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This acquisition will consolidate MCT’s ownership over the whole development, comprising MBC I3 and the Property (Mapletree Business City Development).
Mapletree Commercial Trust Management Ltd., as manager of Mapletree Commercial Trust (MCT), announced that 80 Alexandra Pte. Ltd (a subsidiary of MCT) and DBS Trustee Limited (as trustee of MCT), have entered into a conditional share purchase agreement to buy Mapletree Business City (Phase 2) (MBC II) and the common premises at 10, 20, 30 Pasir Panjang Road Singapore 117438/11743/1174402 (Common Premises and with MBC II, the Property).
The purchase was made via the acquisition from Heliconia Realty Pte Ltd (a direct wholly-owned subsidiary of Mapletree Investments Pte Ltd), of Mapletree Business City Pte. Ltd shares for an agreed property value of S$1,550 million.
This acquisition will consolidate MCT’s ownership over the whole development, comprising MBC I3 and the Property (Mapletree Business City Development).
The agreed property value was reached via a willing-seller and willing-buyer basis, after considering the two independent valuations of the property made by Savills Valuation and Professional Services (S) Pte. Ltd. and CBRE Pte. Ltd.
Taking into account acquisition-related expenses, the total acquisition cost is estimated to be S$1,575.8 million, which MCT intends to fund via a combination of equity and debt.
The Property sits on an area measuring 2.8 ha (301,389 sq ft), with a total net lettable area (NLA) of around 1.2 million sq ft. It has four blocks of business park space, including the common carpark, retail area, multi-purpose hall and common property of Mapletree Business City Development.
The Property also has a committed occupancy rate of 99.4 percent as at 31 August 2019, with around 97 percent of leases by NLA being embedded with average annual step-ups of around 2.3 percent.
Sharon Lim, CEO of Mapletree Commercial Trust Management Ltd, believes the Property is “an appealing and costefficient alternative to the CBD at almost half the CBD’s rent.”
“Since its completion, it has benefited from both decentralisation and flight to quality trends – tenants such as Google, Covidien and Pfizer have consolidated their operations, expanded their footprints cost-effectively, or relocated to the Property in pursuit of higher quality space,” she added.
Lim is confident that unitholders can expect the transition to give financial and long-term value.
“It will boost MCT’s NPI, DPU and NAV per unit, and enlarge its asset size from S$7.4 billion to S$8.9 billion. Post-Acquisition, MCT’s portfolio will be further elevated, with best-in-class assets, namely VivoCity, MBC I and MBC II, collectively constituting about 80 percent of the Enlarged Portfolio’s valuation and NPI,” she added.
The acquisition’s completion is subject to approvals of the MCT’s unitholders at an extraordinary general meeting on 15 October 2019 and a successful equity fund raising.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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