CapitaLand Commercial Trust to acquire remaining 60% of CapitaGreen for $393m

CapitaLand Limited is proposing to divest its half-share in MSO Trust, a special purpose sub-trust which holds office tower CapitaGreen (pictured).
CapitaLand Limited is proposing to divest its half-share in MSO Trust, a special purpose sub-trust which holds office tower CapitaGreen (pictured). PHOTO: CAPITALAND

SINGAPORE - Capitaland Commercial Trust (CCT) is acquiring the the 60 per cent of office tower CapitaGreen that it does not already own for about S$393 million.

It said the proposed acquisition will augment its portfolio income and strengthen its foothold in Singapore's Central Business District.

The total purchase outlay comprises a purchase consideration of S$183.4 million, S$198.5 million of existing unitholders' loans and accrued interest, and S$11.1 million in related fees and expenses.

It will be funded through borrowings from committed bank facilities, said CCT's manager in a filing to the Singapore Exchange on Monday (May 23).

CapitaLand said separately it will divest its half-share in MSO Trust, a special purpose sub-trust which holds CapitaGreen, to CCT, its indirect wholly-owned subsidiary, as part of its its capital recycling strategy.

CCT, which already holds a 40-per cent stake in MSO Trust, also proposes to acquire the the remaining 10-per cent interest owned by Mitsubishi Estate Asia Pte Ltd (MEA).

CCT will exercise a call option to acquire the stakes.

The call option is part of a joint venture agreement signed in 2011 and is conditional on market valuation being equal to or above the hurdle price of S$1.59 billion, CapitaLand said in a filing to the Singapore Exchange on Monday (May 23).

The proposed divestment is based on CapitaGreen's agreed market value of S$1.6 billion (S$2,276 psf), which is the average of two independent valuations, said CapitaLand.

Based on the latest market valuation determined by the two independent valuers, CapitaLand said it will be realising a gain of approximately S$196.0 million, comprising S$8.5 million from the divestment as well as cumulative revaluation gain of approximately S$187.5 million recognised between 2013 and 2015.

Said Mr Lim Ming Yan, president and group CEO of CapitaLand: "The proposed divestment of CapitaLand's 50 per cent interest in CapitaGreen is part of our robust capital recycling strategy which enables us to realise development gains and enhance financial flexibility to redeploy capital to ventures that will generate returns for our shareholders."

Completed in December 2014, CapitaGreen is a Grade A premium office tower developed on the site of the former Market Street Car Park. It is located in the heart of Singapore's Central Business District (CBD) near the Raffles Place and Telok Ayer MRT stations.

Designed by Pritzker Prize winner Toyo Ito, CapitaGreen has garnered many local and international awards for its environmentally sustainable and inclusive design.

The building, which has a net lettable area (NLA) of approximately 703,000 sq ft, is 92.8 per cent occupied as of March 31.