CapitaLand divests Bedok Mall to CapitaLand Mall Trust for S$783.1 million
Move is part of CapitaLand’s robust capital recycling strategy to realise development profit and deploy capital into higher yielding ventures
Singapore, 14 July 2015 – CapitaLand Limited is pleased to announce today that it has, through its wholly-owned subsidiaries, Brilliance Residential Pte. Ltd. and CMA Singapore Investments (3) Pte Ltd, entered into a sale and purchase agreement with HSBC Institutional Trust Services (Singapore) Limited, the trustee of CapitaLand Mall Trust (CMT), for the sale of the entire unitholding interest of Brilliance Mall Trust, which owns Bedok Mall. This divestment is based on an agreed value of Bedok Mall of S$780.0 million and other net assets of Brilliance Mall Trust of about S$3.1 million.
At the last valuation commissioned by CapitaLand, Bedok Mall was valued at S$775.0 million as at 30 June 20151 . The transaction, which is conditional upon CMT unitholders’ approval, among other things, is expected to be completed by the fourth quarter this year.
Opened in December 2013, Bedok Mall is the first major mall in the heart of Bedok Town Centre, serving Singapore’s largest estate of about 300,000 residents as well as other residents in the east of Singapore. It is part of an integrated retail-residential-transport development, which also includes the 583-unit condominium Bedok Residences developed by CapitaLand that received its Temporary Occupancy Permit in May 2015. The mall’s Basement 2 is directly linked to the Bedok MRT station while the new air-conditioned Bedok bus interchange, which began operations in January, is integrated with the mall on Level 2.
With a net lettable area of approximately 222,500 square feet (sq ft), Bedok Mall is about the size of Junction 8, with over 200 shops spread across four floors from Basement 2 to Level 2. Its key tenants include Fairprice Finest, UNIQLO, Best Denki, Canton Paradise, Popular, McDonald’s and Din Tai Fung. As at 31 December 2014, Bedok Mall has a committed occupancy of 99.3%.
Of the total amount of $783.1 million, CapitaLand will receive from CMT about S$464.0 million, including 72 million new units in CMT, which will be priced at the 10-day Volume Weighted Average Price immediately preceding the date of completion of the transaction. An existing bank loan of S$319.1 million taken by Brilliance Mall Trust will also be repaid.
Mr Lim Ming Yan, President and Group CEO of CapitaLand, said: “The proposed divestment of Bedok Mall, as well as the ongoing divestment of a group of serviced residences and rental housing properties to Ascott Residence Trust and our 30% stake in PWC Building announced last month, are all examples of our robust capital recycling strategy. These transactions allow us to realise our investment value and development profit, and enhance our financial flexibility as we redeploy our capital into other ventures that will generate stronger returns for our shareholders.”
Mr Lim added: “CapitaLand offers a complete real estate value chain with leadership positions in investing, developing, operating and asset managing. Our proven capital recycling model enables us to maintain a robust balance sheet while we continue to grow our leadership position as one of Asia’s largest real estate companies. Our diversified global portfolio includes integrated developments, shopping malls, serviced residences, offices and homes. Leveraging on our robust and sound capital recycling strategy, CapitaLand is today the largest fund manager in Asia Pacific and 12th largest fund manager globally2 , with total real estate assets under management of S$72.2 billion.”
Mr Jason Leow, CEO of CapitaLand Mall Asia, said: “The monetisation of Bedok Mall is in line with our proactive asset management strategy, whereby we periodically review and reconstitute our portfolio to free up capital for new opportunities. By capitalising on the strategic advantages of Bedok Mall as a well-located and well-connected mall benefitting from the transformation of Bedok Town Centre into an exciting gateway for the East Coast, we have taken a relatively short time to develop it into a stabilised asset. Going forward, the growth potential in Bedok Mall will be best realised through our increased stake in CMT after it has acquired the property from us, and we will continue to manage Bedok Mall. We remain confident in the retail growth prospects in Singapore where we are the market leader with the largest network of 20 shopping malls. We are committed to the Singapore retail market and continue to be on the lookout for suitable new opportunities in Singapore and the region as we seek to strengthen our leadership position as Asia’s leading shopping mall developer, owner and manager.”
Summary of Bedok Mall
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1By CBRE Pte. Ltd. 2According to the ANREV Fund Manager Report 2015 released on 27 May 2015 by ANREV, the Asian Association for Investors in Non-listed Real Estate Vehicles Limited.