Recently, a large HDB shophouse in Bedok North Street 1, Block 215, was listed for sale by tender with an indicative price of SGD 24 million. The unit, located on the second floor, boasts a strata area of 16,178 square feet. At the indicative price, this translates to approximately SGD 1,483 per square foot.
The unit is available for purchase by both corporations and foreigners, with no additional buyer’s stamp duty (ABSD) or seller’s stamp duty (SSD) required, providing tax benefits for potential buyers.
Such a large shophouse in a mature residential area is rare, and the demand from tenants is strong. The notice indicated that, subject to approval from relevant authorities, the unit could be subdivided into smaller units to be leased out to tenants such as childcare centers or gyms to better meet market demands. Currently, the unit is leased to Singapore Pools, offering investors a stable source of income.
If sold at the indicative price of SGD 24 million, the buyer can expect an initial net yield of close to 5%, which is above the market average. Over the past 12 months, the net yield of most HDB shophouse transactions has been around 4.5%, indicating a relatively high return on investment for this unit.
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Typically, HDB shophouses are sold for between SGD 4 million and SGD 8 million. Although the Bedok North unit is larger, its hefty price tag of SGD 24 million might deter some potential buyers. In the current market environment, there are few buyers capable of affording this amount, with food court operators being the most likely candidates.
To make this investment attractive, buyers would need to secure at least SGD 1 million in annual rental returns. However, there are not many tenants who can afford such high rents. While the current tenant is Singapore Pools, it remains uncertain whether they would be willing to renew the lease at such high rates. Furthermore, despite the unit's prime location, it is situated in an area with relatively low foot traffic within Bedok Central, and the second floor's natural foot traffic is also limited, which are factors investors need to carefully consider.
HDB shophouses are generally seen as defensive assets with good rental yields due to their limited supply and primary service to neighborhood residents. Supported by stable market demand, these properties typically offer investors long-term stable income.
Interested buyers must submit their expressions of interest by noon on July 10. The sale has attracted considerable attention, and the market is keenly interested in this large HDB shophouse.
Notably, DBS Group sold 36 HDB shophouses and 10 private strata-titled retail units for a total of SGD 210 million last month, reflecting the strong demand for such properties. Last year, NTUC FairPrice's cooperative arm, Mercatus Co-operative, also listed 18 commercial real estate projects in neighborhood HDB areas for sale with an estimated total price of SGD 265 million.
These large transactions highlight the vibrancy and appeal of Singapore’s HDB shophouse market. For investors seeking long-term stable returns, the Bedok North shophouse offers a unique and attractive investment opportunity.
