CMMT – BT Singapore

CMMT in RM310m Kuantan mall deal

CAPITALAND’S Malaysia-listed property trust, CapitaMalls Malaysia Trust (CMMT), said yesterday that it has agreed to buy East Coast Mall in Kuantan, Malaysia, for RM310 million (S$126 million). Including the acquisition fee and expenses, the total acquisition cost is about RM330 million. CMMT intends to fund the acquisition through a combination of debt and equity. This will include the proposed placement of up to 299 million new CMMT units to unidentified parties at a price that will be determined later.

Sharon Lim, chief executive of the trust’s manager, said that in addition to funding the acquisition, the share placement will increase the stock’s trading liquidity and allow CMMT to attract even more local and international institutional investors and enlarge its unitholder base.

East Coast Mall is a four-storey shopping mall with a net lettable area of more than 440,000 square feet. The mall has an occupancy rate of 97 per cent. The forecast property yield for 2011 is about 7.1 per cent. Based on CMMT’s closing price of RM1.17 on Monday, CMMT’s implied property yield for 2011 is about 6.4 per cent. Hence the acquisition is yield-accretive to CMMT unitholders, the trust said. The proposed acquisition and share placement are expected to be completed by the last quarter of 2011.

CMMT, which now has three malls in its portfolio, was listed on Bursa Malaysia in July 2010. CapitaLand owns an indirect stake of 27.3 per cent in the trust through CapitaMalls Asia.