Singapore-listed real estate investment trust CapitaMall Trust has entered into an agreement to sell its property, Hougang Plaza, to Oxley Bloom for S$119.1 million (US$95.80 million).
Located in Hougang Central, Hougang Plaza is sited on land with a lease expiring on or about 28 February 2090. It is a three-storey shopping mall with a net lettable area of 75,353 sqft. The mall has a committed occupancy of 100 per cent as of 31 March 2012, and contributed about 0.5 per cent to the net property income of CapitaMall Trust Group for the first quarter to March 31. Major tenants include Kopitiam, Furniture & Furnishings, K Box and Cold Storage.
CapitaMall Trust acquired 96.7 per cent of Hougang Plaza’s strata area in 2005 and the remaining 3.3 per cent in 2006 for a total of S$49.1 million (US$39.49 million). Based on the latest independent valuation as at December 31, the property is valued at S$34 million (US$27.35 million). CapitaMall Trust will realise a net gain of approximately S$83.8 million (US$67.41 million) from the sale of Hougang Plaza after taking into account the divestment fee and other divestment related expenses.
Simon Ho, CEO of CapitaMall Trust, said that after reviewing all options for Hougang Plaza, sale of the asset would unlock higher value for unit holders.
“If we had opted to retain the asset, we would have to commit significant capital expenditure over the next few years to maintain the mall. The net sale proceeds of approximately S$117.8 million (US$94.76 million) will provide CapitaMall Trust with greater financial flexibility for refinancing or to take advantage of any good acquisition opportunities.”
The sale of Hougang Plaza is expected to be completed on or about June 13. Upon completion of this transaction, CapitaMall Trust will have a portfolio of 15 operational shopping malls in Singapore valued at approximately S$7.8 billion (US$6.27 billion).
CapitaMall Trust owns and invests in retail properties located in the suburban areas and downtown core of Singapore, including Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura, Bugis Junction, Sembawang Shopping Centre, JCube, Hougang Plaza, Raffles City Singapore (40 per cent interest), Lot One Shoppers’ Mall, Bukit Panjang Plaza, Rivervale Mall, The Atrium@Orchard, Clarke Quay and Bugis+ (formerly known as Iluma).
Oxley Bloom is a lifestyle property developer engaged in the development of residential, commercial and industrial developments that cater to upwardly mobile homebuyers and entrepreneurs who value quality, style and convenience. Oxley’s property development projects are typically located in prime areas and complimented by prominent lifestyle features. Its portfolio includes Oxley BizHub, ArcSphere, The Commerce @ Irving and Oxley BizHub2.
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