Singapore-headquartered real estate company CapitaLand Limited will be selling 70 percent of its stake in Infinity Mall Trust (IMT) that holds Westgate, a retail and office development in Singapore’s Jurong Lake District for S$397.6 million ($291.6m), the company announced.
The stake will be divested to HSBC Institutional Trust Services (Singapore) Limited, the trustee of CapitaLand Mall Trust (CMT).
“The divestment of our stake in Westgate unlocks the value of our investment and is in line with our proactive efforts to reconstitute our portfolio for the benefit of our shareholders,” said Ronald Tay, CEO of CapitaLand in Singapore, Malaysia and Indonesia.
The sale will see CapitaLand get a net gain of about S$99.2 million ($73 million) and the deal was based on Westgate’s total market value at S$1.13 billion ($829 million).
The deal is expected to be completed by the fourth quarter of 2018.
The five-year-old Westgate is developed by CapitaLand and CMT and currently has an occupancy rate of 98 percent. The property is among CapitaLand’s more than $68 billion worth of global portfolio comprising integrated developments, shopping malls, serviced residences, offices, homes, real estate development trusts and funds.
Meanwhile, the government of Singapore is also planning to transform the Jurong Lake District into Singapore’s second central business district and CapitaLand is confident as the largest mall owner-operator about the underlying strengths of Singapore’s retail market.
“This is another of CapitaLand’s capital recycling actions which enables us to maintain a robust balance sheet while growing our assets under management. 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.
“Having achieved our annual capital recycling goal of S$3 billion ($2.2 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 ($1.21 billion) as we step up momentum in replenishing our land bank.,” said Lim Ming Yan, president & group CEO of CapitaLand Group.
In August, CapitaLand Limited completed acquisitions including a $565.5 million for Sengkang Central, a residential and commercial development, handled together with its joint venture partner City Developments Limited. In the past three months, it announced S$1.65 billion ($1.2 billion) worth of acquisitions of three sites in China and Singapore.
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