Type

Units

Min Area

Price Range

Other

646 sqft

S$3M

Property Highlights

Commercial development with 1 unit currently available.
Prices currently start from S$3M.
For Singaporean second property buyers, ABSD applies at 20% of the purchase price, approximately S$600K on this acquisition.
Located 8 min (640 m) from TE23 Tanjong Rhu MRT Station.

Price Trends & Rental Yield

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Costa Rhu: Commercial Restaurant Investment in Tanjong Rhu

Costa Rhu represents a distinctive commercial real estate opportunity within Singapore's evolving food and beverage sector. Positioned in the established Tanjong Rhu residential district, this restaurant property offers investors a tangible income-producing asset backed by an experienced operational tenant. The development's location within a vibrant mixed-use precinct places it at the intersection of residential demand and growing commercial services, making it an attractive proposition for capital-conscious investors seeking both immediate cash flow and potential capital appreciation.

Location and Accessibility

Situated approximately 640 metres from TE23 Tanjong Rhu MRT Station, Costa Rhu benefits from convenient public transport connectivity that enhances both customer footfall and tenant recruitment prospects. The eight-minute walking distance to the station positions the property within Singapore's established transit-oriented development framework, a feature that typically supports sustained rental demand and reduces tenant vacancy risk. Tanjong Rhu itself has matured into a well-established residential hub, hosting multiple condominium developments whose residents create a consistent customer base for food and beverage establishments.

Investment Profile and Rental Income

The property generates immediate rental income through a recently extended tenancy agreement with an operator who has maintained continuous operations at the premises for approximately a decade. This established track record reduces lessee risk and provides investors with visibility into operational stability. The current lease arrangement delivers monthly rental payments of S$12,000, translating to approximately S$144,000 in gross annual income. Based on contemporary asking valuations, this structure yields a gross rental return of approximately 4.8%, positioning the property competitively within Singapore's commercial real estate yield spectrum. The tenancy has been secured through February 2029, providing nearly five years of income certainty and allowing investors to benefit from contracted revenue streams independent of broader market conditions.

Fully Equipped Commercial Kitchen Facilities

The restaurant unit arrives fully fitted with professional-grade culinary infrastructure, eliminating the substantial capital expenditure typically required to establish a new food service operation. The property incorporates three-phase electrical power supply, essential for operating multiple commercial appliances simultaneously without capacity constraints. A dedicated City Energy gas supply has been integrated throughout the premises, enabling efficient operation of the commercial cooking range and specialised equipment. The kitchen features a tandoori oven alongside a commercial cooking range, supporting diverse cuisine offerings and operational flexibility for the incumbent tenant. New exhaust hood and ventilation systems ensure compliance with environmental standards and provide a comfortable working environment whilst managing steam and odour dispersion effectively. These turnkey facilities represent significant embedded value, as the costs of retrofitting a generic commercial space with equivalent cooking infrastructure would constitute a major capital investment for incoming tenants.

Competitive Market Positioning

Within the Tanjong Rhu precinct and surrounding areas, specialised restaurant premises remain relatively limited, creating a scarcity value that supports both rental pricing and tenant stability. The property serves not only walk-in diners from the immediate residential community but also benefits from food delivery and catering demand streams, diversifying revenue exposure for the tenant. Multiple residential developments cluster within the broader district, including established condominiums and planned Government Land Sales sites, collectively forming a substantial and growing catchment population. This demographic concentration strengthens the underlying fundamentals supporting both current rental income and future appreciation potential, as expanding residential stock directly correlates with increased leisure dining frequency and disposable income within the locality.

Tax and Duty Considerations

A significant structural advantage of acquiring commercial food and beverage properties is the exemption from Additional Buyer's Stamp Duty (ABSD), a consideration particularly relevant for investors purchasing second residential properties or seeking portfolio diversification. Commercial properties fall outside the residential stamp duty regime, eliminating the 20% ABSD liability that would otherwise apply to Singapore Citizens acquiring additional residential properties. This tax efficiency enhances the effective yield and capital preservation for commercial property investors, improving overall return on investment compared to residential alternatives at equivalent price points.

Future Growth Dynamics

The Tanjong Rhu district continues to attract residential development interest and strategic Government Land Sales allocations, suggesting ongoing population growth and expanding consumer spending capacity within the immediate catchment. As new residential projects complete and occupy, the dining and hospitality customer base supporting food and beverage establishments naturally expands, potentially driving rental rate escalation at lease renewal. Historical patterns across Singapore's mature residential districts demonstrate that well-positioned commercial properties within growing precincts experience sustained appreciation as underlying residential populations increase and local amenities diversify to serve expanding demographics.

Investor Suitability

The Costa Rhu investment profile appeals to capital-efficient investors prioritising regular cash distribution and operational predictability over high-growth volatility. The established tenant relationship and secured lease term reduce the management intensity and leasing risk typically associated with commercial property ownership, making the asset particularly suitable for passive investors or those managing diversified portfolios. High-net-worth individuals seeking to allocate capital to income-producing commercial assets find the combination of immediate yield, long-term tenant stability and tax-efficient ownership structure particularly compelling. Investors with prior food and beverage sector experience may also identify opportunities to enhance operational performance or extract additional value through strategic lease renegotiations at renewal junctures.

Frequently Asked Questions

What is the estimated rental yield for Costa Rhu if purchased as an investment property?

Costa Rhu's food and beverage unit delivers a gross rental yield of approximately 4.8% based on current valuation parameters and the existing tenancy arrangement. The property generates S$144,000 in annual rental income through a secured lease agreement, which the incumbent operator has extended until February 2029, providing investors with nearly five years of contracted revenue visibility. This yield profile positions the asset competitively within Singapore's commercial real estate market, particularly when compared to similarly-positioned restaurant and hospitality properties across established residential precincts. The actual net yield will depend on ancillary ownership costs including property tax, maintenance reserves and insurance, which investors should factor into their overall return calculations.

How does pricing compare to recent per-square-foot transactions for restaurant properties in Tanjong Rhu?

The Tanjong Rhu food and beverage market remains relatively segmented, with limited specialist restaurant premises regularly transacting, making direct price comparison challenging. However, commercial properties in established residential districts typically trade within a per-square-foot range that reflects both the underlying location scarcity value and the operational income they generate. At approximately 646 square feet, the Costa Rhu unit falls within the typical footprint for operator-grade restaurant spaces in Singapore's mature precincts, where per-square-foot valuations tend to reflect both the rental income multiple and the embedded value of fitted kitchen infrastructure. Investors should obtain comparative market data from recent commercial transactions within a 500-metre radius of the subject property to contextualise pricing relative to contemporaneous sales activity in the immediate neighbourhood.

Do I need to pay Additional Buyer's Stamp Duty (ABSD) when acquiring Costa Rhu?

No, Additional Buyer's Stamp Duty does not apply to the acquisition of Costa Rhu, as the property is classified as commercial real estate rather than residential property. This represents a significant advantage for investors who might otherwise face a 20% ABSD liability when purchasing second residential properties as Singapore Citizens. The commercial classification of food and beverage premises exempts purchasers from residential-property duty regimes entirely, substantially improving the effective cost of acquisition and the net return on capital invested. This tax efficiency makes commercial property investments like Costa Rhu particularly attractive compared to residential alternatives when evaluating total cost of ownership and after-tax yield metrics.

What is the lease tenure of Costa Rhu, and are there lease decay or resale value concerns?

Costa Rhu is a commercial property with straightforward tenancy terms rather than a residential leasehold unit, so traditional lease decay dynamics do not apply in the same manner. The critical consideration for investors is the duration of the current tenancy agreement, which extends through February 2029, providing nearly five years of contracted rental income security. Upon expiration of the current lease, the property's value will depend on the market's assessment of the likelihood and terms of lease renewal, the condition and specification of the fitted kitchen infrastructure, and demand for specialist restaurant space within the Tanjong Rhu precinct. Commercial properties in Singapore do not experience the same residual-value erosion as residential leasehold units nearing 99-year expiration, as the income-generating potential and underlying land value typically support sustained or appreciating valuations across extended time horizons.

How does proximity to TE23 Tanjong Rhu MRT Station affect demand and capital appreciation prospects?

Tanjong Rhu MRT Station's eight-minute walking distance from Costa Rhu substantially enhances tenant recruitment prospects and customer accessibility, two critical drivers of both rental income stability and capital appreciation in commercial real estate. The station functions as an anchor for the district's residential growth, as each new residential project completion within the catchment adds to the dining-out customer base that sustains food and beverage establishments. Properties located within 400–600 metres of major MRT stations have historically experienced more resilient rental demand and more predictable capital value appreciation compared to properties requiring longer walking distances to public transport. The proximity to TE23 Tanjong Rhu MRT also reduces tenant-search friction, as prospective operators recognise that accessibility drives customer volumes and worker commuting convenience, making the location attractive for lease negotiations and rental-rate sustainability.

Is Costa Rhu suitable for different investor profiles—high-net-worth, upgraders, first-time buyers, or income investors?

Costa Rhu is primarily designed for income-focused and commercial-property investors rather than residential owner-occupiers, as the property is a specialised food and beverage operation rather than a dwelling. High-net-worth investors seeking portfolio diversification, regular cash distribution and lower operational intensity find the established tenant structure and five-year lease certainty particularly appealing, as the arrangement requires minimal active management compared to multi-unit residential complexes. First-time commercial property buyers may also consider Costa Rhu an accessible entry point into food and beverage investment, given the proven operational track record and the absence of tenant-sourcing risk during the current lease term. Investors without prior restaurant or hospitality sector experience should recognise that understanding operational margins, lease renewal dynamics and changing consumer preferences in dining will inform future value trajectory, making sector education a worthwhile investment before committing capital.

What are typical TDSR and financing headroom implications at the current price point for Costa Rhu?

Financing for commercial food and beverage properties typically involves loan-to-value ratios of 60–70%, meaning investors should expect to deploy approximately 30–40% of the purchase price as equity capital. At the current asking valuation, acquiring Costa Rhu would require equity commitment in the region of S$900,000 to S$1,200,000, with the balance potentially financed through commercial mortgage facilities from banking partners. Total Debt Service Ratio (TDSR) calculations for commercial properties tend to be more lenient than residential TDSR frameworks, as banks assess debt serviceability against documented rental income rather than applying maximum income-ratio caps. The secured rental stream of S$12,000 monthly significantly strengthens financing approval prospects, as the property's cash generation demonstrates immediate capacity to service debt obligations, and investors with additional income from other sources will find the combined debt profile manageable within standard banking thresholds.

How does Costa Rhu compare to competing food and beverage developments or commercial spaces nearby?

Specialist restaurant premises remain limited within the Tanjong Rhu precinct, meaning direct competitor comparison is constrained by the scarcity of comparable operational food service spaces. Other commercial properties in the broader district tend to focus on retail services, personal services, or professional offices rather than full-service restaurant operations requiring dedicated kitchen infrastructure. The competitive advantage of Costa Rhu lies in its fully equipped commercial kitchen, the ten-year operational history of the incumbent tenant, and the extension of the lease through 2029, factors that together reduce acquisition risk compared to acquiring a vacant commercial shell requiring substantial capital investment in kitchen infrastructure before tenant deployment. Properties competing for similar investor capital would typically be either smaller food service spaces with shorter lease tenancy, or larger multi-unit complexes with higher management complexity and lower rental yields.

What advantages exist for acquiring Costa Rhu compared to alternative commercial property types in Tanjong Rhu?

The primary advantage of acquiring a tenanted restaurant property over vacant commercial space or alternative property classes lies in the immediate income generation and the elimination of tenant-sourcing risk during the initial lease period. Alternative commercial property types in the district, such as retail or office spaces, often experience higher vacancy rates and face uncertain lease renewal prospects due to evolving consumer shopping patterns and remote working trends. Food and beverage establishments, by contrast, demonstrate resilience in residential catchment areas where dining out remains a consistent leisure and social activity, particularly within affluent neighbourhoods like Tanjong Rhu. The fitted kitchen infrastructure at Costa Rhu also creates higher switching costs for tenants, as relocating to alternative premises would require substantial reinvestment in equivalent cooking facilities, making tenant retention probability higher compared to generic retail or office spaces.

What future supply pipeline and demographic growth factors might support rental and capital appreciation in the Tanjong Rhu district?

Tanjong Rhu and the broader East Coast corridor are experiencing strategic residential intensification through both private condominium development and Government Land Sales site activation, suggesting sustained population growth that will expand the customer base for food and beverage establishments. Upcoming residential completions within the precinct will add hundreds of potential residents within walking distance of Costa Rhu, directly increasing the dining-out market and creating opportunities for rental rate escalation at lease renewal junctures. The district's maturity as a residential location, combined with government infrastructure investment and land-use planning that supports mixed commercial-residential integration, indicates structural support for sustained capital value appreciation. Investors should monitor Government announcements regarding nearby GLS sites and private residential launches, as each new residential project represents a quantifiable increase in the catchment population that fundamentally supports the economics of food and beverage operations within the precinct.

Food & Beverage At Costa Rhu — From S$3M