CapitaLand’s mall REIT is divesting a small suburban shopping mall to a PE fund, while Perennial Real Estate has entered into an anchor lease for a new ParkwayHealth medical facility in China.
CapitaLand to sell Rivervale Mall to PE fund for $137.6m
CapitaLand Mall Trust Management (CMTML), the manager of CapitaLand Mall Trust (CMT), has entered into an agreement to sell Rivervale Mall to a private equity (PE) fund managed by AEW Asia for S$190.5 million ($137.6 million).
The three-storey, 99-year leasehold mall is located in Sengkang New Town and has a remaining lease term of approximately 81 years. Completed in 2001, the development has a net lettable area of 81,159 sq ft and a committed occupancy of 100 per cent as at end-September.
Major tenants include NTUC, Daiso, McDonald’s and United Overseas Bank, and an independent valuation at the end of June 2015 placed its value at @$116 million (US$83.8 million). CMT will realise a gain of approximately S$72 million from the sale, accounting for the divestment fee and other divestment-related expenses.
In a media release, Wilson Tan, CEO of CMTML, said, “The optimal option for Rivervale Mall after our evaluation was a sale of the asset, as it would unlock the highest value for our unitholders. As Rivervale Mall only makes up about 1% of CMT’s total deposited property value, its divestment presents minimal impact to CMT’s financial performance and distribution per unit. The net sale proceeds of about S$188.0 million will enhance CMT’s financial flexibility.”
The transaction will be completed on or about 15 December 2015. From January 2016, CMT will maintain a portfolio of 16 operational shopping malls in the city-state. CMT is the first listed REIT in Singapore, having conducted its listing in July 2002. It is also the largest REIT by market capitalisation in the city-state, being worth S$7.4 billion (US$5.35 billion) as of 30 June 2015.
Perennial Real Estate enters into anchor lease for new ParkwayHealth Chengdu Hospital
Perennial Real Estate Holding, through its China subsidiary, Chengdu Ruifeng Real Estate Development, has entered into an anchor lease agreement with IHH Healthcare via its indirect, wholly-owned subsidiary, M&P Investments, and local Chinese partner, Shanghai Broad Ocean Investments.
M&P and Broad Ocean, through a JV firm, will lease about 48,000 sqm in net leaseable area at Perennial International Health and Medical Hub in Chengdu, as part of operating a 350-bed tertiary hospital, ParkwayHealth Chengdu Hospital.
The medical hub is part pf the prime Chengdu East High Speed Railway Integrated Development located in Western China, with a gross floor area of 280,000 sqm and comprises Blocks A1 and A2. Located on Basement 3 to Level 5 of Block A2, it will serve as IHH’s first tertiary medical facility in Western China.
It will be operating under the Parkway Pantai brand and is expected to be operational in 2H2016, offering specialised care and services in the following fields; obstetrics & gynaecology, paediatrics, cardiology, orthopaedics, ophthalmology and internal medicine. The investment comes amid concerns over China’s economist health.
Ha Jiming, the vice-chairman of Goldman Sachs money management unit in China, is reported by Bloomberg to have described China’s economic prospects as heavily distorted, with fixed-asset investment in the economy amounting to 46 per cent of gross domestic product in 2014, more than in 1958 during the Great Leap Forward. Pre-fixed growth targets were also an additional danger to the Chinese economy, it was added.