Croesus Retail Trust's Fuji Grand Natalie. (Photo: Croesus Retail Trust)Croesus Retail Trust's Fuji Grand Natalie. (Photo: Croesus Retail Trust)

Singapore mainboard-listed Croesus Retail Trust announced on 7 April that it has entered into an agreement with Grand Natalie Property TMK to acquire trust beneficiary interests in a retail property known as Fuji Grand Natalie for JPY3,300 million (SGD40.2 million).

The freehold property is located in Hatsukaichi City of Hiroshima Prefecture and features 31,065 square metres of net leasable area (NLA) with full occupancy from 1 master tenant and 53 subtenants.

Fuji Grand Natalie was completed in June 1999 and has a weighted average lease expiry (WALE) of 8.2 years by NLA.

According to Croesus Retail Trust, the purchase consideration is at a 6.3% discount to the independent valuation of the property of JPY3,520.0 million by C&W as at 31 March 2016.

“The acquisition of Fuji Grand Natalie will be a good fit for [Croesus Retail Trust] as all our acquisitions since our listing, are non-master leased properties, and this will allow us to balance our portfolio”, said Jim Chang, CEO and Executive Director of the REIT’s sponsor.

“Having Fuji Grand Natalie on board will provide greater income stability and another sustainable source of rental income for [Croesus Retail Trust’s] portfolio”, he added.

The acquisition will be initially funded through equity financing using a part of the proceeds from the private placement that closed in March 2016. The trust is also trying to secure a debt facility to partly fund the acquisition.

Upon acquisition, Croesus Retail Trust’s total portfolio will increase to nine properties JPY 99,750 million.

Units of Croesus Retail Trust are currently trading on the Singapore Exchange about 1.8% higher from its previous close at SGD0.825.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.