CLMT to acquire Queensbay Mall in Penang for RM990.50 million, expanding its presence in northern Malaysia
- Acquisition of a strategically located shopping mall with high-quality tenants
- Addition of a resilient asset to CLMT’s portfolio at a reasonable entry valuation
- Yield accretive transaction that will deliver higher distribution per unit for unitholders
Kuala Lumpur, 9 November 2022 – CapitaLand Malaysia REIT Management Sdn. Bhd. (CMRM), the manager of CapitaLand Malaysia Trust (CLMT), is pleased to announce today that MTrustee Berhad, the Trustee of CLMT, has entered into agreements to acquire 91.8% of the total strata floor area of retail parcels in Queensbay Mall (QBM Property) from parties related to CapitaLand Investment Limited (CLI or Sponsor) for RM990.50 million (Total Purchase Consideration).
The Total Purchase Consideration of RM990.50 million, negotiated on a willing-buyer willing-seller basis, represented a discount of approximately 1.0% to the independent valuation[1] of RM1.0 billion commissioned by the Trustee.
To finance the acquisition, the Manager proposes to undertake a private placement, which entails the issuance of new CLMT units to raise gross proceeds of up to 50% of the Total Purchase Consideration. The issue price of the proposed private placement will be determined later by way of a bookbuilding process.
In support of CLMT, the Sponsor is committed to support the proposed private placement and intends to take up its pro-rata entitlement included as part of the funding for CLMT to acquire QBM Property. As at 3 November 2022, CLI had a deemed interest of approximately 39.3% in CLMT.
Taking into account the acquisition fees and expenses, the total acquisition cost is approximately RM1.03 billion and will be funded by a combination of bank borrowings and proceeds from the proposed private placement. The acquisition, which is conditional upon the approval of CLMT’s non-interested unitholders at an extraordinary general meeting to be convened at a later date, is expected to be completed by 1Q 2023.
Queensbay Mall is a free-standing 8-storey shopping centre with a lower ground floor and a lower ground mezzanine comprising five floors of retail space and car parks. The property is located at No. 100, Persiaran Bayan Indah, 11900 Bayan Lepas, Pulau Pinang. It is one of the largest malls in Penang, and is strategically located at Bayan Lepas along the south-eastern shorefront of the Penang island with transport links and proximity to the Penang Bridge and the Bayan Lepas industrial hub in Penang’s Free Trade Zone. Queensbay Mall is accessible from the north and the south of the Penang island via the Tun Dr Lim Chong Eu Highway.
With a net lettable area of 883,111 square feet (sq ft) and a committed occupancy of 95%[2] as at 7 October 2022, Queensbay Mall has a diverse mix of tenants from different trades, including entertainment, lifestyle, fashion and dining, segregated on thematic basis throughout the floors of the shopping complex.
Mr Lui Chong Chee, Chairman of CMRM, said: “As Malaysia emerges from the pandemic, this is an opportune time for CLMT to expand its portfolio of shopping malls and ride on the recovery of the country’s retail sector. The proposed acquisition of Queensbay Mall will deepen CLMT’s presence in Penang, thus strengthening its foothold in the northern region of Malaysia, where it already owns Gurney Plaza and is targeting to complete the acquisition of its first logistics property[3]. With a more diversified and resilient portfolio after adding Queensbay Mall and the logistics property, CLMT will be in a stronger position to deliver long-term value to its unitholders.”
Mr Tan Choon Siang, CEO of CMRM, said: “We are pleased to announce the acquisition of Queensbay Mall, one of the largest shopping malls in Penang, with a high committed occupancy and a wide-ranging list of high-quality tenants. The mall currently receives an average of 1.1 million shoppers every month and shopper traffic is expected to improve further with the return of tourists to Penang.”
“The proposed acquisition, our largest since listing, will add meaningful scale to CLMT and reflects our continuing efforts to enhance CLMT’s portfolio resilience and income diversification. Post-acquisition of Queensbay Mall and the logistics property in Sungai Jawi, Penang[3], CLMT will have seven properties in its enlarged portfolio, with an uplift of 28.2% in assets under management to RM4.9 billion and an increase of 39.7% in net lettable area to approximately 4.3 million sq ft. Queensbay Mall’s property yield of approximately 7.3%[4] is reasonable and will increase the overall property yield of CLMT’s portfolio. The proposed acquisition will contribute positively to CLMT’s earnings and is expected to be yield accretive upon completion.”
Summary of Queensbay Mall
Location |
No. 100, Persiaran Bayan Indah, 11900 Bayan Lepas, Pulau Pinang |
Description of titles |
|
Tenure |
Freehold for all 438 strata titles within Queensbay Mall (which are the subject matter of the Proposed Acquisition) |
Year of commencement |
December 2006 |
Gross strata area |
Total of 1,282,681 sq ft as at 7 October 2022 comprising:
|
Net lettable area |
883,111 sq ft as at 7 October 2022 |
Occupancy rate |
95% as at 7 October 2022 (inclusive of committed tenancies) |
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1. The independent valuation by Savills (Malaysia) Sdn. Bhd. indicated the market value of QBM Property at RM1.0 billion as at 7 October 2022.
2. Inclusive of committed tenancies.
3. CLMT targets to complete its acquisition of the logistics property in Sungai Jawi, Penang, in 4Q 2022.
4. Based on the annualised net property income of Special Coral Sdn. Bhd. for the unaudited 8-months financial period ended 31 August 2022 after excluding non-recurring write-backs of provision of doubtful debts. Special Coral Sdn. Bhd. is a special purpose vehicle that holds 433 strata titles of the total 438 strata titles within Queensbay Mall that CLMT is acquiring. The remaining 5 strata titles are held by indirect subsidiaries of CLI.