You will still see the same old faces here every day, jokes the regulars at a quiet coffee shop in Tampines.
The place was put up for sale late last month, with an asking price of $10 to 12 million.
This tender exercise comes just months after a coffee shop in Hougang was reportedly sold for a record price of $23.8 million.
But patrons and stall owners are puzzled by the asking price of this particular Tampines coffee shop, DE 131.
It is on the ground floor of Block 915, Tampines Street 91, and next to a salon and education centre. It is also a short walking distance from a few schools.
Despite its proximity to schools and residences, patrons say business at coffee shops in the vicinity is usually poor.
A coffee shop a few blocks away recently closed down, residents said.
When The New Paper visited the coffee shop twice last week on weekdays during lunch and dinner hours, it was only about half-full.
Mr Lim Kiam Hua, 61, spends three days a week at this coffee shop.
The unemployed man said he frequents the place only because it is the one nearest to his house.
"Honestly, most of the food here is not very nice. The Indian food was the best, but they closed down a while ago.
"One egg here is 10 cents more expensive than other places. I eat four each time, so it comes up to a lot. But I have no choice," he said, pointing to his walking stick.
Stalls come and go
Mr Eric Chan, 67, who has been a customer for decades, said the stall owners usually don't stay long.
"The food at the other coffee shops nearby are better, but sometimes the weather is too hot to walk over.
"This coffee shop only serves one kind of beer and there is only one beer lady," the retiree added with a laugh.
There are nine stalls, selling a range of food such as chicken rice and char kway teow.
Rents at this coffee shop average about $2,800 a month, according to the coffee shop supervisor, who declined to be named.
Rojak seller Benny Ho, 65, moved to this coffee shop a month ago and pays $600 a month for a makeshift stall.
He complains that business has fallen by about 30 per cent compared to the previous coffee shop he was at - the one a few blocks away that had closed down.
"There are fewer customers here. I'll probably look for a new place soon," he said.
The coffee shop has a floor area of 4,058 sq ft and comes with an additional 786 sq ft of living quarters on the second level. It is tenanted till 2015 and has 70 years left on its lease.
It is similar in size to the Hougang Avenue 4 coffee shop, which has 17 stalls.
Local director at Jones Lang LaSalle, Ms Irinn Lee, who is representing the sellers, said the response has been good and she has received many enquiries from agents and investors.
She said: "The owners want to cash-out because prices have gone up in recent years. The supply of this type of coffee shop is low because not many people want to sell."
There are concerns that the high transaction prices of coffee shops will hurt customers in the long term.
A new management may result in higher rent and hence, higher food prices.
Last month in Parliament, MP Foo Mee Har asked if there are safeguards in place to moderate potential rental increases for HDB coffee shop tenants in light of the escalating transacted prices for HDB coffee shops.
In a written reply, the Ministry of National Development said that the rents are business decisions. Nonetheless, HDB will monitor the commercial properties market and intervene to prevent speculation and excessive price increases.
Mr Hong Poh Hin, chairman of the Foochow Coffee Restaurant and Bar Merchants Association, said that transactions of over $10 million are rare and isolated cases.
He added that it is unlikely that food prices at these coffee shops will increase because it will drive customers away.
The association is the largest such grouping in Singapore, with members making up one in three coffee shops and food courts.
"The operators will have to make the decision if the operating cost increases, but food prices must still be reasonable."
He pointed out the Government's plan to build about 30 new eating houses and 10 new hawker centres, which worries current coffee shop operators.
"Customers shouldn't be worried. The food at coffee shops will still remain affordable," he said.
Money can't always buy you a coffee shop
The rarity of the coffee shop makes it attractive to investors, said industry experts.
"Even if you had the money, it doesn't mean you can find a coffee shop to buy," said Mr Eric Cheng, group CEO of ECG group of companies, which deals with property services and development.
There are 714 eating houses in HDB estates, of which 429 are sold and 285 are on rental.
An average of 33 transactions took place per year in the past three years, which translates to less than 8 per cent of sold coffee shops, according to the Ministry of National Development.
Although the transacted prices of eating houses have gone up, the average number of transactions is 33 cases per year for the past 3 years. They form less than 8 per cent of the total number of sold eating houses.)
Coffee shops are also recession-proof, said Mr Hong Poh Hin, chairman of the Foochow Coffee Restaurant and Bar Merchants Association.
"Whether the economy is good or bad, you will still be able to rent out the stalls, compared to say, an office space," said Mr Hong, who owns two coffee shops.
Besides the stable rental yield of at least 1 to 2 per cent, capital appreciation is another factor.
Said Mr Cheng: "The coffee shop is like an art piece - its worth will appreciate over time."
He added that buyers are usually long-term investors or coffee shop chain owners who are hoping to expand.
But location still matters, said Mr Roy Chong, head of business space at PropNex.
"The fundamentals still apply. The location and human traffic is important too. Capital appreciation is a by-product of good rental yield," he said.
Still a risk
Finding the right operator and tenants are another factor, said Mr Lucas Chan, associate team director at Propnex.
"It is not a straightforward investment. You must open your eyes wide and there is still a risk.
"The track record of the operator is important. Even if the rental is high, you must consider how long the tenants can sustain there. Some might even delay the rent," said Mr Chan, who specialises in commercial property.
He is now representing a seller of a coffee shop in Geylang. The asking price is $9 million.
It was put up on the market two weeks ago.
"We are riding the wave too," admitted Mr Chan.
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