CapitaLand China Trust (CLCT) has announced the divestment of CapitaMall Yuhuating, a retail property in Changsha, to CapitaLand Commercial C-REIT (CLCR) for RMB813.8m (approximately S$146.8m). This sale represents an 8.8% premium over the floor price of RMB748.0m and a 3.7% premium over its December 2024 valuation of RMB785.0m. The transaction is part of CLCT’s strategy to unlock value from mature assets and enhance financial flexibility.
The divestment will see CLCT subscribing to a 5% strategic stake in CLCR at the initial public offering (IPO) price of RMB5.718 per unit. The net proceeds from the sale, after accounting for the IPO subscription and transaction costs, are estimated to be RMB663.4m (approximately S$119.8m). These proceeds are expected to reduce CLCT’s aggregate leverage from 42.6% to 41.2%.
Gerry Chan, CEO of CapitaLand China Trust Management Limited, stated, “CLCR offers a strategic opportunity for CLCT to enter the expanding C-REIT market. It provides a platform to unlock value from our mature assets, bolstering our financial flexibility to pursue income diversification and enhance portfolio quality.”
CapitaMall Yuhuating, located in the Yuhua District of Changsha, is a community mall with convenient access to public transport. The divestment aligns with CLCT’s broader strategy to focus on a diversified portfolio across Greater China, including Hong Kong and Macau, whilst CLCR will concentrate on retail assets in Mainland China.
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