HDB Coffeeshop and Four Retail Units in Portfolio on Sale for $30.92M

The sale of a portfolio of five retail units may be the best chance this year for aspiring investors to pick up high yielding commercial assets to jump start an investment portfolio, or significantly increase an existing holdings.

The portfolio of properties comprise two HDB coffeeshops, a HDB shophouse, and two strata titled retail units.

The guide price for the entire portfolio is $30.92 million, and the properties can be acquired collectively or on an individual basis. The price of the individual units range from $4 million to S$10 million. The properties are marketed by CBRE, and will be sold in an expression of interest (EOI) exercise.

The properties for sale are located across several prominent commercial hubs and mature residential estates, including Tanjong Pagar, Orchard Road, Jurong East, and Marine Parade.

The list of properties:

All the retail assets are in high density catchment areas in proximity to key transportation hubs.

It is unusual for this many HDB shops and shophouses to be available for sale as a portfolio. These types of commercial properties are not often on the market and are very quickly snapped up by astute investors given their relative scarcity.

“HDB coffeeshops remain one of Singapore’s most exclusive asset classes, out of the 8,500 privately-held HDB shophouses nationwide, a mere 402 are privately-held and approved for coffeeshop use,” says Clemence Lee, executive director of capital markets, Singapore at CBRE.

The scarcity is compounded because HDB has stopped selling new shops since 1998, making this retail property a “blue-chip opportunity” that is often tightly held by owners and investors, he says.

In addition, units that also come with approved F&B usage or as coffeeshops are in especially high demand, and typically command a rental premium compared to non-F&B units in the neighbourhood.

This is because securing F&B approval takes a long time and is not always guaranteed. But F&B units and coffeeshops generally attract strong footfall and brisk business, which bodes well in terms of upward rental revision and yields over time.

Lee adds that the portfolio is priced at a “palatable investment quantum” and he expects buying interest will come from owner-occupiers, boutique real estate funds, corporate investors, family offices and high net worth individuals.

The diversity of the units in this portfolio also opens up a possible exit strategy for the next owner, looking at individual sales of the  units as an exit strategy in the future, with each unit being priced at a much lower quantum that can appeal greatly to individual investors and owner occupiers,” says Lee.