CapitaLand Retail China Trust's Galleria, Chengdu. (Photo: CapitaLand Retail China Trust)CapitaLand Retail China Trust's Galleria, Chengdu. (Photo: CapitaLand Retail China Trust)

CapitaLand China Retail Trust has entered into a sale and purchase agreement to acquire a shopping mall in Chengdu for RMB1,500 million (SGD305 million).

The property, currently known as Galleria, Chengdu, has been valued at RMB1,520 million (SGD309 million) by Savills Valuation & Professional Services as at 26 July 2016. Including acquisition related expenses, the acquisition will cost RMB1,527 million (SGD310.4 million).

The six-storey mall has a current net property income (NPI) yield of about 5.4% and the acquisition is expected to be distribution per unit (DPU) accretive, said the Singapore-listed retail REIT in a statement on 19 August.

The property features a net lettable area (NLA) of 34,736 square metres is 100% occupied with 167 leases including anchor tenants Golden Harvest, H&M, Nike, Starbucks, Swarovski, and UNIQLO.

CapitaLand China Retail Trust will fund the acquisition via a combination of existing cash and additional debt. Post-acquisition, the REIT’s gearing ratio is expected to increase to about 37%. The acquisition is expected to be completed by the end of 2016.

Units of CapitaLand China Retail Trust last traded on the Singapore Exchange at SGD1.60.

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.