Despite their reputation for providing affordable meals, coffee shops in Singapore have become the latest battleground for staggering real estate transactions. The recent sale of a coffee shop located at Block 261 Serangoon Central Drive for a remarkable S$40.5 million adds to the trend of skyrocketing prices in this property sector.

This eye-watering transaction is part of a series of high-profile coffee shop sales, including a Yishun establishment sold for $40 million and a Tampines coffee shop changing hands for an astonishing $41.6 million, both in the past year.

The Serangoon coffee shop, which has been serving the community for over three decades, boasts a remaining lease of 65 years, covering an area of approximately 4,198 sqf. The per square foot (psf) price for this transaction comes in at $9,647, surpassing the rates of previous sales in Yishun and Tampines.

Location plays a pivotal role, with the Serangoon coffee shop strategically positioned next to a main road and within a five-minute walk of the Serangoon MRT station and Nex shopping mall.

A notable aspect of this coffee shop is the presence of a rare KFC fast-food stall among its diverse range of offerings. This unique feature serves as a draw for students from nearby schools, further enhancing the establishment's appeal.

Kenneth Lee, Chairman of the Kheng Keow Coffee Merchants Restaurant & Bar-owners Association, compares the rising prices of resale coffee shops to the trend observed in HDB flats, predicting a continuation of this pattern.

While the resale value of the coffee shop may be staggering, the market forces dictates food prices, and stall owners are constrained in how much they can increase prices. If it is too high, they will lose some customers. 

Regular customers express understanding about the potential for increased food prices but hope that any adjustments will be reasonable. An unnamed stall owner, aware of the sale, indicates that even if the new owner raises the rent, there are currently no plans to increase the prices of the food sold at the coffee shop.

As the landscape of Singapore's coffee shop market continues to evolve, the Serangoon coffee shop's record-breaking sale prompts discussions about the intersection of real estate, business sustainability, and the delicate balance of maintaining affordability for patrons.