Paragon Reit to sell The Rail Mall for $78.5 million
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The buyer is understood to be a private investor.
PHOTO: LIANHE ZAOBAO
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SINGAPORE - Paragon Real Estate Investment Trust (Reit) has entered into a sale-and-purchase agreement for the divestment of The Rail Mall for a cash consideration of $78.5 million.
The Reit manager said in a bourse filing on June 20 that the price was arrived at on a willing-buyer, willing-seller basis, taking into account the projected net property income of the mall, the retail market outlook and the property yield.
The buyer was not named in the announcement, but The Business Times previously reported that it understood it to be a private investor.
The divestment, expected to be completed in the second half of 2024, is part of the Reit manager’s portfolio management strategy and “in line with its objective to unlock value in Paragon Reit’s portfolio”. It is not expected to have a material impact on the Reit’s net asset value and distribution per unit for the financial year ending Dec 31, 2024.
Proceeds from the divestment will be used to pare down outstanding debt obligations, finance potential acquisitions and asset-enhancement initiatives, and/or make distributions to unit holders, said the manager.
The Rail Mall, located in Upper Bukit Timah Road, has nearly 50,000 sq ft of net lettable area, and sits on a site sold by the state with a 99-year leasehold tenure from March 1947.
This leaves a balance of 21 years and eight months. The property was valued at $62 million as at Dec 31, 2023.
Paragon Reit’s portfolio includes the Paragon in Orchard Road and The Clementi Mall in Singapore.
It also has a 50 per cent freehold interest in Westfield Marion Shopping Centre and an 85 per cent interest in Figtree Grove Shopping Centre, both in Australia.
The units of Paragon Reit ended on Thursday up 0.6 per cent at 84 cents, before the announcement. THE BUSINESS TIMES
