SINGAPORE - The trustee of Mapletree Commercial Trust (MCT), has entered into a put and call option to acquire the office and business park components of Mapletree Business City (Phase 1) from Mapletree Business City Pte Ltd, a wholly-owned subsidiary of Mapletree Investments Pte Ltd, for S$1.78 billion.
The acquisition involves the purchase of the strata leasehold interest of an office tower and three business park blocks, with a total net lettable area of over 1.7 million square feet.
The purchase price represents a discount of approximately 2.6 per cent to the average of two independent valuations conducted by Knight Frank and DTZ Debenham Tie Leung (SEA).
Including acquisition-related expenses, the total cost is expected to be approximately S$1.86 billion.
The manager of MCT said in an announcement on Tuesday (July 5) that it intends to fund the acquisition with a combination of debt and equity.
Mapletree Business City (Phase 1) is located in Alexandra, along Pasir Panjang Road. It has a a committed occupancy of 99 per cent with a weighted average lease to expiry of 3.5 years.
MCT's manager said the acquisition is expected to contribute a net property income (NPI) yield of approximately 5.6 per cent without any income support, which is higher than the existing portfolio's NPI yield of approximately 5.1 per cent. The acquisition is further expected to add to MCT's distribution per unit and net asset value.
Said Ms Sharon Lim, chief executive officer of the Reit's manager: "The addition of the property will increase our NPI and further enhance MCT's tenant and income diversification. Upon the successful completion of the acquisition, MCT's asset size will increase from the current S$4.3 billion to S$6.1 billion, reinforcing our position as a leading commercial Reit in Singapore."
The deal is subject to approvals from MCT's unitholders at an extraordinary general meeting to be held on July 25 and a successful equity fund raising.