CAPITALAND Commercial Trust (CCT) said on Monday that it would sell Wilkie Edge to Lian Beng Group and the private investment firm of Super Group's Teo family for S$280 million.
Wilkie Edge is a 12-storey integrated development comprising office and retail units as well as a serviced residence, Citadines Mount Sophia. As at March 31, 2017, Wilkie Edge had a committed occupancy rate of 99.9 per cent and contributed 3 per cent to CCT's first-quarter 2017 net property income. The top three tenants are SF Consulting Pte Ltd, Kaplan Learning Institute Pte Ltd and Tower Research Capital (Singapore) Pte Ltd. The development has a balance lease of 88 years.
The property is being sold to Lian Beng (8) Pte Ltd, a 50:50 joint venture company held equally by Lian Beng Group and Apricot Capital, which is controlled by the Teo family.
The sale price is 39.3 per cent above the valuation of Wilkie Edge as at Dec 31, 2016. Based on the total net lettable area of 154,528 square feet (sq ft), the purchase price works out to S$1,812 psf.
Ong Pang Aik, Lian Beng's executive chairman, said in a press statement: "It is our strategy to seek strategic investment to enhance our property investment portfolio, which in turn will improve our recurring income into the long term, mitigating the more cyclical nature of our other business segments."
Lynette Leong, CEO of CCT's management, said in a press statement that the sale of Wilkie Edge is in line with the trust's "portfolio reconstitution strategy" to rejuvenate its portfolio and recycle capital to give it the financial flexibility to invest in more attractive growth opportunities.
Assuming all the net proceeds from the sale is used to repay existing debt, CCT's aggregate leverage as at March 31, 2017 would decrease from 38.1 per cent to 35.7 per cent.
"Together with our recent sale of 50 per cent of One George Street, the sale proceeds will give us comfortable headroom to invest in opportunities that will continue to generate sustainable returns for our unitholders," said Ms Leong.
The sale is expected to be completed in September 2017.
Units of CCT ended at S$1.665, up half a cent, on Monday. The sale was announced after the close of market trading.
Source: Business Times, 4 Jul 2017