Croesus to buy retail mall in Japan for S$95.2m, proposes rights issue

Mainboard-listed Croesus Retail Trust has agreed to acquire Torius Property, a completed retail mall in Japan, for eight billion yen (S$95.2 million).

The purchase price is at a 3.7 per cent discount to the property’s valuation of 8.3 billion yen (S$98.8 million).

The property is a large-scale suburban retail mall in the satellite town of Hisayama-machi of Kasuya-gun, which is about 13 km from central Fukuoka City in Fukuoka Prefecture, on Japan’s Kyushu Island.

Comprising 36 single or double storey buildings, Torius Property occupies a land area of 257,173 square metres and has a net lettable area of 77,032 sqm.

It will be the eighth property in Croesus Retail Trust’s portfolio and marks its first foray into Kyushu Island.

The purchase will be funded by a combination of debt and equity financing. Four billion yen will come from new Japanese five-year bonds, while a rights issue is expected to raise another $69.7 million.

The rights issue comprise 114,222,677 new units based on 22 rights units for every 100 existing units at an issue price of 61 cents per rights unit.

Croesus said the pro forma net property income (NPI) yield for Torius Property is 7.8 per cent, compared to the actual NPI yield of 5.3 per cent for its existing portfolio, for its financial year ended June 30, 2015.

The pro forma distribution yield of the enlarged portfolio would increase to about 9.41 per cent compared to 9.4 per cent currently.