KUALA LUMPUR: MTrustee Bhd, the trustee of Capitaland Malaysia Trust (CLMT), has entered into agreements to acquire 91.8% of the total strata floor area of retail parcels in Queensbay Mall in Penang for RM990.5mil.
In a statement, CapitaLand Malaysia REIT Management Sdn Bhd (CMRM), the manager of CLMT, said the purchases from parties related to CapitaLand Investment Ltd (CLI) represent a discount of about 1% to the independent valuation of RM1bil.
It said the manager has proposed to undertake a private placement with an issuance of new CLMT units to raise gross proceeds of up to 50% of the total purchase consideration, while the remainder will be funded by bank borrowings. Including acquisition fees and expenses, the total cost of the acquisition is about RM1.03bil.
The issue price of the proposed private placement will be determined later by way of a bookbuilding process.
According to CMRM, CLI will support the proposed private placement by taking up its pro-rata entitlement included as part of the funding for CLMT to acquire the property.
As at Nov 3, 2022, CLI had a deemed interest of about 39.3% in CLMT.
The acquisition, which is conditional upon the approval of CLMT's non-interested unitholders at an extraordinary general meeting, is expected to be completed by 1Q 2023.
CMRM chairman Lui Chong Chee said it is an opportune time for CLMT to expand its portfolio of shopping malls and ride on the recovery of the country's retail sector as the country emerges from the pandemic.
"The proposed acquisition of Queensbay Mall will deepen CLMT’s presence in Penang, thus strengthening its foothold in the northern region of Malaysia, where it already owns Gurney Plaza and is targeting to complete the acquisition of its first logistics property.
"With a more diversified and resilient portfolio after adding Queensbay Mall and the logistics property, CLMT will be in a stronger position to deliver long-term value to its unitholders," he said.
"Post-acquisition of Queensbay Mall and the logistics property in Sungai Jawi, Penang, CLMT will have seven properties in its enlarged portfolio, with an uplift of 28.2% in assets under management to RM4.9 billion and an increase of 39.7% in net lettable area to approximately 4.3 million sq ft.
"Queensbay Mall’s property yield of approximately 7.3% is reasonable and will increase the overall property yield of CLMT’s portfolio," said CMRM CEO Tan Choon Siang.
He added that the proposed acquisition will contribute positively to earnings and is expected to be yield accretive upon completion.