Croesus Retail Trust to buy suburban mall in Japan for $40m

SINGAPORE - Croesus Retail Trust plans to acquire Fuji Grand Natalie, a suburban mall in Hatsukaichi City of Hiroshima for 3.3 billion yen (S$40.2 million).

Croesus has, through a special purpose vehicle, entered into a purchase and sale agreement with Grand Natalie Property TMK, Croesus said in a Singapore Exchange filing on Thursday (April 7).

The purchase consideration represents a 6.3 per cent discount to the property's 3.52 billion yen valuation.

Fuji Grand Natalie is a freehold mall completed in June 1999 with retail chain Fuji Co as its anchor tenant and 53 other sub-tenants.

The mall has a net lettable area of 31,065sqm and is located 14km southwest of Hiroshima City and about 30 minutes away by car.

The acquisition is expected to cost about 3.63 billion yen, after fees and taxes.

Croesus added that it is currently also evaluating further potential acquisitions of income-producing retail assets located in Japan, "subject to completion of negotiations with the vendors and satisfactory due diligence".

As such, the trust manager is in the process of securing debt financing in the form of a Japanese local bank loan and/or an issuance of new Japanese onshore 5-year specified bonds.

For illustrative purposes only, Croesus said that if Fuji Grand Natalie had been held by the trust for the 2015 financial year, its pro forma net property income yield would have been about 6.3 per cent, with a distribution per unit (DPU) of about 7.80 Singapore cents.

The trust's actual net property income yield was 5.5 per cent, and the existing portfolio's pro forma DPU was 7.66 Singapore cents.