Mercatus said to put up 18 commercial assets for sale
Singapore: Mercatus Co-operative, NTUC Enterprise’s real estate unit was said to have put up 18 commercial assets for sale in HDB estates. The combined indicative value of those properties is $265 million. The total space adds up to 170 square feet in HDB shops, shop house and low rise commercial blocks. About 80 percent of these space is rented out to Fairprice who are committed to keep to the long term tenancies in these properties.
Location of the assets
The properties are located in 13 locations; Bukit Merah Central, Kallang Bahru, Bishan, Hougang, Serangoon North, Holland Drive, Tampines, Bedok, Buona Vista, Clementi, Choa Chu Kang, Jurong East and Jurong West. On average the balance tenures of these properties are about 57 years.
According to newspaper report, the 18 properties have been split up into bundles. Prospective buyers may put up offers for individual bundles or the whole portfolio.
Mr Clemence Lee, executive director of capital markets for Singapore at CBRE said that Mercatus is considering a sale of a portion of its assets via expression of interest exercise. He also confirmed that the assets wold be sold with existing tenancies.
He added that it is uncertain if this exercise will lead to a transaction or not and that hence they cannot speculate the outcome of the exercise.
Specifications of the assets
The smallest property is a 797 sqft first floor shop in Hougang Ave 3. It is occupied by a Cheers Outlet. The other 17 other properties are leased to Fairprice supermarkets. Fairprice is part of Fairprice group which also includes Fairprice NTUC Foodfare, Kopitiam and NTUC Link
The more centrally located property of the 18 is s a space estimated to be 30,700sqft at 71 Kallang Bahru which is a short walk from Geylang Bahru MRT station. It is a 2 storey commercial block with some shops on the first floor and NTUC occupying the bulk of the area.
Another good size asset is a 3 storey commercial block at 510 Bishan Street 13, doorstep to Bishan MRT station. Fairprice takes up art 21,000sqft on this space while other tenants occupying the rest.
Both of these properties have good potential for enhancement by reconfiguring and repositioning some areas to cater to tenants that can pay higher rent.
Among the other assets in the portfolio includes a Fairprice supermarket space of about 13,500 sqft located at 166 Bukit Merah Central and an estimated 10,000sqft at Block 114 Aljunied Avenue 2.
Other assets that are among the 18 earmarked for sale is a 7,000 plus sqft in Holland Drive and a 6,200s sqft unit in Bedok Reservoir Road. Also includes a 13,000 sqft corner shop at Blk 132 Jurong Gateway near Jurong East MRT station.
Regular review of portfolio
Mercatus’ spokesman said that it regularly reviews their portfolio to give greater impact and generate long term sustainable returns for their stakeholders.
It also said that they remain committed to safeguarding the interest of all stakeholders which includes all tenants and their customers.
In the past nine months, Mercatus has transacted its Singapore retail assets at slightly more than $3billion. In December 2022, Hong Kong listed Link Real Estate Investment trust went into a deal with Mercatus for the sale of Jurong Point and Swing By@ Thomson Plaza for $2.16billion.
Also in January 2023, they sold half stake in Nex Mall in Serangoon to Frasers Centrepoint and Frasers Property that valued the mall at at $2.08billion.
Market observers highlighted that the 18 assets are located in mature HDB estates with a high catchment of heartlanders shopping for daily necessities. These assets may appeal to investors who are keen in stable income with built in rental increments.
Credit to : business times