At $65m, the 6 - spread across 5 estates - can be sold as bloc or singly
SIX heartland coffee shops in HDB blocks in Ang Mo Kio, Bedok, Tampines, Yishun and Bukit Batok are up for sale at around $65 million in total.
Each shop has seven to 13 food stalls in operation and seating capacity of between 200 and 370.
The $65 million guide price reflects a yield of about 5.7 per cent before tax, according to Savills Singapore, which is conducting an expressions of interest exercise for the sale.
The shops can be sold as a single portfolio or individually. Prices start from $4.8 million for a 297 sq m shop in Bedok North to $16 million for the largest, a 420 sq m shop in Bukit Batok.
Savills said net yields are expected to grow above 6 per cent, thanks to higher rents over the tenancy periods, which will run for another four to nine years.
They can provide very strong positive cash flows, said Mr Steven Ming, director of investment sales at Savills Singapore.
'Heartland eating establishments are extremely resilient trades. Even in a bad market, business is still as brisk as anyone could use a coffee fix for less than $1 anytime,' he added.
Expressions of interest sales are unusual for commercial HDB properties, but Mr Ming hopes to attract more than the usual niche investors for such properties and broaden the scope of the market.
Coffee shops are good investment properties, giving good rentals if they are well located, said Mr Tan Hong Boon, deputy managing director of Credo Real Estate Singapore.
PropNex chief executive Mohamed Ismail added that the availability of six localities will appeal to buyers who want to establish a chain or increase an existing portfolio.
But he said buyers might not want all six shops. It will depend on other factors, especially the traffic flow.
Mr Ming said the seller is a local businessman and investor who has owned the properties for periods ranging from three to 10 years.
The expressions of interest exercise will close at 3pm on July 21.
Source: Straits Times, 29 Jul 2010