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CapitaLand Limited has agreed to sell its 70 percent stake in Westgate – the retail component of an integrated retail and office development in Jurong Lake District – to CapitaLand Mall Trust (CMT) for $789.6 million.
This works out to $2,746 per sq ft (psf), valuing the 100 percent stake in Westgate at $1.128 million.
The sale will generate about $397.6 million in proceeds for CapitaLand and a net gain of around $99.2 million.
Set to be completed in the fourth quarter of 2018, the transaction is conditional on the approval of CMT’s unitholders.
CapitaLand Group president and group CEO Lim Ming Yan revealed that the move is part of the company’s capital recycling actions.
“The divestment of Westgate to CMT allows us to realise the property’s investment value, thus enhancing our financial flexibility as we redeploy our capital into higher yielding investments,” he said.
“Having achieved our annual capital recycling goal of $3 billion in 1H 2018, we continue to actively seek opportunities to reconstitute our portfolio. Within the last three months, we have announced acquisition of three sites – one in Singapore and two in China – valued at a total of S$1.65 billion as we step up momentum in replenishing our land bank.”
Meanwhile, CapitaLand Mall Trust’s manager revealed that CMT’s total acquisition outlay, which is estimated at S$805.5 million, will be funded through debt or a combination of debt and equity funding.
Opened in December 2013, Westgate has a committed occupancy of 98 percent as at 31 July 2018. It posted an annual shopper traffic of 49.4 million in 2017.
Post divestment, CapitaLand will “continue to benefit from Westgate’s stable yield and participate in its future growth through CapitaLand’s stake in CMT,” said CapitaLand Singapore, Malaysia and Indonesia CEO Ronald Tay.
“We remain confident in the government’s vision for the transformation of Jurong Lake District into Singapore’s second Central Business District and the underlying strengths of Singapore’s retail market, where CapitaLand is the largest mall owner-operator.”
Eugenia Rosaline Shlaen edited this story. To contact her about this or other stories, email eugenia@propertyguru.com.sg
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