CLMT divests office property in Petaling Jaya for RM52.0 million
- Divestment is at 4.0% premium to latest independent valuation
- In line with ongoing portfolio reconstitution strategy to recycle capital into higher-yielding investment opportunities
Kuala Lumpur, 5 September 2023 – CapitaLand Malaysia REIT Management Sdn. Bhd. (“CMRM”), the manager (the “Manager”) of CapitaLand Malaysia Trust (“CLMT”), is pleased to announce that MTrustee Berhad, the Trustee of CLMT (the “Trustee”), has entered into a sale and purchase agreement today for the sale of 3 Damansara Office Tower (the “Property”) to Lagenda Harta Sdn. Bhd., a wholly owned subsidiary of Lagenda Properties Berhad, for a sale consideration of RM52.0 million (the “Proposed Divestment”).
The Property is part of the 3 Damansara Property integrated development that was acquired by CLMT in 2015. The sale consideration of RM52.0 million represents a 4.0% premium to the Property’s latest independent valuation1 of RM50.0 million as at 31 July 2023. The Proposed Divestment is not expected to have any material impact on CLMT’s net asset value and distribution per unit for the financial year ending 31 December 2023.
The net proceeds after divestment costs are approximately RM50.5 million and will be used to repay existing borrowings. If the net proceeds were used to repay CLMT’s borrowings as at 30 June 2023, CLMT’s gearing ratio will be reduced from 44.1% to approximately 43.5%.
Mr Tan Choon Siang, CEO of CMRM, said: “CLMT’s maiden divestment is in line with our ongoing portfolio reconstitution strategy and we have decided to monetise this non-core office asset to improve the quality of our portfolio. The proceeds from this divestment will provide us with financial flexibility to enhance our portfolio diversification efforts and pursue higher yielding opportunities in the new economy sectors. The Proposed Divestment is expected to be DPU-accretive and strengthen CLMT’s balance sheet. We will continue to actively review our portfolio to deliver greater income stability and optimise returns for Unitholders.”
The Proposed Divestment is expected to complete by 1Q 2024. Upon completion, CLMT will own eight properties in Malaysia, comprising six retail and two logistics properties strategically located across three key urban centres in Penang, Klang Valley and Pahang.
About the “Property”
The 3 Damansara Office Tower is part of the integrated development of 3 Damansara Property, which includes a 4-storey shopping mall together with its car park known as 3 Damansara. Located in Petaling Jaya, the Property is a freehold, stratified asset with a total net lettable area of over 101,000 sq ft.