A portfolio of four HDB commercial properties in two mature neighbourhoods in Singapore are now on the market, for a collective guide price of $38 million. The properties comprise a coffeeshop unit in Toa Payoh and three ground floor retail units in Jurong East.
CBRE is the sole marketing agent for the sale of this portfolio, which will be conducted in an Expression of Interest (EOI) exercise. The portfolio may be acquired collectively, or units can be sold on an individual basis.
Properties and Locations
The ground-floor corner coffeeshop is located at 183 Toa Payoh Central. The property benefits from a prominent 30m street-level frontage, and is opposite Toa Payoh Public Library, and close to HDB Hub and Toa Payoh MRT station on the North-South Line (NSL).
The unit for sale has a total floor area of 1,851 sq ft, and a guide price of $16 million. Upcoming development plans in Toa Payoh Central revolve around the new 12-hectare integrated development along Lorong 6 Toa Payoh.
This new building will house a new sports stadium, an aquatic centre, a sports hall, a polyclinic and a public library. It is scheduled for completion in 2030.
Jurong East Properties
Meanwhile, the other three commercial units for sale are all found at J Connect (previously known as Jurong East Town Centre) at 135 Jurong Gateway Road. There are two units which span 1,195 sq ft each, as well as a 592 sq ft unit.
Both of the larger commercial units have a guide price of $8.25 million each, while the smaller unit is on sale for $5.5 million. Development activity in this part of Jurong East was recently in the spotlight, particularly during the launch of J’Den in 2023.
The upcoming 368-unit development, which also has a commercial podium, is opposite J Connect and all three commercial units face the new project. This part of Jurong East is anchored by several existing transport hubs and commercial developments, including Jurong East MRT Interchange.
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Rarity of HDB Shophouses
HDB shophouses are usually single-storey, or two-storey units with a ground floor shopfront component, that are commonly found in most HDB estates and town centres. These types of properties are among the rarest commercial assets on the market, with approximately 8,500 still in private ownership.
HDB stopped selling commercial units and shophouses to private owners in 1998, and subsequent commercial properties in new towns and estates – such as Bidadari and Punggol – have been on leases. Among the privately held HDB commercial units, coffeeshop units are even more scarce.
Clemence Lee, Executive Director of Capital Markets at CBRE, notes that these types of coffeeshop properties, particularly those located along high-traffic corridors, like Toa Payoh and Jurong East, are among Singapore’s most exclusive commercial assets.
It is worth noting that the Toa Payoh shophouse is the only unit in the portfolio that is approved for coffeeshop use. The Jurong East units carry a general retail approval instead. The sale of these neighbourhood commercial properties are available to local and foreign investors alike, without the transaction attracting any ABSD.
Investment Opportunity
Clemence Lee says this portfolio presents investors with a rare opportunity to acquire a defensive collection of prime HDB coffeeshop and retail units, offering resilient net yields above 3.7%. The portfolio is priced at a palatable investment quantum of around S$38 million for the entire portfolio, or between S$5.5 million and S$16 million for individual units.
Lee expects strong interest from a wide range of investors. The purchaser may also consider divesting the units individually as a future exit strategy, given each unit is priced at a much lower quantum that can appeal to both private investors and owner-occupiers.
The EOI exercise for the portfolio of HDB commercial units and coffeeshop will close on October 8.
