SINGAPORE (THE BUSINESS TIMES) - CapitaLand Integrated Commercial Trust (CICT) is divesting leisure and edutainment mall JCube for a consideration of $340 million, its manager announced in a bourse filing on Monday night (Jan 24).
The real estate investment trust's (Reit) manager, CapitaLand Integrated Commercial Trust Management, said HSBC Institutional Trust Services (Singapore) - in its capacity of CICT's trustee - has entered into a sale and purchase agreement with Tanglin R.E. Holdings for the sale of the property.
Tanglin R.E. Holdings is indirectly wholly owned by CapitaLand Group, which is in turn an indirectly wholly owned subsidiary of Singapore investment company Temasek. As at the date of the announcement, Temasek is a controlling shareholder of CapitaLand Integrated Commercial Trust Management and a controlling unit holder of CICT.
The sale price of $340 million represents a premium over the property's latest valuation of $278 million and $280 million by real estate consultancies Savills and Colliers respectively as at Dec 31, 2021.
JCube, which is located at 2 Jurong East Central, is one of CICT's three malls in the Jurong East region and its smallest asset by net lettable area. The other two CICT malls are Westgate and IMM Building.
As at Dec 31, 2021, JCube has a committed occupancy of 95.5 per cent and the net property income yield based on the sale price is less than 4 per cent.
CICT's manager expects net proceeds from the divestment to be about $334.7 million, resulting in an estimated net gain of about $56.7 million. It said the sale of JCube is in line with its portfolio reconstitution strategy to "unlock value" and reinvest the proceeds into other investment opportunities being assessed in Singapore.
The divestment is expected to be completed in the first quarter of 2022.
Units of CICT closed flat at $2.01 on Monday before the announcement.