CapitaLand Group
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CapitaLand Group
With a solid business ecosystem, we deliver long-term sustainable value to our stakeholders.
05 Feb 2025
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CLMT’s continues to grow its presence in Johor, a significant manufacturing hub, with its second acquisition of three industrial properties.
Kuala Lumpur, 5 February 2025 – CapitaLand Malaysia Trust (CLMT) has signed an agreement to acquire three freehold industrial properties from Rainbow Entity Sdn. Bhd., a subsidiary of Gromutual Berhad which is listed on Bursa Malaysia, for RM72.0 million. The properties are located within Senai Airport City (SAC), a modern industrial and manufacturing hub in the Senai region within the Johor-Singapore Special Economic Zone (Johor-Singapore SEZ). The purchase consideration is at a discount to the independent market valuation1 of RM72.5 million commissioned by MTrustee Berhad (the Trustee for CLMT).
The construction of the properties is scheduled to be completed in the first quarter of 2025. CLMT will also enter into a long-term lease agreement of seven years with a tenant for one of the three properties. The lease comes with built-in rent escalations and is expected to provide income stability to CLMT’s portfolio. The tenant is listed on the Shanghai Stock Exchange STAR Market and is in the life sciences industry.
When the three properties are fully leased, the acquisition will contribute positively to CLMT’s income and is expected to be distribution per unit (DPU) accretive. The three properties are projected to generate an annual gross rent of RM5.1 million, with a first-year gross yield of approximately 7.1%.
Ms Yong Su-Lin, CEO of CapitaLand Malaysia REIT Management Sdn. Bhd. (CMRM), the manager of CLMT, said: “The acquisition of three freehold industrial properties in the Senai-Skudai region marks CLMT’s second foray into the industrial sector in Johor2, which is developing into a significant manufacturing hub. Over the last six months, we have observed robust leasing interest for industrial assets in Johor. The initial three industrial assets we acquired at Nusajaya Tech Park are fully leased and we are now in the final stages of securing a single tenant lease for one of the properties in our latest acquisition. By securing prime assets in strategic locations, we are well-positioned to capitalise on the growing demand from companies looking to establish industrial facilities in the newly announced Johor-Singapore SEZ.”
“This acquisition is a continuation of our value creation efforts to rejuvenate CLMT’s portfolio with good quality assets that have long-term growth potential as well as provide income stability and diversification. With our healthy balance sheet, we will continue to actively seek strategic acquisition opportunities that will complement our existing portfolio while maintaining financial discipline,” added Ms Yong.
Ms Yong Su-Lin, CEO of CapitaLand Malaysia REIT Management Sdn. Bhd. (CMRM), the manager of CLMT
Strategic location in Johor’s growing high-technology manufacturing sector
With a collective built-up area of 183,785 square feet (sq ft), the properties consist of three single-storey detached factories, each annexed with a two-storey office block. The properties are located within the SAC, a prominent integrated industrial development that supports Johor’s rapidly growing high-technology manufacturing ecosystem.
The SAC serves a diverse range of industries, including electronics, aerospace, precision engineering, automotive and consumer goods. It is also home to multinational corporations and leading local companies operating high-tech manufacturing facilities, research and development centres, and regional distribution hubs.
The properties benefit from excellent connectivity via major highways, including the North-South Expressway. Additionally, the SAC enjoys strategic access to key logistics infrastructure such as Johor Port, Port of Tanjung Pelepas and Senai International Airport, enabling efficient transport via land, sea and air transport to major cities worldwide.
Expands CLMT’s industrial and logistics portfolio to nine properties
The acquisition of these three high-quality properties will further expand CLMT’s industrial and logistics portfolio and contribute to long-term income stability and diversification, in line with its strategic objective to strengthen its market position in this high-growth sector.
Since 2024, CLMT has announced investments of about RM280 million3 in industrial and logistics assets. Post-transactions, CLMT’s enlarged portfolio will comprise 15 properties, with the proportion of industrial and logistics properties increasing from 10% to 18% of the total portfolio’s net lettable area, amounting to approximately 4.7 million sq ft. Its industrial and logistics assets under management will increase from 2.8% to 7.9%.
Financing of the acquisition
CLMT plans to finance the acquisition through existing debt facilities. Following the transaction, CLMT's proforma gearing will increase from 41.3% to 44.4%4, which remains below the regulatory limit of 50%. The acquisition is expected to be completed in 2H 2025, contingent upon the fulfilment of conditions precedent.
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Notes
[1] The independent valuation conducted by Nawawi Tie Leung Property Consultants Sdn. Bhd. indicated that the market value of the property is RM72.5 million as at 23 January 2025.
[2] In February 2024, CLMT announced the acquisition of three freehold industrial factories in Nusajaya Tech Park, Johor for RM27.0 million which is expected to be completed in 2H 2025.
[3] In December 2024, CLMT also entered into a sale and leaseback agreement to acquire a freehold modern automated logistics property located in Selangor, for RM180.0 million. Currently under construction, the acquisition of the automated warehouse is expected to be completed in 2H 2025.
[4] The proforma gearing of 44.4% assumes that CLMT will fund the acquisitions of industrial and logistics properties in Nusajaya Tech Park, Selangor and Senai by debt.
