SINGAPORE (July 17): CapitaLand Commercial Trust (CCT) is acquiring a 94.9% stake in Main Airport Center (MAC) in Frankfurt, Germany, for €251.5 million ($387.1 million).
The acquisition marks CCT’s second asset acquisition in Frankfurt and increase CCT’s overseas exposure from 5% to 8% of its portfolio property value.
Located close to Frankfurt Airport and a 20-minute drive to Frankfurt’s Central Business District, MAC is a freehold multi-tenanted office building with a total net lettable area (NLA) of 60,200 sqm.
Of this, 53,900 sqm is high-specification office space and the remaining 6,300 sqm is ancillary space housing a conference hall, meeting rooms and 1,510 car park lots. The committed occupancy of the property was 90% as at June 30.
The acquisition is conditional upon CCT’s unitholders’ approval, which is expected to be obtained in September.
The transaction is also expected to be DPU accretive in the range of 1.0% to 2.5%, based on pro forma 1H 2019 DPU.
The proposed transaction is based on an agreed property value of €265.0 million ($407.8 million) for MAC on a 100% basis, which translates to $387.1 million for the 94.9% interest. Including acquisition-related expenses, CCT’s total acquisition outlay is estimated at $390 million.
The acquisition is considered an interested party transaction as CapitaLand Commercial Trust Management Limited (CCTML), the manager of CCT, had entered into the agreement with parent company CapitaLand and the property's other owner Lum Chang Holdings.
CapitaLand will continue to hold a 5.1% interest in the holding companies post-transaction.
CCT will fund the acquisition fully with Euro debt facilities or a combination of equity and Euro debt facilities.
The resultant pro forma aggregate leverage for CCT would be 35.0% to 37.0% as at 30 June 2019.
Kevin Chee, CEO of CCTML, says, “Offering income stability with a quality and diverse tenant base, the acquisition of MAC delivers an attractive net property income yield of 4.0%. Post-acquisition, CCT’s portfolio property value will increase from $10.7 billion to $11.1 billion.”
Units in CCT closed 3 cents higher at $2.18 on Tuesday.
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