The transaction will result in CRT being privatised and delisted from the Singapore Exchange (SGX).
The acquisition will be done by way of a trust scheme, with a consideration of S$1.17 in cash per unit, amounting to an equity value of about S$900.6 million ($649.8 million). The acquisition consideration carries a premium of about 38 per cent to the 12-month volume weighted average price per unit.
Assuming the effective date falls on or before 31 October 2017, unit holders of CRT may receive a distribution of up to about S$31.3 million. This represents of up to about 4.06 Singapore cents per unit.
To date, CRT’s total portfolio of 11 assets comprises four retail properties as at listing date, and seven retail properties acquired subsequent to the initial public offering (IPO). As at 30 June 2016, the portfolio is valued at approximately JPY112,640 million (S$1.5 billion).
Its holdings include Aeon Town Moriya, Aeon Town Suzuka, Mallage Shobu, Luz Omori, One’s Mall, Croesus Shinsaibashi, Croesus Tachikawa, Torius, Fuji Grand Natalie, Mallage Saga and Feeeal Asahikawa.
The key competitive strengths of the properties are stable yields, high occupancy rates and proximity to train stations and key shopping districts. In aggregate, the 11 properties have a NLA (net leaseable area) of approximately 426,100.5 sq m and an average occupancy rate of 98.1 per cent as at 30 June 2016.
In April 2017, Croesus Retail Trust stated it had been approached with an offer and that it was engaged in preliminary talks. Its current market capitalisation amounts to S$812.07 million ($585.57 million).
Christopher Heady, senior managing director and head of Asian real estate of The Blackstone Group, said: “Croesus Retail Trust has an established portfolio of quality Japanese retail assets. This transaction represents a good opportunity for Blackstone’s real estate business to further expand its platform in Japan and a chance to work together with the proven management team and staff at Croesus.”
The Blackstone Group has completed acquisitions with an aggregate value of over $3 billion in Japan, as at 31 December 2016. Given CRT’s Japan exposure, the deal represents a consolidation for Blackstone and is part of the broader consolidation wave impacting REITs in the city-state.
The private equity (PE) player is among the largest institutional real estate investors worldwide. As of 31 December 2016, the Blackstone Group manages $102 billion of equity for real estate investments.
Since 2004, the Blackstone Group has completed over 20 public company real estate acquisitions with a combined transaction value in excess of US$110 billion. It is also one of the largest retail owners in the world, with investments in 563 properties globally and 15 properties totalling 6.5 million square feet in Asia, as of 30 September 2016.