CMMT signs conditional agreement to acquire Tropicana City Mall and Tropicana City Office Tower in Petaling Jaya
Proposed acquisition will further strengthen income and geographical diversification of CMMT portfolio
Kuala Lumpur, 26 January 2015 – CapitaMalls Malaysia REIT Management Sdn. Bhd. (“CMRM”), the manager of CapitaMalls Malaysia Trust (“CMMT”), is pleased to announce today that AmTrustee Berhad, the trustee of CMMT, has entered into a conditional sale and purchase agreement on CMMT’s behalf with Tropicana City Sdn. Bhd., to acquire Tropicana City Mall and Tropicana City Office Tower in Petaling Jaya, Selangor for RM540 million. Including the acquisition fee and expenses, the total acquisition cost is about RM565 million.
Tropicana City Mall is a four-storey shopping mall with a net lettable area (“NLA”) of more than 448,000 square feet (“sq ft”) and 1,759 car park bays spread over four levels (lower ground and three basement levels). Opened in December 2008, Tropicana City Mall is now an established neighbourhood mall catering to the day-to-day shopping needs of its mature residential catchment. It currently enjoys an occupancy rate of about 89.2%1 , with an established mix of Malaysian and international retailers including AEON BIG, Golden Screen Cinemas, Jatomi Fitness and UNIQLO.
Tropicana City Office Tower has an NLA of more than 101,000 sq ft and currently enjoys full occupancy1. Its anchor tenants include the Tropicana Group, CIMB Securities and radio broadcaster Star RFM.
With a population of more than 600,000 people, Petaling Jaya is the largest city in the state of Selangor and is half an hour’s drive from Kuala Lumpur. Tropicana City Mall is strategically located at the intersection of two major highways – the SPRINT and Lebuhraya Damansara Puchong Highways – making it easily accessible from Kuala Lumpur and various parts of Petaling Jaya. In terms of public transportation, the mall is served by feeder buses from the nearby Kelana Jaya and Taman Bahagia light rail transit (“LRT”) stations. Come July 2017, a mass rapid transit (“MRT”) station at Taman Tun Dr Ismail is expected to commence operations.
In addition to the immediate catchment of residents at The Tropics2 and surrounding residential developments as well as office workers at Tropicana City Office Tower and other office towers, Tropicana City Mall also enjoys shopper traffic from the established and affluent residential neighbourhoods of Section 17, SS2, Damansara Jaya, Damansara Utama, Taman Tun Dr Ismail, Sri Hartamas, Mont Kiara, Bukit Damansara and Bangsar. It is also in close proximity to the established office clusters of Damansara Intan, Phileo Damansara and Damansara Uptown, which is home to the corporate offices of several multinational companies and major local and foreign banks.
The proposed acquisition of Tropicana City Mall and Tropicana City Office Tower is subject to the satisfactory completion of due diligence, which includes a building audit and valuation exercise. The completion of the sale and purchase is further subject to fulfillment of various conditions precedent in the agreement signed. CMRM intends to fund the proposed acquisition through debt and/or equity fund raising in such combination to be determined later, and will make the relevant announcements in the event equity fund raising is involved. The proposed acquisition is therefore expected to be completed by the third quarter of 2015.
Mr David Wong Chin Huat, Chairman of CMRM, said, “The proposed acquisition of Tropicana City Mall and Tropicana City Office Tower will further increase CMMT’s market presence in the Klang Valley. We already have an established mall, Sungei Wang Plaza3, located in the heart of Kuala Lumpur. In the south of Kuala Lumpur, we have The Mines which targets the suburban population and holiday makers. Tropicana City Mall is a relatively new mall located to the west of Kuala Lumpur targeting the rising middle and upper-middle income population. This proposed acquisition will thus further expand CMMT’s portfolio in terms of both income and geographical spread, and enable CMMT to continue to deliver stable returns to our unitholders.”
Ms Low Peck Chen, CEO of CMRM, said, “The proposed acquisition of Tropicana City Mall will strengthen CMMT’s portfolio as it is an established family lifestyle mall that has proven to be a popular destination among the surrounding residents, thanks to its variety of local and international retailers. The Tropicana City Office Tower provides a captive catchment of shoppers for the mall.”
“We see opportunities for potential improvement in trade mix and rental income going forward. With our proven track record in proactive asset and retail management, we are confident that we can further maximise the potential of the asset and extract value for our unitholders.”
Summary of Tropicana City Mall and Tropicana City Office Tower
-insert table here-
1As at 15 January 2015. 2The 601-units residential towers as part of the Tropicana City integrated development. 3CMMT owns a majority interest in Sungei Wang Plaza.