CapitaLand Commercial Trust sells Twenty Anson for $516m

The sale price, arrived at through a bidding process, works out to S$2,503 per square foot of the building’s net lettable area of approximately 206,000 sq ft.
The sale price, arrived at through a bidding process, works out to S$2,503 per square foot of the building’s net lettable area of approximately 206,000 sq ft.PHOTO: CAPITALAND COMMERCIAL TRUST

SINGAPORE - CapitaLand Commercial Trust (CCT) has agreed to sell Twenty Anson, a 20-storey office building in Tanjong Pagar, to an unrelated third party for $516 million, its manager announced on Friday (June 29).

The sale price, arrived at through a bidding process, works out to $2,503 per square foot of the building's net lettable area of approximately 206,000 sq ft.

The price is also 19.2 per cent above the property's valuation of $433.0 million done on Dec 31, 2017, and 20 per cent higher than CCT's purchase price of $430.0 million in 2012.

The transaction is expected to be completed in the third quarter of this year.

The sale consideration translates to a net property yield of 2.7 per cent based on Twenty Anson's net property income of $13.8 million for the 12 months preceding March 31, 2018.

Assuming net divestment proceeds are used to repay existing debt, CCT's pro-forma aggregate leverage would drop from 37.9 per cent as at March 31 to 34.5 per cent.

Mr Kevin Chee, CEO of the CCT's manager, said: "The divestment of Twenty Anson is in line with CCT's proactive strategy to reconstitute the trust's portfolio and optimise returns for our unitholders. This transaction will unlock value and enhance the trust's financial flexibility.

"We will continue to explore opportunities to enhance our portfolio as demonstrated by our ongoing development of CapitaSpring in Singapore and acquisition of Gallileo in Frankfurt, Germany."

Upon completion of the sale, CCT's portfolio will comprise 10 properties with a total net lettable area of 4.7 million sq ft across in Singapore's CBD - Raffles Place, Marina Bay, Tanjong Pagar and City Hall - as well as the banking district in Frankfurt, Germany.

Completed in 2009, Twenty Anson has sheltered access to Tanjong Pagar MRT station. It has a total net lettable area of approximately 206,000 sq ft.

As at March 31, Twenty Anson had a committed occupancy rate of 94.3 per cent. Its top three tenants are Toyota Motor Asia Pacific Pte Ltd, BlackRock Advisors Singapore Pte Ltd and BCD Travel Asia Pacific Pte Ltd.

The building for about 3 per cent of CCT's net property income. CCT said that on a pro-forma basis, the impact of its divestment on its distributable income is expected to be neutral as loss of net property income would be offset by interest savings from loan repayment.

CCT was trading at $1.64 apiece, up one Singapore cent or 0.6 per cent, heading into the lunch break.