Dasin Retail Trust is in talks to sell two of its assets, retail malls Shiqi Metro Mall and Xiaolan Metro Mall to an entity linked to one of the trust’s substantial shareholders. The two malls, last valued at RMB4.8 billion, account for 42.8% of total assets by value.
Both malls are located Zhongshan of China’s Guangdong province.
The potential buyer Wuhu Yuanche Bisheng Investment Center, is described by Dasin as a buyout fund with institutional and private investors.
The potential buyer will be managed jointly by GSUM Real Estate Fund Management Co and a subsidiary of Sino-Ocean Capital Holding, which in turn is a substantial unitholder of Dasin Retail Trust via its affiliate, Glory Class Ventures, which holds a stake of around 6.3% in Dasin Retail Trust at March 18.
"The Properties may be acquired [through] a put option proposed to be granted by the purchaser to the Trustee-Manager," the announcement says. While an MOU has been signed, Dasin’s manager states that it is not prevented from seeking or hearing better offers from other potential buyers, “thereby having the potential to unlock greater value from the Trust’s portfolio of properties.”
If the sale of the two malls are realised, the proceeds will be used to pare down debt and for working capital. If the two malls are sold at valuation, it would be accretive for unitholders as Dasin is trading at just 0.22x its net asset value of $1.40.
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Besides these two malls, Dasin holds five other malls as part of its portfolio.
According to Dasin’s website, as at Dec 31 2020, this portfolio was valued at around RMB11.6 billion ($2.3 billion).
Dasin Retail Trust closed March 18 at 31 cents, up 3.33% for the day but down 18.42% year to date. The trust's distribution per unit in FY2021 was 4.67 cents, translating into a historice DPU yield of 15%.
