Hiap Hoe to sell 39 shop units

MAINBOARD-LISTED Hiap Hoe plans to sell 39 shop units, most of which are strata-titled units in Parklane Shopping Mall, in line with its plan to divest non-core assets even as it capitalises on healthy investor demand for retail space.

The property developer has hired consultancy firm JLL, which on Tuesday launched an expression-of-interest (EOI) exercise to sell the shops.

Of the 39 units, 33 - all in the basement of Parklane Shopping Mall in Selegie Road - are being offered in a single portfolio to a single buyer, said JLL.

Hiap Hoe is expecting offers of around S$55.6 million for this single portfolio, which takes up a combined strata floor area of 25,317 sq ft - more than 94 per cent of the total strata floor area in the basement.

Based on the indicative price, this works out a passing yield of 3.5 per cent and even beyond 4 per cent a year on the back of an anticipated rise in rents, said JLL's head of investments and the residential segment Karamjit Singh.

It also works out to an average of S$2,200 per sq ft, which compares fairly to the S$2,192 psf price transacted last year for one of four units in the basement of the mall that does not belong to Hiap Hoe.

The units are fully occupied. Most of the tenants are in businesses catering to the young, such as gaming and entertainment centres, a dance studio and a retailer of musical instruments; the largest unit has been leased to McDonald's, which pulls in a regular crowd.

Mr Singh said: "Opportunities to acquire a large cluster of shops on this scale within a single level are few and far between. This offering poses an attractive play to investors as it offers an almost-exclusive use of the basement, which has scope for repositioning and improving the tenant eco-system, such as by introducing a crowd-pulling anchor.

"Some investors may also find it attractive to acquire the units in bulk to sell down the units individually later."

Interested parties have until Nov 4 to submit their offers for this portfolio of 33 shops.

The remaining six retail shop units are two units on level four of the same mall, three shop units in Bukit Timah Plaza and one in Balestier Point. The EOI for these units closes on Oct 29.