CapitaLand sells stake in CapitaMall Wuhu
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CapitaLand Retail China Trust (CRCT) and CapitaLand will divest their combined 100 per cent interests in CapitaMall Wuhu to an unrelated third party.
Located in Wuhu city in China’s Anhui Province, CapitaMall Wuhu is a five-storey shopping mall of around 45,000sqm that has been closed since the third quarter of last year, following the exit of its anchor tenant.
“The divestment of CapitaMall Wuhu is in line with our proactive asset-management strategy to optimise CRCT’s portfolio and enhance returns,” said CRCT Management Ltd CEO Tan Tze Wooi.
“As our 51-per-cent stake in CapitaMall Wuhu accounts for less than 1 per cent of CRCT’s asset size, its sale is expected to have minimal impact on CRCT’s core business. The sale proceeds will provide CRCT with greater financial flexibility to take advantage of market opportunities. We remain on the lookout for strategic opportunities to reconstitute and strengthen our portfolio.”
The transaction between the firms’ respective subsidiary and associate is based on the company’s adjusted net asset value – including (but not limited to) its interest in CapitaMall Wuhu of RMB210 million (US$31.25 million).
After taking into account the estimated fees, taxes and other related expenses, it is estimated that the net proceeds from the divestment would be RMB90.6 million ($13.48 million). The net divestment proceeds may be used for reducing existing debt and/or financing general corporate or working capital requirements.
CapitaLand Group’s president Lucas Loh commented: “The sale of CapitaMall Wuhu will unlock capital that can be redeployed to core assets in cities where CapitaLand enjoys scale and competitive advantage. We will stay disciplined in our capital-recycling efforts and continually review opportunities to optimise CapitaLand’s portfolio, which includes divestment of assets that are non-core or have limited growth.”
The divestment of CapitaMall Wuhu is expected to be completed in the second half of this year.
Following the divestment, CRCT’s portfolio will have 10 malls in seven Chinese cities, while CapitaLand’s retail network in China will comprise 51 malls in 21 cities.
Questions & Answers
Q.Why is CapitaMall Wuhu being divested?
Why is CapitaMall Wuhu being divested?
The divestment aligns with the company's proactive asset-management strategy to optimise its portfolio and enhance returns. The mall has been closed since the third quarter of last year after its anchor tenant exited.
Q.What impact will this sale have on CRCT's core business?
What impact will this sale have on CRCT's core business?
The sale is expected to have minimal impact because CRCT's 51% stake in CapitaMall Wuhu accounts for less than 1% of its asset size. The proceeds offer financial flexibility.
Q.How much are the net proceeds expected to be from the divestment?
How much are the net proceeds expected to be from the divestment?
After accounting for estimated fees, taxes, and other related expenses, the net proceeds from the divestment are estimated to be RMB90.6 million ($13.48 million).
Q.What will CRCT's portfolio look like after the divestment is completed?
What will CRCT's portfolio look like after the divestment is completed?
Following the divestment, CRCT's portfolio will consist of 10 malls located across seven different cities in China. This is part of optimising the portfolio.
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