Croesus trust to acquire Japanese mall

Fuji Grand Natalie, a suburban mall in Hatsukaichi City of Hiroshima.
Fuji Grand Natalie, a suburban mall in Hatsukaichi City of Hiroshima.PHOTO: CROESUS RETAIL TRUST

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). A special-purpose vehicle set up by Croesus has entered into a sale and purchase agreement with Grand Natalie Property TMK, Croesus said in a Singapore Exchange filing yesterday.

The purchase price 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 sub-tenants. The mall has a net lettable area of 31,065 sq m and is 14 km south-west 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 also evaluating further potential retail acquisitions in Japan, "subject to completion of negotiations with the vendors and satisfactory due diligence".

The trust manager is in the process of securing debt financing in the form of Japanese bank loans or an issuance of new Japanese onshore five-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.

The units closed up 1.5 cents at 82.5 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on April 08, 2016, with the headline 'Croesus trust to acquire Japanese mall'. Print Edition | Subscribe