SINGAPORE (Aug 27): CapitaLand Mall Trust (CMT) is acquiring the remaining 70% stake in Westgate mall for $789.6 million from controlling unitholder CapitaLand. Including acquisition-related expenses, CMT’s total acquisition outlay is estimated at $805.5 million.
The acquisition is based on an agreed market value of Westgate at $1.13 billion ($2,746 psf).
Upon completion of the proposed acquisition, CMT will own 100% of Westgate.
The sale will generate for CapitaLand proceeds of about $397.6 million and a net gain of about $99.2 million.
Opened in Dec 2013, Westgate is the retail component of an integrated retail and office development in Jurong Lake District.
As at July 31, Westgate has a committed occupancy of 98.0%.
CMT will fund the acquisition through debt or a combination of debt and equity funding, according to market conditions.
As CapitaLand is a controlling unitholder of CMT, the acquisition is an interested party transaction (IPT) under the listing rules of the Singapore Exchange and as the value of the acquisition exceeds 5% of CMT’s latest audited net tangible assets, the acquisition is subject to the approval of CMT’s unitholders at an extraordinary general meeting.
The transaction, which is conditional upon CMT unitholders’ approval, is expected to be completed in 4Q18.
At $2,746 psf, the acquisition price is “attractive” for an asset of Westgate’s quality, says Tony Tan, CEO of CMT’s manager CapitaLand Mall Trust Management Limited in the press release.
In terms of gross revenue, the proportion of CMT’s portfolio focused on necessity shopping would have increased from 79.1% to 80.3% with the proposed acquisition, he adds.
In addition, the maximum contribution by any single property to CMT’s portfolio gross revenue would also decrease to 11.1% from 11.8%.
Year to date, units of CMT are up just 1 cent at $2.17 on Monday.
