SINGAPORE (THE BUSINESS TIMES) - The manager of BHG Retail Real Estate Investment Trust (Reit) has proposed to acquire Badaling Outlets, an outlet mall located in Beijing, for a purchase price of $455 million.

The proposed acquisition would be the Reit's first investment in an outlet mall, the manager said on Tuesday (Dec 3) in a regulatory filing.

Badaling Outlets consists of 14 buildings, has a gross floor area of around 58,348 square metres (sq m), a net lettable area of around 38,797 sq m and a site area of 128,690 sq m.

The land use right of the outlet mall, which was completed in 2014, will expire on Sept 24, 2037.

The Reit's trustee DBS Trustee Limited has entered into a conditional share purchase agreement with vendor Horizon Thrive International to acquire all shares in Premier Outlets Investment.

Under this share purchase agreement, the manager has proposed to issue up to 260 million new BHG Retail Reit units to satisfy part of the purchase price.

Premier Outlets Investment holds Beijing Badaling Outlets Co, which owns the outlet mall. Horizon Thrive International is wholly-owned by Chang Dingjie, a director of Beijing Hualian Group Investment Holding Co, the Reit's sponsor.

The total acquisition cost of $471.9 million comprises the purchase price, payable partly in cash of $260 million, and partly with an issuance of up to 260.0 million new units in BHG Retail Reit to the vendor.

Estimated professional and other fees and expenses incurred or to be incurred is about $16.9 million.

Unitholder approval at an extraordinary general meeting is required for the purchase of the shares in Premier, the issuing of the new units to the vendor, and other matters in connection with the deal which requires unitholder approval.

BHG Retail Reit units last traded flat at $0.695 on Nov 29.