Mixed commercial REIT CapitaLand Integrated Commercial Trust (CICT) is acquiring a stake in 79 Robinson Road, a new Grade A office building in Singapore central business district.
The asset will be acquired jointly with CapitaLand Open End Real Estate Fund (COREF), a newly established discretionary fund managed by CapitaLand Investment Limited (CLI).
The REIT and COREF will acquire 70% and 30% of the shares of the property holding company, Southernwood Property Pte Ltd (SWP), respectively.
SWP is a special purpose vehicle in which CLI has a 65% stake.
A joint venture between wholly owned subsidiaries of Mitsui & Co., Ltd. and Tokyo Tatemono Co., Ltd. holds the remaining 35%.
79 Robinson Road was completed in April 2020 with a remaining land tenure of around 45 years.
The 29-storey property has a net lettable area of 519,949 square feet and a committed occupancy of 92.9% as at 31 December 2021.
Its weighted average lease expiry (WALE) is 5.8 years.
The agreed property value is SGD1,260.0 million or SGD2,423 per square foot.
The property has a net property income (NPI) yield of 4.0%, based on pro forma annualised January 2022 NPI.
The transaction is expected to be completed in 2Q 2022.
CICT plans to fund its share of the acquisition with a combination of divestment proceeds from the sale of JCube, and debt.
Post-acquisition, CICT’s aggregate leverage would be about 41%, said the REIT.
The acquisition is expected to generate a distribution per unit accretion of 2.9%.
CICT was last done on the Singapore Exchange at SGD2.23, which presently implies a distribution yield of 4.66% according to data on the Singapore REITs table.