Dasin Retail Trust has entered a non-binding memorandum of understanding (MOU) to potentially divest two malls to Wuhu Yuanche Bisheng Investment Center, the REIT said in a filing to SGX Sunday.
The terms of the sale, including the price, are subject to negotiations and entering definitive agreements, the filing said.
The malls are Shiqi Metro Mall and Xiaolan Metro Mall, located in Zhongshan, Guangdong Province, in China, the filing said. The Shiqi Metro Mall has a market valuation of CNY2.86 billion as of end-2020, while the Xiaolan Metro Mall was valued at CNY2.15 billion, according to the trust’s website.
Wuhu Yuanche Bisheng Investment Center is a buyout fund with institutional and private investors, and is managed jointly by GSUM Real Estate Fund Management and a subsidiary of Sino-Ocean Capital Holding, which is a substantial unitholder of Dasin Retail Trust, the filing said.
Glory Class Ventures, an affiliate of Sino-Ocean Capital Holding, holds around 6.3 percent of Dasin Retail Trust, the filing said.
The MOU doesn’t restrict Dasin Retail Trust from seeking higher or better offers from other third parties, the filing said.
The net proceeds from the sale of the properties will be used to repay existing syndicated loans and any remainder will be used for working capital purposes, the trust said.
In August 2021, the trust said it was in a negative working capital position.
Dasin Retail Trust has exposure to the Guangdong-Hong Kong-Macau Greater Bay Area. The portfolio had seven retail malls valued at around CNY11.6 billion as of end-2020, according to the REIT’s website.