CapitaLand Mall Trust divests Sembawang Shopping Centre for S$248.0 million
In this article (5)
CapitaLand Mall Trust Management Limited (CMTML), the manager of CapitaLand Mall Trust (CMT), announced today that CMT, through its trustee HSBC Institutional Trust Services (Singapore) Limited, has entered into an agreement to sell Sembawang Shopping Centre to a joint venture between Lian Beng Group Ltd and Apricot Capital Pte. Ltd. for S$248.0 million.
Based on the latest independent valuation, Sembawang Shopping Centre was valued at S$126.0 million as at 31 December 2017. The divestment is expected to generate net proceeds of about S$245.6 million and a net gain of about S$119.6 million when the transaction is completed by June 2018.
Mr Tony Tan, CEO of CMTML, said: “The divestment of Sembawang Shopping Centre is in line with our portfolio management strategy of maximising returns for our unitholders. By unlocking the value of Sembawang Shopping Centre at this stage, it will realise the optimal value for CMT’s unitholders. As the mall accounts for only about 1% of CMT’s total asset value, its sale will have minimal impact on CMT’s financial performance and distribution per unit. The net proceeds from the divestment will further enhance and strengthen CMT’s financial flexibility.”
Upon completion of this transaction, CMT’s portfolio will comprise 15 properties located in suburban areas and downtown core of Singapore. They are Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, JCube, Raffles City Singapore, Lot One Shoppers’ Mall, Bukit Panjang Plaza, The Atrium@Orchard, Clarke Quay, Bugis+, Westgate and Bedok Mall.
Located along Sembawang Road, Sembawang Shopping Centre reopened to shoppers in 2008 following CMT’s acquisition in 2005. It comprises four levels of retail space – three levels above ground and one basement level – with a net lettable area of 143,631 square feet. The mall registered a committed occupancy of 99.4% as at 31 December 2017. Its major tenants include Giant, Yamaha Music School, Food Junction and Daiso Japan.
Questions & Answers
Q.Why is CapitaLand Mall Trust divesting Sembawang Shopping Centre, given its high occupancy?
Why is CapitaLand Mall Trust divesting Sembawang Shopping Centre, given its high occupancy?
The divestment is part of CapitaLand Mall Trust's portfolio management strategy to maximise returns for unitholders. Selling the mall at this stage unlocks its optimal value for them.
Q.What is the expected financial benefit of this divestment for CapitaLand Mall Trust?
What is the expected financial benefit of this divestment for CapitaLand Mall Trust?
The transaction is expected to generate net proceeds of about S$245.6 million and a net gain of about S$119.6 million. These proceeds will enhance the company's financial flexibility.
Q.How significant is Sembawang Shopping Centre to CapitaLand Mall Trust's overall portfolio?
How significant is Sembawang Shopping Centre to CapitaLand Mall Trust's overall portfolio?
Sembawang Shopping Centre accounts for only about 1% of CapitaLand Mall Trust’s total asset value. Its sale is therefore expected to have minimal impact on CMT’s financial performance and distribution per unit.
Q.How does the sale price compare to the centre's most recent valuation?
How does the sale price compare to the centre's most recent valuation?
The shopping centre is being sold for S$248.0 million. This is significantly higher than its independent valuation of S$126.0 million recorded as at 31 December 2017.