Starhill Global REIT said Tuesday it submitted a non-binding expression of interest to Isetan Singapore for the potential acquisition of the department store operator’s stake in the Wisma Atria mall.
That was after the Business Times reported Tuesday, citing an unnamed source, that the REIT was seeking to buy Isetan’s holding in the mall, which is located on Singapore’s tony Orchard Road shopping belt, for more than S$290.7 million. Isetan Singapore’s 2018 annual report put the fair value of the property at S$290.67 million.
“No definitive agreement has been entered into in relation to the purchase of Isetan’s strata area in Wisma Atria,” the REIT said in a filing to SGX. “This has been an ongoing process and is part of the Manager’s continuing engagement with Isetan and our regular process of evaluating various prime assets for the purpose of expanding Starhill Global REIT’s portfolio.”
For its part, Isetan Singapore said in a separate statement that it was evaluating the expression of interest and whether it was in line with the retailer’s long-term strategy.
Like the REIT, Isetan Singapore said that no definitive agreement was made.
In its annual report, published in March, Isetan Singapore said rental revenue from the Wisma Atria property fell 13.57 percent on-year to S$9.91 million in 2018, while profit fell 25.1 percent on-year to S$4.45 million, despite being nearly fully occupied, amid a tough retail and food and beverage environment.
At the time, Isetan Singapore said the property would remain a strategic asset, and that it expected the upcoming Thomson East Line Orchard Station, due in 2021, would boost footfall. The department store ceased to have its own retailing activity in Wisma Atria in 2015.
Isetan Singapore requested a trading halt on its shares around midday Tuesday after its shares surged 9.62 percent to S$5.24.
Starhill Global REIT units were down 1.31 percent at S$0.76 Tuesday.