CapitaLand Malaysia Trust (CLMT) is divesting the office tower of its 3 Damansara asset for MYR52 million.

The asset is being sold to Lagenda Harta Sdn Bhd, a wholly owned subsidiary of Lagenda Properties Berhad.

The office tower is part of the 3 Damansara integrated development that was acquired by the REIT in 2015.

The sale consideration of MYR52 million represents a 4.0% premium to the asset’s latest independent valuation of MYR50.0 million as at 31 July 2023.

The proposed divestment is not expected to have any material impact on the REIT’s net asset value and distribution per unit for the financial year ending 31 December 2023.

The net proceeds after divestment costs are approximately MYR50.5 million and will be used to repay existing borrowings.

If the net proceeds were used to repay CLMT’s borrowings as at 30 June 2023, the REIT’s gearing ratio will be reduced from 44.1% to approximately 43.5%, it said.

“CLMT’s maiden divestment is in line with our ongoing portfolio reconstitution strategy and we have decided to monetise this non-core office asset to improve the quality of our portfolio”, said Tan Choon Siang, CEO of the REIT’s manager.

“The proceeds from this divestment will provide us with financial flexibility to enhance our portfolio diversification efforts and pursue higher yielding opportunities in the new economy sectors”, he added.

It is expected to be completed by 1Q 2024.

Upon completion, CLMT will own eight properties in Malaysia, comprising six retail and two logistics properties strategically located across three key urban centres in Penang, Klang Valley and Pahang.

The REIT was last done on the Bursa Malaysia at MYR0.54.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.