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The curious case of multi-million-dollar coffeeshops in Singapore

The curious case of multi-million-dollar coffeeshops in Singapore
PHOTO: Stackedhomes

If anything will make me believe in Feng Shui, it’s coffee shops.

Take, for instance, this coffee shop which I frequent, which was sold for $40.5 million. To begin with, I personally disagree with most of the comments on why exactly that coffee shop is so valuable. 

Because it has a KFC and draws students? X to doubt (*gamers of LA Noire would know this). There’s a KFC in Nex, which — as the same article will tell you — is about five minutes away.

That’s where I see students, because like me, if they want to eat at KFC, they’ll go to the air-conditioned one in Nex (which is also next to Jollibee and Yoshinoya, so you can even mix-and-match your meal). 

A lack of competition nearby? Also dubious. There are at least three other coffee shops nearby, at least one of which is far more packed. 

As for being near Nex? To me, that’s even less reason for it to be valuable, because have you seen the number of food options at Nex? There are TWO giant food courts in it.

One day of food supplies to Nex could probably feed a small village for a week. The last place I would set up a coffee shop is within walking distance of Nex.

But I’m wrong, and the market says so. 

None of my reasoning, which I assert is solid "on-the-ground, I-live-here" reasoning, matters. Not compared to the fact that someone bought it for $40.5 million, because as the old saying goes, everything is worth what someone will pay for it.

There are other coffee shops here that are just as popular. There are coffee shops minutes away with (some) better stalls. Are those worth over $40 million? I doubt so. But why, when they’re practically in the same location? 

This also brings up tangentially related mysteries, such as:

  • Why do some Singaporeans always walk to a further coffee shop, even if the food at a closer coffee shop is of similar quality?
  • What makes one cai png stall work, while another — which may be less than 100 metres away with the same dishes — fail? 
  • Why do the "old uncles who stay past 11pm" do so only at one coffee shop, and not the one right next to it? 
  • Why is the coffee shop that’s closer to the JC/office/factory etc. not always more valuable than the one further from it*?

*Personal anecdote from a commercial investor back in 2011 — their group’s coffee shop, which was closest to both a JC and some offices, sold for about two-thirds of the price of another coffee shop, that was 15-minutes further on foot. 

What makes one coffee shop more valuable than another is a total mystery. Check out the list of coffee shops mentioned in the article, which sold for $40 million or more. Are any of them particularly famous? I bet most readers haven’t ever heard of them. 

So when someone brings up Feng Shui for coffee shops, I think maybe that’s a better analytical approach than anything I have. This is also why I stick to residential properties, by the way — while residential isn’t always a saner market, there’s more consistency in its brand of craziness.

I am very curious about these coffee shops though, anyone in this market that is willing to share, reach out to me please! It’s no wonder at these prices the prices of food at these coffee shops have begun to rival those that you see at food courts. 

Weekly sales roundup (Dec 4 — Dec 10)

Top 5 most expensive new sales (by project)

PROJECT NAME PRICE $ AREA (SQFT) $PSF TENURE
WATTEN HOUSE $7,595,000 2368 $3,207 FH
MIDTOWN MODERN $4,319,000 1464 $2,950 99 yrs (2019)
19 NASSIM $3,453,280 969 $3,565 99 yrs (2019)
LENTOR MODERN $3,316,500 1528 $2,170 99 yrs (2021)
BLOSSOMS BY THE PARK $3,188,000 1302 $2,448 99 yrs (2022)

Top 5 cheapest new sales (by project)

PROJECT NAME PRICE $ AREA (SQFT) $PSF TENURE
THE LANDMARK $1,414,195 495 $2,856 99 yrs (2020)
THE MYST $1,480,000 678 $2,182 99 yrs (2023)
PINETREE HILL $1,690,000 700 $2,415 99 yrs (2022)
THE LANDMARK $2,009,000 764 $2,629 99 yrs (2020)
THE BOTANY AT DAIRY FARM $2,131,000 1076 $1,980 99 yrs (2022)

Top 5 most expensive resale

PROJECT NAME PRICE $ AREA (SQFT) $PSF TENURE
WATERFALL GARDENS $7,100,000 3380 $2,101 FH
LEONIE TOWERS $5,900,000 2960 $1,993 FH
BEAVERTON COURT $5,555,000 3122 $1,780 FH
SUTTON PLACE $5,168,000 3305 $1,564 FH
THE SAIL @ MARINA BAY $5,000,000 2056 $2,432 99 yrs (2002)

Top 5 cheapest resale

PROJECT NAME PRICE $ AREA (SQFT) $PSF TENURE
SUITES @ KOVAN $595,000 366 $1,626 FH
KINGSFORD WATERBAY $698,000 474 $1,474 99 yrs (2014)
H2O RESIDENCES $720,000 527 $1,365 99 yrs (2010)
LAUREL TREE $726,888 463 $1,570 FH
ALEXIS $750,000 398 $1,883 FH

Top 5 biggest winners

PROJECT NAME PRICE $ AREA (SQFT) $PSF RETURNS HOLDING PERIOD
THE SAIL @ MARINA BAY $5,000,000 2056 $2,432 $2,700,824 19 Years
NATHAN PLACE $3,650,000 2024 $1,804 $2,076,890 20 Years
SUTTON PLACE $5,168,000 3305 $1,564 $2,018,000 17 Years
THE SAIL @ MARINA BAY $4,500,000 2045 $2,200 $1,429,920 18 Years
ENG HOON MANSIONS $2,180,000 1421 $1,534 $1,390,000 17 Years

Top 5 biggest losers

PROJECT NAME PRICE $ AREA (SQFT) $PSF RETURNS HOLDING PERIOD
LUMIERE $1,090,000 635 $1,716 -$240,000 13 Years
GILSTEAD TWO $1,675,000 775 $2,161 -$49,200 13 Years
KINGSFORD WATERBAY $1,145,000 850 $1,346 -$17,000 5 Years
SANDY EIGHT $870,000 506 $1,720 -$10,000 6 Years
AFFINITY AT SERANGOON $910,000 538 $1,691 $44,000 3 Years

Transaction breakdown

ALSO READ: Serangoon coffee shop sells for eye-watering $40.5 million

This article was first published in Stackedhomes.

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