CapitaLand Malaysia Trust to acquire its first logistics property for RM80 million
CapitaLand Malaysia Trust signs agreement to acquire its first logistics property for RM80 million
Proposed acquisition of property in Penang marks CLMT’s entry into Malaysia’s logistics sector
Kuala Lumpur, 7 June 2022 – CapitaLand Malaysia Trust (formerly known as CapitaLand Malaysia Mall Trust or CLMT) has entered into a sale and purchase agreement to acquire two plots of contiguous freehold land and industrial properties erected therein in Sungai Jawi, Penang (the Logistics Property). This marks CLMT’s entry into Malaysia’s logistics sector after the expansion of its investment mandate beyond the retail sector to include properties in commercial, office and industrial asset classes1.
CLMT intends to fund the total consideration of RM80 million for the Logistics Property with bank borrowings. Post-transaction, CLMT’s gearing will increase from 35.9% to 37.2%, which remains well below the regulatory limit of 50%. The proposed acquisition will contribute positively to CLMT’s earnings and is accretive at the distribution level. Subject to the fulfilment of conditions precedent, the proposed acquisition is expected to be completed in 2H 2022.
Sitting on a land area of approximately 12.6 acres, the Logistics Property has a net lettable area (NLA) of approximately 335,000 square feet (sq ft) with quality tenants operating in the logistics sector. Located in Kawasan Perusahaan Valdor in Sungai Jawi, the freehold Logistics Property has excellent accessibility, due to its close proximity to the Batu Kawan Industrial Park and connectivity to the North South Highway and Penang Second Bridge. Often dubbed the Silicon Valley of the East, Penang is a key industrial hub in Malaysia that has attracted a mix of foreign multinational corporations and local large companies from the electrical and electronics, machinery and equipment, and medical technology sectors.
Mr Tan Choon Siang, CEO of CapitaLand Malaysia REIT Management Sdn. Bhd. (formerly known as CapitaLand Malaysia Mall REIT Management Sdn. Bhd.), the manager of CLMT, said: “Following the expansion of CLMT’s investment mandate in June 2021, we are pleased to embark on the acquisition of our maiden logistics property, which is well-placed to benefit from Penang’s growing importance as one of the most dynamic industrial hubs in Malaysia. We believe the demand for logistics warehouses in Malaysia remains strong and resilient. The proposed acquisition is in line with CLMT’s objectives to deliver long term and sustainable returns to unitholders by acquiring quality properties with stable recurring income. It will enable CLMT to gain a foothold in Malaysia’s logistics sector with a sizeable property measuring about 335,000 sq ft in NLA, paving the way for our next chapter of growth. We expect the proposed acquisition to contribute positively to CLMT’s earnings upon its completion.”
Summary of Logistics Property
No. 1564, MK12, Jalan Nafiri, Kawasan Perusahaan Valdor, 14200 Sungai Jawi, Pulau Pinang comprises two plots of contiguous freehold land held under:
(i) GM448, Lot No 1628, Mukim 12, Tempat Ladang Valdor, Daerah Seberang Perai Selatan, Negeri Pulau Pinang; and
(ii) GM450, Lot No 1630, Mukim 12, Tempat Ladang Valdor, Daerah Seberang Perai Selatan, Negeri Pulau Pinang.
A single-storey warehouse annexed to a double-storey office building; and
Two single-storey detached warehouses and other ancillary buildings.
12.6 acres (approximately 549,000 sq ft)
Net lettable area
Approximately 335,000 sq ft
CLMT’s existing portfolio comprises five shopping malls and a complementary office block located across three key urban centres in Malaysia. They are Gurney Plaza in Penang; three properties in Klang Valley – a majority interest in Sungei Wang Plaza in Kuala Lumpur; 3 Damansara and 3 Damansara Office Tower in Petaling Jaya; and The Mines in Seri Kembangan; and East Coast Mall in Kuantan, Pahang.
1 Including but not limited to business parks, logistics facilities, warehouses, distribution centres, data centres and integrated developments.