SINGAPORE: NTUC Enterprise’s real estate unit Mercatus Co-operative is understood to have quietly put on the market a portfolio of 18 commercial properties in Housing Board estates.
The properties have a total indicative price of around S$265mil.
The 18 properties add up to about 170,000 sq ft of space in Housing and Development Board (HDB) shops, shophouses and low-rise commercial blocks. The portfolio has full occupancy.
About 80% of the space is leased to FairPrice, which is set to keep its long-term tenancies in the properties.
The properties are in locations such as Bukit Merah Central, Kallang Bahru, Bishan, Hougang, Serangoon North, Holland Drive, Tampines, Bedok, Buona Vista, Clementi, Choa Chu Kang, Jurong East and Jurong West.
The balance tenures for the properties vary, but average at around 57 years.
Word in the market is that the 18 properties have been split into three bundles, with prospective buyers able to submit offers for individual bundles, or the entirety of the portfolio.
Clemence Lee, executive director of capital markets for Singapore at property consultancy CBRE, said: “Mercatus is exploring a sale of a portion of its assets via an expression of interest exercise. CBRE has been appointed as the agent.”
He confirmed that the assets would be sold with existing long-term tenancies in place but said that “we are unable to disclose details of the portfolio due to commercial sensitivities”.
“There is no certainty or assurance that this exercise will lead to a transaction and we cannot speculate on the outcome of the exercise,” he added.
A spokesman for Mercatus said it regularly reviews its portfolio to deliver greater social impact and generate long-term sustainable returns for its stakeholders.
For now, it is business as usual and Mercatus remains committed to safeguarding the interests of all stakeholders, including its tenants and their customers, it added.
Over the past nine months, Mercatus has sold a chunk of its Singapore retail assets for a total of slightly above S$3bil.
In late December 2022, it entered a deal to sell Jurong Point and Swing By @ Thomson Plaza to Hong Kong-listed Link Real Estate Investment Trust for S$2.16bil.
In late January 2023, it struck a deal to sell its half stake in Nex mall in Serangoon Central to Frasers Centrepoint Trust and Frasers Property in a deal that valued the prime suburban mall (100% interest) at S$2.08bil.
Market watchers noted that the 18 properties being offered via expression of interest are in mature HDB estates, with a captive catchment of heartlanders shopping for daily necessities.
The assets may appeal to prospective investors focused on stable income with built-in rental increases.
The smallest property is a 797 sq ft first-floor shop unit in Hougang Avenue 3 occupied by a Cheers outlet.
This is the convenience-retail format of supermarket chain FairPrice.
The other 17 properties are anchored by FairPrice supermarkets. FairPrice is part of the FairPrice Group, which comprises FairPrice, NTUC Foodfare, Kopitiam and NTUC Link.
The NTUC Enterprise group of social enterprises are: FairPrice Group, NTUC First Campus, NTUC Health, Income Insurance, NTUC LearningHub, Mercatus and MoneyOwl, which is closing shop by the end of 2023. — The Straits Times/ANN
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