Developer CapitaLand is selling its 70 per cent stake in Westgate to CapitaLand Mall Trust (CMT) for $789.6 million.
This values the entire Jurong development at $1.128 billion and translates to $2,746 per sq ft.
The sale will generate proceeds of $397.6 million in cash for CapitaLand - comprising $17.9 million in purchase consideration and $379.7 million as repayment of unitholders' loans owed by the trust holding the mall to the trustee and vendors.
The remaining portion of $392 million makes up 70 per cent of the bank loans owed by the trust.
Mr Tony Tan, chief executive of CMT's Reit manager, said in a statement: "(The proposed acquisition) enables us to recycle the capital from the sale of Sembawang Shopping Centre (which was sold for $248 million in June) into a newer asset with stronger growth potential at an entry yield of 4.3 per cent, which is in line with recent market transactions."
CapitaLand will net a gain of $99.2 million from the sale. The transaction, which is conditional on CMT unitholder approval, is expected to be completed in the fourth quarter.
CMT holds the balance 30 per cent so the deal will increase its interest in Westgate to 100 per cent.
CapitaLand president and group CEO Lim Ming Yan said: "Having achieved our annual capital recycling goal of $3 billion in (the first half of) 2018, we continue to actively seek opportunities to reconstitute our portfolio."
The developer has announced acquisition of three sites in recent months - in Sengkang Central together with City Developments, and two in China, in Guangzhou and Chongqing. They are valued at $1.65 billion in total.
Westgate had a committed occupancy of 98 per cent as at July 31. Its annual shopper traffic hit a record 49.4 million last year.
CapitaLand will continue to benefit from Westgate's stable yield after the sale through its stake in CMT. The mall will continue to be managed by CapitaLand Retail, the group's wholly owned retail operating platform.
CapitaLand shares yesterday closed up four cents to $3.40, while CMT added one cent to $2.17.
