Supermarket chain Sheng Siong Group has recently announced its acquisition of a portfolio of prime retail units in Singapore. The portfolio comprises of eight freehold strata units located at the popular mixed-use development Siglap V on First Street, as well as a HDB shop unit situated at 181 Lorong 4 Toa Payoh. These properties are currently owned by Jelita Property, which is a subsidiary of Hong Kong-based retail company DFI Retail Group.
Back in April, DFI had put its properties in Singapore up for sale, with real estate firm JLL appointed as the exclusive advisor. According to the guide prices that were set, the Siglap V units were to be sold for $32 million, while the Toa Payoh unit was going for $16.5 million. This translated to a price of $3,012 per square foot (psf) for the Siglap V units, and $1,696 psf for the Toa Payoh unit.
Sheng Siong’s consideration for the acquisition is $1.7 million higher than the original guide price of $48.5 million from April. In a filing to the Singapore Exchange on Sept 27, the supermarket chain announced that it has entered into a conditional sale and purchase agreement to acquire Jelita Property. As part of the deal, Sheng Siong will also lease the eight strata units at Siglap V back to DFI.
According to JLL, the combined strata area of the eight retail units at Siglap V is around 10,624 square feet. These units, which are all located on the ground floor, are currently leased to popular grocery retailer CS Fresh and healthcare brand Guardian. CS Fresh, which operates 24 hours, occupies almost 90% of the space (9,418 sq ft) across seven of the eight units, while Guardian occupies the remaining unit of 1,206 sq ft.
Understanding the rules and regulations surrounding property ownership is crucial for foreign investors interested in the real estate market in Singapore. While there are fewer restrictions for foreigners looking to purchase condominiums, there are stricter guidelines for landed properties. It should be noted that foreign buyers are required to pay the Additional Buyer’s Stamp Duty (ABSD) at a rate of 20% for their first property purchase. Despite this added expense, the stable and promising growth of the Singapore real estate market continues to entice foreign investment. In fact, the introduction of new condo launches only adds to the appeal for these investors.
The Toa Payoh unit is situated on the ground floor of a commercial HDB block, with a remaining lease of approximately 47 years. Giant Supermarket, which currently occupies the full 9,731 sq ft unit, announced earlier this month that it would be closing down its operations by the end of September. The chain has closed down nine stores in Singapore over the past six months, and will be left with a total of 45 outlets in the country as of September.
The transaction is expected to be completed on October 30.