CapitaLand has signed an agreement with CapitaLand Retail China Trust (CRCT) to sell its interest in three malls in China – CapitaMall Xuefu and CapitaMall Aidemengdun in Harbin and CapitaMall Yuhuating in Changsha for RMB2,960 million (about S$589.2 million).
The agreed value was negotiated on a willing-buyer and willing-seller basis. The sale will generate for CapitaLand proceeds of about S$239.9 million and a net gain of about S$37.6 million. The transaction, which is conditional upon CRCT unitholders’ approval, is expected to be completed in 3Q 2019.
Mr Lucas Loh, President & CEO of China, CapitaLand Group, said: “Asset recycling is a key part of CapitaLand’s strategy to enhance returns and rejuvenate our portfolio. The sale of CapitaMall Xuefu, CapitaMall Aidemengdun and CapitaMall Yuhuating to CRCT allows us to realise their property investment value and unlock capital for reinvestment.”
“Post divestment, we will continue to benefit from the malls’ strong and steady yields and participate in their future growth through CapitaLand’s stake in CRCT. The malls will also continue to be managed by CapitaLand. We remain confident in the retail prospects of Harbin and Changsha, which are fast-growing provincial capital cities with favourable longterm outlook. As the sponsor of CRCT, CapitaLand is positive on the impact that the proposed transaction will have on CRCT in terms of rejuvenating its portfolio and strengthening its foundation for growth,” he added.
In support of CRCT, CapitaLand has indicated it intends to take up its pro-rata entitlement, should relevant equity fund raising be included as part of the funding for CRCT to acquire the three companies. As at the date of announcement, CapitaLand owns approximately 38.04% of CRCT’s units, including its indirect interests in CapitaLand Mall Trust, which owns about 12.29% in CRCT.