ALLGREEN Properties has bought The Seletar Mall from Cuscaden Peak Investments and United Engineers (UE) for S$550 million. 

The announcement on Thursday (Mar 7) confirms a report by The Business Times in January 2024 that Allgreen was in exclusive due diligence to buy the mall, which is located in the Sengkang West area. 

The agreed price translates to about S$2,900 per square foot net lettable area. The transaction was brokered by Cushman & Wakefield and JLL.

Following the sale of The Seletar Mall, another retail asset in the Cuscaden Peak Investments stable may soon go on the market.

BT understands that Paragon Reit, sponsored by Cuscaden Peak Investments, is expected to put The Rail Mall up for sale soon. The asking price is expected to be about S$80 million.

Located in Upper Bukit Timah Road, The Rail Mall is a single-storey strip mall with a range of retail and dining options. The property has a net lettable area of nearly 50,000 square feet and is on a site with 99-year leasehold tenure from March 1947, leaving a balance of 22 years.

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The Rail Mall was valued at S$62 million as at Dec 31, 2023, and generated net property income of S$5.2 million last year, according to information in Paragon Reit’s latest annual report. CBRE is understood to have been appointed to find a buyer for the property.

On the purchase of The Seletar Mall, Allgreen managing director Tho Leong Chye said the addition of the mall would diversify the group’s presence in the retail landscape as it moves into the heartlands. Allgreen’s upcoming Pasir Ris Mall is slated to open in the second quarter of 2024.

Cuscaden Peak Investments said the divestment of The Seletar Mall will allow it to recycle capital and enhance shareholder returns.

Formerly known as Singapore Press Holdings before its privatisation in May 2022, Cuscaden Peak Investments is a wholly owned subsidiary of Cuscaden Peak – a consortium made up of three shareholders: Hotel Properties Ltd, Mapletree Investments and CLA Real Estate Holdings.

Chua Chi Boon, executive vice-president of portfolio management at Cuscaden, said: “The suburban retail property market in Singapore has been a key beneficiary of a robust post-Covid-19 rebound, as strong demand from both tenants and shoppers underpins healthy positive rent reversions for well-located malls with attractive retail offerings, like The Seletar Mall.”

Roy Tan, group managing director of UE, said the timing of the divestment is “opportune”, and drew strong interest from prominent local and international real estate players attracted to the growth and resilience of Singapore’s suburban retail assets.

He said: “There continues to be high demand for the limited pool of good-quality properties within this segment, where the outlook remains positive.”

Located next to Fernvale LRT station, The Seletar Mall is on a site with a 99-year leasehold tenure from 2012, with a balance of about 87 years. It opened in November 2014.

FairPrice Finest, Shaw Theatres, Popular Bookstore and Harvey Norman are among the tenants at the mall. The property has a total net lettable area of about 190,000 sq ft on six levels, including two basement floors. 

In February, Paragon Reit said it declined an offer from its sponsor, Cuscaden Peak Investments, to buy The Seletar Mall for S$550 million.

The proposed terms set out in the offer would “not be in the best interests” of the real estate investment trust, and would be dilutive to its distribution per unit, Paragon Reit’s manager said.