FORGET the Central Business District. Property investors priced out of prime zones but still hunting for a good buy should look to downtown's upcoming hot spot - the Beach Road, Ophir-Rochor district.
This hotchpotch of an area - with old shophouses dotting its landscape, juxtaposed with towering modern office blocks - is set for a snazzy makeover, as announced by the Government this week.
Already, property experts have identified strong potential upside for properties in the district.
Minister of State for National Development Grace Fu said it would be 'an extension of Bugis', complementing the Marina Bay financial district.
Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.
The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.
One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million - or $1,077 per sq ft (psf) - in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.
The same unit now costs more than $2 million - or $1,539 psf - on the market, said the 61-year-old retiree.
Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.
While Singapore's property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore's director of business development and marketing, Mr Ku Swee Yong.
Beach Road already has its own crown jewel in South Beach - an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.
On Thursday, the Government said it would release one more 2.74ha plot - between Rochor and Ophir Roads, surrounding Parkview Square - as a multi-use 'white site' next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.
CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.
'A mini-Raffles City on the white site is likely to do very well,' added Mr Ku.
Shophouses are now particularly attractive, especially those facing the new plot, he said.
Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.
The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.
Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.
Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.
Still, before that can happen, certain parts of the district have to be 'spruced up' and polished, added Mr Ku.
Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area's new trendy image.
Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.
Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.
Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.
While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good 'trickle-down effect'.
'This district will remain attractive, especially to us, as it's a creative hub with lots of knowledge-driven businesses and schools in the vicinity,' he said. 'It's got a good vibe.'
Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was 'the' entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.
'Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,' he said.
