Singapore-listed retail and office REIT, Suntec REIT (SGX:T82U), completed the divestment of Park Mall on 22 December.
Park Mall is an integrated office and home furnishing property with remaining land lease tenure of 53 years. It is situated within the Orchard Road shopping belt.
Manager for Suntec REIT, ARA Trust Management, announced in June 2015 that it was divesting the property for SGD411.8 million. Suntec REIT acquired Park Mall in 2005 for SGD245.1 million.
“The divestment is in line with Suntec REIT’s proactive approach in reviewing and evaluating asset plans of its portfolio”, said Yeo See Kiat, CEO of the REIT’s manager in June. “The divestment will also allow Suntec REIT to free up capital, providing greater financial flexibility”, he added.
In conjunction with the divestment, Suntec REIT has also set-up a joint venture company known as Park Mall Investment Limited, in which it has 30% interest, to redevelop Park Mall into a commercial development comprising two office blocks with an ancillary retail component.
“The redevelopment will unlock the underlying value of the property by further enhancing the gross floor area of the site”, said Yeo. “In addition, Suntec REIT will have the ability to own part of the redeveloped property by acquiring one office block upon completion”, he added.
Units of Suntec REIT ended the trading day 2.22% lower at the close of its trading day on the Singapore Exchange to finish at SGD1.54.