CapitaLand Investment Limited (CLI) and its joint venture partners for 79 Robinson Road – Mitsui & Co. and Tokyo Tatemono Co. – have entered into agreements to divest their 100% interest in the property to CLI-sponsored investment vehicles CapitaLand Integrated Commercial Trust (CICT) and CapitaLand Open End Real Estate Fund (COREF) for $1.26 billion or $2,423 per sq ft.
CLI’s effective stake in the property is 65%.
The transaction is targeted to be completed in 2Q2022. Upon completion, CLI is expected to receive proceeds of about $391 million and realise an estimated gain of $72 million.
Located in the Tanjong Pagar area of Singapore's central business district, 79 Robinson Road is a Grade A office building completed in April 2020 with a remaining land tenure of around 45 years. The 29-storey property comprises about 514,950 sq ft of office space and 4,999 sq ft of ancillary retail space, with a committed occupancy of 92.9% as at Dec 31, 2021.
The property's weighted average lease expiry is 5.8 years and office tenants include multinational companies from diverse sectors such as banking, legal, insurance & financial services, business consultancy, IT, aviation, media and telecommunications.
As at Dec 31, 2021, CLI had a pipeline of approximately $10 billion of high-quality investment properties on its balance sheet, intended for recycling to its various fund platforms over the next three to four years, which will be an important contributor to the group’s funds under managemen (FUM), fee-related earnings (FRE) and return-on-equity growth. The group targets to recycle at least $3 billion of assets annually.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
Jonathan Yap, CEO, fund management, CLI says, "CLI’s divestment of its interest in 79 Robinson Road to CICT and COREF demonstrates the disciplined execution of our strategy to convert balance sheet assets into FUM that generate recurring FRE. It also shows our strong commitment to support the long-term growth and continual success of CLI’s investment vehicles – both our sponsored real estate investment trusts and private funds – by providing a pipeline of attractive assets.
"Moving forward, CLI will participate in the organic growth of 79 Robinson Road through our fund management platform, and continue to receive recurring income from providing asset and property management services to the new owners,” he adds.
Shares in CLI closed at $3.90 on Mar 25.
Photo: CapitaLand
