4 lessons investors can learn from the sale of Mustafa Centre

5 min read
Mustafa Centre is known for selling anything and everything you can dream of buying
Mustafa Centre is known for selling anything and everything you can dream of buying

Mustafa Centre is closing its Serangoon branch, and moving stock back to the main store. The reason is the slated demolition of Serangoon Plaza, probably sometime this year. Mustafa Centre has occupied three floors of Serangoon Plaza since 1985, a whopping 65,000 square feet. Here are some interesting property lessons to pick up from their history, which apply to both home and commercial spaces:

  1. Walk the grounds yourself, and do so often

The boss of Mustafa Centre, Mr. Mustaq Ahmad, is known for being hands-on. Most of the staff can attest to how he’s often the first to work, and the last to leave. This isn’t just good for business, but also for gauging the property market around you.

When you frequent your property, you can keep an eye on latest developments. You’ll know if a new development is coming up nearby, which is important for gauging the competition (will they undercut you for tenants?)

You can also see the popularity (or lack of it) in surrounding amenities like hawker centres and parkland.

For commercial properties, you need to be present to see opportunities. A large part of Mustafa Centre’s success is due to their responsiveness to shoppers – they know how to configure the floor space of the mall to maximise returns per square foot. This is derived from more than sales figures; it comes from direct observation of customer behaviour, and noting foot traffic in different parts of the mall.

Sometimes, just seeing what kind of people frequent your property’s surroundings (students, housewives, young professionals, and so forth) is enough make a strategic difference in your plans.

  1. Ask before doing

Mustafa Centre was once fined $17,000. This was for posing a fire hazard (the store was too packed), and for unauthorised use of a corridor for retail purposes.

In Singapore, owners of commercial property have long had a “do first, apologise later if you have to” attitude. The prevailing sentiment is that it’s harder and slower to ask for permission (such as to stack things dangerously close to the fire hose), than to just do it and apologise later.

But sometimes, that apology is accompanied by a fine. It’s even worse if something does go wrong – such as someone dying in a fire – and then resulting in a lawsuit.

For landlords of residential properties, always get permission to make renovations and alterations. If you don’t, you too might get “closed down” while you have undo your renovations. And the cost of that vacancy can amount to several months of rental income.

As slow and annoying as it may be, ask before you do. Never assume your “small” changes are also small to our authorities.

  1. The key to making your property work is simple: be useful

Mustafa Centre is known for selling virtually anything. From gold to groceries to electronics, to money changers and flight tickets, and even cars for a brief period. Even the cashiers in Mustafa Centre can draw money for you, as if they’re ATMs.

This probably goes back to Mr. Mustaq Ahmad’s past, in which he began by selling handkerchiefs from a roadside stall.

The key thing to note is that Mustafa Centre, and its management, seldom suffer from tunnel vision. They observe what’s needed, and adapt to provide the service. They are also quick to cancel what doesn’t work (the short-lived car business).

The property moves with them in this capacity, changing to sell whatever’s needed.

That’s a good perspective for any landlord to have. Rather than fix your focus on one thing (e.g. My property is for expatriates, or my property is for low cost retail tenants), try to be open-minded. When you change or upgrade your property, focus on being useful to prospective tenants (and know what that is, see point 1).

Don’t make changes to your property solely on the basis on what you think would be great. Sometimes, no one wants to pay more rent for an apartment just because of its walk-in wardrobe. Just like no one may want to rent your commercial space for F&B, no matter how badly you want to be the landlord of a famous restaurant.

Let your tenants be the main decider of changes and upgrades.

  1. Look for tenants that are a low cost provider of essentials

This is also a trait Warren Buffet looks for in businesses. Commercial property owners should learn one important lesson from Mustafa Centre:

If you want a long term tenant with good prospects, pick a low cost provider of essential items or services. Think Sheng Siong, instead of a fancy gourmet deli with $500 hams, or a luxury goods retailer. A low cost provider of essentials is a recession resistant, and often highly capitalised business.

Looking to sell your property?

Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.

One easy way is to send us a request for a credible and trusted property consultant to reach out to you.

Alternatively, you can jump onto 99.co’s Property Value Tool to get an estimate for free.

If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal 99.co.

Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.

Join our social media communities!

Main Facebook page
Facebook #All Things HDB page
Facebook #Condo-Maniacs page
Facebook #UHNWIs Luxury Homes page
Instagram Main
Instagram #HouseInsights
Instagram #HouseTips
TikTok Main
TikTok #HouseTips

Reader Interactions

Leave a comment

Your email address will not be published. Required fields are marked *

Get the latest news in your inbox

  • This field is for validation purposes and should be left unchanged.