SingPost puts 10 HDB shophouses up for sale, with aim of leaseback

Assets worth more than initial purchase prices; move also allows firm to raise capital

- Sue-Ann Tan

Singapore Post has put up for sale 10 Housing Board shophouses currently occupied by its post office outlets across the island, with the aim of leasing them back.

A spokesperson said in response to queries from The Straits Times: "SingPost is initiating the divestment of 10 HDB shophouses across Singapore, in keeping with the group's plan to divest non-core assets.

"Plans are for a sale and lease-back model to maintain current post office services."

In a sale and leaseback model, an asset is sold to someone else, but then leased back to the initial owner for a certain duration.

This occurs especially when the asset can be sold at a higher value than its initial purchase price. It can also allow the seller to raise capital from the proceeds of the sale, without interrupting its business operations.

SingPost said in May that its strategic review and restructuring are ongoing.

Its group chief financial officer Isaac Mah told the media at a briefing then that the company is engaging the Government to develop a more sustainable operating model, as the post office network is not profitable.