DFI puts its last 2 Singapore properties up for sale at S$48.5 million

DFI Retail Group has put its last two Singapore properties on the market – eight freehold strata retail units at Siglap V, and an HDB retail unit in the Toa Payoh Central area.

The total guide price for the two assets is S$48.5 million, though potential buyers can make offers for one or both properties. JLL has been appointed the exclusive marketing agent to conduct an expression of interest (EOI) exercise for the properties.

The eight adjoining freehold retail units at Siglap V have a guide price of S$32 million, which works out to S$3,012 per square foot (psf) based on the total strata area of 10,624 sq ft.

The units are on the ground floor of the four-storey mixed-use project with an attic level, at the corner of Siglap and East Coast roads. Seven units are occupied by DFI’s CS Fresh supermarket brand, and the remaining unit by the group’s Guardian health-and-beauty brand.

A DFI spokesperson said: “To further concentrate on our expertise in operating high-quality supermarkets, we have decided to divest the Siglap V space. We’ll operate on a leaseback arrangement, allowing CS Fresh and Guardian to continue serving our loyal customers in the area.”

Siglap V comprises 16 retail units on the ground level and 114 private apartments above. There are also two basement carpark levels. The development was completed by DB2 Realty about 10 years ago.

The guide price for DFI’s ground-floor HDB retail unit at Block 181 Lorong 4 Toa Payoh is S$16.5 million, reflecting S$1,696 psf on an area of 9,731 sq ft. The property has 78-year tenure from Oct 1, 1992, leaving a balance of about 46.5 years.

The property enjoys high visibility from the main arterial roads of Lorong 4 Toa Payoh and Toa Payoh Central. It is near Toa Payoh MRT station.

The unit is currently occupied by a Giant supermarket but will be offered for sale on a vacant possession basis. DFI plans to close the supermarket by the end of this year, subject to the successful sale of the unit.

“By selling this store, we can strategically reallocate our resources to better focus on operating other stores, enhancing our overall customer experience,” said the DFI spokesperson.

She added that “as part of our commitment to our dedicated team members”, staff at the outlet will be redeployed to other Giant stores or other businesses within DFI Retail Group.

Giant – DFI’s mass-market retail brand – has a strong presence in Singapore, with a total of 53 stores, she added. These comprise five hypermarkets, 25 supermarkets (including the one operating in the Toa Payoh HDB retail unit which has been put up for sale) and 23 express stores.

JLL Singapore’s senior director of capital markets, Terry Wong, said: “Both properties will appeal to investors, given their locations within respective well-established residential enclaves with high footfall.”

“Large retail units with such highly visible street frontage are rarely available for sale. Typically, they are tightly held for their resilience, with strong rental demand and ability to generate stable cashflow during both the peaks and troughs of economic cycles.”

Appeal to end-user buyers

The HDB unit in Toa Payoh may also appeal to end users.

“A sizeable retail unit, it has potential for further subdivision or conversion to alternative uses such as coffee shops, childcare centres, tuition centres and medical/dental clinics, subject to approval from the relevant authorities,” said Wong.

The unit is also directly next to the Toa Payoh Central car park, with a dedicated loading and unloading bay, allowing more possibilities to utilise the space.

Siglap V, in District 15, is in an area with an affluent shopper catchment from surrounding landed homes and low-rise condos.

“With the sale and leaseback arrangement in place for the Siglap V units – securing CS Fresh and Guardian as long-term blue-chip tenants – investors will be able to gain access to a freehold core retail offering with defensive income at a palatable quantum,” said Wong.

Retail expansion trail

The DFI spokesperson said that while the group is putting its last two Singapore properties on the market, it is “committed to growing its retail operations in Singapore across all our brands including CS Fresh, Cold Storage, Giant, 7-Eleven and Guardian”.

Since the start of 2024, DFI has already opened new CS Fresh supermarkets at Chancery Court and One Holland Village.

“In the upcoming months, we are looking at opening a Cold Storage supermarket at Pasir Ris Mall and a CS Fresh supermarket at 46 Kim Yam Road. Sometime in mid-2024, Giant will be opening a new supermarket in Tengah, serving the young residents in the up-and-coming estate,” the spokesperson added.

DFI, a member of the Jardine Matheson Group, has a secondary listing on the Singapore Exchange.

Prospective buyers may make offers for one or both DFI assets.

Those seeking to buy both assets will have a choice to either buy the assets directly or acquire the entire issued share capital of Jelita Property, the fully owned Singapore-incorporated vehicle of DFI which holds the two properties.

For both modes of acquisition, the sale of the eight Siglap V units will entail DFI entering into a long leaseback arrangement. This will comprise an initial five-year term, with options to renew for three subsequent terms of five years each, resulting in a maximum of up to 20 years.

The EOI exercise will close on May 23, 2024.

Last year, DFI sold the two-storey Jelita Shopping Centre for S$91.68 million. It entered into a long leaseback arrangement of up to 30 years for the mall’s ground level, which is fully occupied by a Cold Storage supermarket.

Other Singapore properties DFI has sold in recent years include a bundle of 14 properties, of which eight were leased back for the 7-Eleven brand, for which DFI holds the master franchisee licence in Singapore.

DFI has also divested 118 Aljunied Avenue 2 #01-100 and 306 Ubi Avenue 1 #01-185.