http://www.straitstimes.com/archive/...pines-20150108

Sheng Siong buys HDB complex in Tampines

Published on Jan 8, 2015 1:39 AM

By Janice Heng


SUPERMARKET chain Sheng Siong has bought a three-storey Housing Board commercial property in Tampines Central for $65 million, and will open a supermarket on the second floor.

Business is expected to begin by the end of this month, according to a Sheng Siong announcement on the Singapore Exchange last week. The second-floor space at Block 506 Tampines Central 1 used to house a Giant supermarket.

The new store will be Sheng Siong's first in Tampines, adding to its stable of 34 in Singapore. It will have a gross floor area of about 9,800 sq ft.

But as other leases in the building expire next year and in 2017, the supermarket will be enlarged gradually, Sheng Siong said last June when it received the option to purchase the property.

The 3,876 sq m (41,720 sq ft) property has 75 years left on its lease. The $65 million purchase price works out to $1,558 per sq ft, which experts said was reasonable, given the location and relative rarity of the property. "There are not many properties of this type on the market, so I believe this is a fair price," said ERA Realty key executive officer Eugene Lim. "And it's Tampines Central, so you can't go wrong. The traffic is pretty good."

Block 506 is near Tampines MRT station.

With the HDB having largely stopped its sale of such properties, it is hard to get ownership of HDB commercial space now, noted Savills Singapore head of research Alan Cheong. "You can hardly get anything for $1,600 per sq ft now," he said. "I think Sheng Siong made a good call."

In any case, the purchase seems more of a business decision by Sheng Siong to facilitate its supermarket expansion, noted Chris International director Chris Koh. "It's really more about Sheng Siong having this good location rather than being a landlord."

Last week, in the light of the property acquisition, OCBC Research reiterated its buy call on Sheng Siong with a fair value estimate of 77 cents. Sheng Siong Group closed unchanged at 69.5 cents yesterday.

Block 506 was sold by S-11 Wan Jin Investment, a subsidiary of coffee shop chain S-11 F&B Holdings. It was known as S-11 Court, and an S-11 food court used to operate on the ground floor but it closed down a while ago. Existing tenants include food outlets, dental and medical clinics, and enrichment centres.

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