The purchase yields are comparable to recent retail leasehold mall transactions, such as The Clementi Mall and PLQ, at 4% to 4.5%.
CapitaLand Integrated Commercial Trust (CICT) is swapping leasehold prime office for freehold prime retail, says RHB Bank Singapore analyst Vijay Natarajan, with its proposed acquisition of Paragon partly funded by its divestment of Asia Square Tower 2 (AST2) to Malaysia’s IOI Properties Group.
In what Natarajan calls a “positive move”, CICT will purchase a 100% freehold interest in Paragon for $3.9 billion, representing a net yield of 3.9%. This comprises 4.1% net yield from retail and 3.4% net yield from medical/ office components at Paragon.
