THE CapitaCommercial Trust has put a call option to buy a new commercial property from CapitaLand, 1 George Street in Singapore for $S1.165 billion.
CapitaLand will also provide a yield protection to CCT, ensuring a minimum net property income of $S49.5 million per annum which translates to a net property yield of 4.25% per annum on the purchase price for five years, from the date of completion of the acquisition till 2013.
Chief executive Lynette Leong said
“More importantly, we have secured 100% committed funding despite the difficult current credit environment which is a testimony to our track record as a premier owner/manager of commercial assets and the positive outlook for the office sector.
“This acquisition will increase the net property income contribution from Grade A office assets within our portfolio from 43% currently to about 55%,” Leong added.
The acquisition will be funded 100% by debt and as a result the trust’s gearing will be increased to about 40% from the current 27%.
As this is an “Interested Party Transaction”, unitholders’ approval at an extraordinary general meeting is required for the acquisition of the property.
Leong said
The property has a 99 year lease title from January 22, 2003 – there is 94 years remaining.
The property is currently 100% occupied anchored by the Royal Bank of Scotland, WongPartnership, Borouge Pte Ltd, Lloyd’s of London (Asia) Pte Ltd and the Canadian High Commission.
Australian Property Journal
