Deal will be financed by proposed private placement of units priced at S$0.597 to S$0.616 each
[SINGAPORE] The manager of Lendlease Global Commercial Real Estate Investment Trust (Reit) said on Wednesday (Nov 5) that it has signed an agreement to acquire the remaining 70 per cent of PLQ Mall that it does not own for S$246.8 million.
The vendor is understood to be sovereign wealth fund Abu Dhabi Investment Authority.
In a related statement, the Reit said the proposed transaction will be fully financed via S$270 million to be raised from a private placement of units priced at S$0.597 to S$0.616 each.
The issue price range represents a discount of between about 3.5 per cent and 6.5 per cent to the volume weighted average price of S$0.6386 per unit in Lendlease Reit.
The cost of the deal is largely made of a total equity consideration of S$234.3 million. The acquisition fee payable to the manager is around S$6.2 million, and other acquisition-related fees and expenses are valued at approximately S$6.3 million.
The agreed property value of PLQ Mall is at S$885 million, at an approximate 2.1 per cent of S$19 million discount to the appraised value.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The net property income yield is 4.5 per cent, based on the agreed property value.
Post-acquisition and completion of the Jem Office Divestment by Nov 12, Lendlease Reit’s total asset value will increase to S$3.9 billion, with Singapore representing 89 per cent of its portfolio. Gearing will also be 38.3 per cent on a pro forma basis, while distribution per unit is expected to increase by 2.5 per cent.
The manager said the enlarged portfolio will be well-positioned to deliver consistent growth, with the proportion of essential services expected to rise from approximately 57.7 per cent to 59.9 per cent of the retail gross rental income.
SEE ALSO
In addition, the suburban retail component will expand to 62.7 per cent, supported by consumer demand for essential services and the stable, recurring income generated by well-allocated suburban malls.
Units of Lendlease Reit closed on Tuesday 2.3 per cent or S$0.015 down at S$0.635.
