Singapore-listed China-focused Forterra Trust (Forterra)(SGX:LG2U) has secured an additional 3,404 square metres (sqm) of retail space at Shanghai's Huai Hai Mall, resulting in the expansion of total gross floor area under its control in the mall from 7,620 sqm to 11,024 sqm.
|Forterra Trust secures additional mall space in Shanghai in its effort to gain a foothold in the Chinese retail market.
Forterra currently owns the basement through to level 3 of Huai Hai Mall, a 7,620 sqm 4-level retail mall fronting Huai Hai Road, Shanghai in the heart of the Central Business District. That space was acquired in July 2011.
Forterra has entered into a 20 year lease with an option at its discretion for an additional 10 years for the additional space and does not require any capital commitment for this transaction. The lease agreement provides Forterra with the right to use, redevelop and lease the additional space and such additional space will form part of the Trust's refurbishment plans for the property due to commence in 2014.
Richard David, CEO of the Manager has described the additional space as an opportunity to gain a foothold in the Chinese retail sector. "The enlarged property allows Forterra to further exploit the unique offering this property provides leveraging our signature strength in strategic asset refurbishment, repositioning and management to deliver a state-of-the-art shopping mall and ultimately to maximize our unitholder value through significant rental reversion and capital appreciation", he said.
Units of Forterra Trust are currently trading about 1.36 per cent higher on the news at S$2.24.