CapitaLand Mall Trust to acquire rest of Westgate in S$805.5 million deal

CapitaLand Mall Trust building in Singapore’s Bugis neighborhood.CapitaLand Mall Trust building in Singapore’s Bugis neighborhood.

CapitaLand Mall Trust is set to acquire the 70 percent of Infinity Mall Trust it doesn’t already own for S$805.5 million from CapitaLand, including other costs, in a deal which will give the trust complete ownership of Westgate mall in the Jurong Lake District, the trust manager said on Monday.

CMT will fund the acquisition either through debt or a combination of debt and equity, with the transaction expected to be completed in the fourth quarter, the trust manager said in a filing to SGX after the market close on Monday.

CapitaLand held the 70 percent stake in Infinity Mall Trust through its wholly owned subsidiaries CMA Singapore Investments (4), which held a 50 percent stake, and CL JM, which held a 20 percent stake, it said.

Westgate, which has five levels of retail space above ground and two basement levels as well as commercial space at Level 26, is the retail portion of a retail-and-office development in Singapore’s Jurong Lake District, where the government plans to add 20,000 homes and 100,000 new jobs as well as the Jurong Region Line to connect to the Jurong East MRT station, it said. Occupancy was at 98 percent as of the end of July, it said.

The acquisition price was based on an agreed market value of S$1.128 billion for all of Westgate, it said. The deal is conditional on unitholders’ approval as it exceeds 5 percent of CMT’s latest audited net tangible assets, it said.

“At S$2,746 per square foot, the acquisition price is attractive for an asset of Westgate’s quality. In terms of gross revenue, the proportion of CMT’s portfolio focused on necessity shopping – which has shown resilience over the years – would have increased from 79.1 percent to 80.3 percent with the proposed acquisition,” Tony Tan, CEO of the trust manager, CapitaLand Mall Trust Management Ltd. (CMTML), said in the statement.

He noted that the deal allowed the trust to recycle the capital from the sale of Sembawang Shopping Center into a newer property with stronger potential growth and an entry yield of 4.3 percent. CMT sold Sembawang Shopping Centre for S$248 million in June, it noted.

This article was originally published on Tuesday, 28 August 2018 at 6:30 A.M. SGT; it has since been updated to include the ownership of Infinity Mall Trust’s shares.

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