SINGAPORE (July 1): The trustee-manager of Dasin Retail Trust (DRT) is acquiring Documen Metro Mall in China for $274.8 million.
On Sunday, DRT's trustee-manager entered into a sale and purchase agreement with Zhang Zhencheng, the chairman and non-executive director of the trustee-manager, and sponsor Zhongshan Dasin Real Estate.
The acquisition will be funded through a combination of debt and equity, says the trustee-manager.
It is proposing a private placement of new units in Dasin Retail Trust at an illustrative issue price of 83.6 cents to raise around $68.8 million in gross proceeds, and to draw down some $210 million in bank borrowings
With a leasehold that expires on Oct 12, 2052, Documen Metro Mall is an integrated shopping mall located at 328 Zhongxing Middle Road, Jingan town in the Documen district of Zhuhai, Guangdong province.
There are also two basement levels of car park space and six levels above ground.
The mall also has gross floor area (GFA) of 168,269 sqm – inclusive of car park and other facilities space – and a nettable lease area (NLA) of 75,638 sqm.
The mall also has an occupancy rate of 99.7% and a weighted average lease expiry (WALE) of 11.9 years.
The trustee-manager says Documen Metro Mall offers a one-stop destination for leisure, entertainment, F&B and retail activities.
According to the trustee-manager, the acquisition will allow the company to acquire a prime asset Doumen District in Zhuhai, with regional development advantages and a favourable position.
The acquisition is estimated to maintain DRT’s pro-forma DPU with distribution waiver of 7.22 cents, and increase its pro-forma DPU without distribution waiver from 3.81 cents to 4.27 cents.
NPI yield is also expected to be impacted positively, as the pro-forma NPI yield for the enlarged portfolio for FY2018 will be 4.0%, compared to the NPI yield of 3.9% for the existing portfolio for FY2018.
As at 2.37pm, units at DRT are down one cent at 87 cents.
