CapitaLand Retail China Trust (CRCT) is acquiring five business park properties, and the balance 49% interest the retail mall known as Rock Square.
The acquisition follows a recent expansion in the REIT’s investment mandate.
“The first major economy to recover from the COVID-19 impact, China is showing encouraging signs of regaining growth momentum, having expanded year-on-year by 4.9% in 3Q 2020”, said Soh Kim Soon, Chairman of the REIT’s manager.
“China’s strong recovery and economic direction are expected to boost the growth of various industries, including the demand for business park space”, he added.
As at 30 September 2020, the business park properties registered committed occupancy of 91.5%.
The acquisition is based on an agreed property value of RMB4,945.0 million (SGD1,005.5 million) with an implied net property income yield of 5.8%.
CRCT intends to finance the acquisition through a mix of debt, equity, and hybrid securities which will result in distribution per unit accretion.
The acquisition is conditional upon the approval of CRCT’s independent unitholders at an extraordinary general meeting, and is expected to be completed by 1Q 2021.
Post-acquisition, business park and industrial assets will contribute to more than 40% of the gross floor area (GFA) of CRCT’s enlarged portfolio.
CRCT was last done on the SGX at SGD1.26, which implies a distribution yield of 6.6% according to data compiled on the Singapore REITs table.