an area of 397 square meters (approximately 4,273 square feet), with an average price per square foot of S$9,361.

AMK Food Court reportedly operates under the parent company, Broadway, a prominent local coffee shop operator.

Previously, Broadway had acquired 23 coffee shop branches from the S11 F&B group in the first quarter of 2018, with conservative estimates placing the acquisition cost at over S$200 million.

Upon reviewing the comments from netizens on an 8World News Facebook post, some individuals were expressing concerns regarding potential rental increases after the substantial transaction.

There is worry that the significant surge in property resale prices may ultimately impact the hawkers at the coffee shop, leading to increased pressure on food prices in the future.

Hawkers forced to throw in the towel as rental hike becomes unsustainable

The concerns highlighted here have been persistently raised, reflecting ongoing discussions within the Singaporean community about the formidable challenges faced by those operating hawker stalls in the city-state.

Many of these hawkers grapple with the escalating costs of food and materials, not to mention the burden of high rental fees.

Despite the inflation, most hawkers are hesitant to increase their prices, fearing the loss of customers to competitors and drawing criticism from the public.

Some hawkers voiced worry that increasing the prices could risk damaging these relationships and losing loyal customers.

According to a Bloomberg report in September, food prices at hawker stalls have surged by over 12% in the last two years.

This steep increase is attributed to soaring property prices and rents, now determined through a bidding system.

The impact of these rising costs has been particularly harsh on individuals with lower incomes, for whom hawker food is often an essential and affordable option.

Earlier this year, Shin Min Daily News reported that a delivery rider turned hawker threw in the towel after two years of running a rojak stall. He had been earning only S$400 a month after deducting the stall’s rental and other costs.