DECEMBER 04, 2012
Carved out leases help in case needs in future change
Four properties owned by The Islamic Religious Council of Singapore (Muis) have been put up for sale by public tender last week. However, they are all being sold on a unique leasehold of 199-years.
According to Ong Choon Fah, DTZ's South-east Asia chief operating officer such carved out leases are long-term investment strategies which are calculated based on the future needs of the organisation.
"Some religious and not-for-profit organisations carve out a lease because they do not want to give it away in perpetuity and also because needs in the future might change," explained Mrs Ong.
Two of the four properties are intermediate terrace houses located along Duku Road with an approximate land area of 2,000 sq ft.
According to information on Muis's website, the terrace houses were willed by Shaikh Ahmad Bin Bakar Bin Abdullah Jabbar in July 1947 and net proceeds from the property will be used to pay for expenses of Masjid Mydin, the mosque located at the corner of Jalan Lapang and Jalan Sayang.
Expenses include salaries of the clergyman, repair works, electrical bills and the maintenance and education of orphans of Muslim worshippers at the mosque.
The other two properties up for sale are inter-terrace conserved shophouses located at Rowell Road and Upper Weld Road.
Both shophouses have an approximate land area of 1,100 sq ft and an approximate built up area of 2,100 sq ft. The properties have been zoned for commercial use within the Little India conservation area.
The Rowell Road shophouse was purchased on behalf of the Omar Alkaff mosque in Yemen and net profits will be used for the general purposes and upkeep of the mosque in Tarim, Yemen.
The Upper Weld Road shophouse is part of a collective trust willed by Shaik Abdullah Bin Said Bin Omar Makarim in 1954 and includes two other properties in the Serangoon Road area.
Proceeds from the sale of the shophouse at 50 Upper Weld Road will be used to fund mosques and Islamic schools in Singapore which are in need of assistance as well as provided to the less fortunate in Mecca and Medina.
Explaining the possible reason behind the carving of a 199-year lease for all the properties in contrast to the more common 99-year leases, Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group said that the 199-year lease could provide more investment returns for the owner.
"If the buyer is allowed to redevelop the intermediate terraces or build an extension to the conservation shophouses, the buyer will be willing to pay more. The value of a 199-year lease could be around 15 per cent higher than a property with a brand new 99-year lease."
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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