DBS accepts offers for 19 HDB shophouse and shop units

Citi Commercial Pte Ltd

DBS has accepted offers from prospective buyers for 19 of the 46 shophouse and retail units – formerly occupied by its  full-service branches – which were put up for sale in April.

The Business Times understands that the 19 units comprise shophouse and shop units in HDB estates. The units are in Tanjong Pagar, Clementi, Bukit Panjang, Jurong West Street 92, Marine Parade Central, Pasir Ris, New Upper Changi Road, Holland Drive, Ang Mo Kio Avenues 4 and 8, and Hougang Streets 21 and 61.

None of the 10 private strata retail units in the portfolio of 46 units has been sold so far, BT understands. These are in Thomson Plaza, 6 Raffles Quay, The Centrepoint in Orchard Road, and Gleneagles Medical Centre in Napier Road.

A DBS spokesperson told BT this week that the offers received for the 19 units were mostly from those looking to invest or from existing tenants of the units.

Collectively, the offers the bank accepted for the 19 units, “came in above the guide prices”, she added.

BT reported in April that the 46 units in 29 locations previously served as full-service bank branches some years ago, and have a total space of about 69,500 square feet (sq ft). The 46 units were made available for sale individually; their total guide price is about S$210 million.

The spokesperson had said then that the sale of the 46 units was being undertaken as they are “non-strategic properties, and property management is not core to the bank’s business”. “Many of these units came into our possession following DBS’ acquisition of POSB in 1998, resulting in duplicate branches in close proximity, and form a subset of our broader property portfolio.”

Of the 29 locations, 16 are partially being used by the bank for its 24/7 self-service branches (that is, without counter services) and ATMs. The space that the bank uses in these 16 locations accounts for just over 10 per cent of the total space being put up for sale.

“Our operations in these locations will not be impacted, as we will lease back all the space which we currently occupy, so there will be no reduction in our branch or ATM footprint,” the spokesperson had said previously.

The remainder, or nearly 90 per cent of the space that DBS has put up for sale, is either being leased out – with some of this having been tenanted for the past 10 to 20 years – or vacant.

High rental yield

BT understands that one of the most sought-after units among the 19 units is a shophouse in Block 260 Bangkit Road in Bukit Panjang. At its guide price of nearly S$4.7 million, it is said to have a gross rental yield of about 7 per cent, the highest in the portfolio. The unit has a balance tenure of about 65 years. The offer that DBS accepted is likely to have crossed S$10 million, based on market talk.

A pair of ground-floor shop units in Block 442 Pasir Ris Drive 6, also with 65 years’ balance tenure, are also said to have fetched substantially more than their S$5.3 million combined guide price. The units are leased to ValueHub Department Store.

Word on the street is that a shophouse in Ang Mo Kio Avenue 8, near Ang Mo Kio MRT station and bus interchange, is being sold substantially above its guide price of S$5.2 million.

Other units for which DBS is said to have accepted offers include four ground-floor adjoining shop units at 1 Tanjong Pagar Plaza. DBS’ guide price was about S$11.8 million. The units have about 51 years’ balance tenure.

Also being sold is a 5,554 sq ft unit in Block 210 New Upper Changi Road. This property, with a balance tenure of around 54 years, is a stone’s throw from Bedok MRT station and next to the Sky Eden@Bedok project. The guide price was S$10.4 million.

DBS is also said to have accepted an offer for a pair of fully-occupied shophouses in Block 450 Clementi Avenue 3, next to Clementi MRT station. The units, with a balance tenure of 54 years, had a combined guide price of S$8.7 million.

Also being sold are a pair of shophouses in Marine Parade Central, which had a guide price of S$10.7 million. Their balance lease tenure is 51 years.

Summing up, an industry observer said: “Most of the choice units in HDB estates – with a high rental yield or in good locations such as near MRT stations – have been awarded. Potential buyers, if given the opportunity to cherry-pick from a spread of 46 units, will choose the better units first.”

DBS appointed CBRE, Cushman & Wakefield, JLL, Knight Frank and Triple One Properties to market the units.

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