CapitaLand and CapitaLand Retail China Trust (CRCT) said on Friday they entered a deal to divest CapitaMall Wuhu, which has been shuttered since the third quarter of last year, to an unrelated third party.
The transaction is based on the adjusted net asset value of CapitaMalls Wuhu Commercial Property (CWCP), which owns all of the mall, of 210 million yuan, or around S$41.5 million, the two Singapore-listed property companies said in an SGX filing on Friday.
CWCP is 51.0 percent owned by CRCT’s wholly owned subsidiary, CapitaRetail China Investments (B) Gamma (CCIBG), and 49 percent owned by CapitaLand’s associated company Luck Joy International (LJI), the filing said.
CapitaMall Wuhu, which has five storeys, closed in the third quarter of last year after its anchor tenant exited, the companies said.
Lucas Loh, president for China and investment management at CapitaLand Group, said in the statement that selling the mall would unlock capital for investments in core assets in cities where the company has “scale and competitive advantage.”
Tan Tze Wooi, CEO of CapitaLand Retail China Trust Management, CRCT’s manager, said in the statement the sale proceeds would give the trust “greater financial flexibility” for other investments.
Tan noted that the 51 percent stake in the mall was less than 1 percent of the trust’s asset size and wouldn’t have much impact on the bottom line.
CRCT said it expected net divestment proceeds of 90.6 million yuan, or around S$17.9 million, which may be used for reducing existing debt and/or general corporate or working capital needs.
The deal is expected to be completed in the second half of this year, the filing said.
After its completion, CRCT’s portfolio will have 10 malls in seven Chinese cities, while CapitaLand will have 51 malls in 21 cities, the two said.