CapitaLand China Trust (CLCT) said on Monday it will sell CapitaMall Yuhuating in Changsha to CapitaLand Commercial C-REIT (CLCR) for 813.8 million yuan ($112.6 million), marking a strategic move to recycle capital and invest in China’s nascent C-REIT market.
The transaction price represents an 8.8% premium to the floor valuation of 748 million yuan and a 3.7% premium to the mall’s end-2024 valuation of 785 million yuan. The exit yield was estimated at about 6.2%, the trust said.
CLCT will reinvest in the new vehicle, subscribing to a 5% strategic stake in CLCR at the IPO price of 5.718 yuan per unit. After accounting for the subscription and related costs, net proceeds from the divestment are expected to be 663.4 million yuan. CLCT said applying the proceeds to pare down debt would cut its aggregate leverage to 41.2% from 42.6% as of March 31.
The move will allow CLCT to sharpen its portfolio focus while supporting the launch of CLCR, which will become China’s first international-sponsored retail C-REIT when listed. CLCR’s initial assets will include CapitaMall Yuhuating and CapitaMall SKY+ in Guangzhou. CapitaLand Investment, CapitaLand Development and CLCT will jointly hold at least 20% of the new vehicle.
CapitaMall Yuhuating is an established community mall in Changsha’s Yuhua District, serving nearby residential and office clusters and accessible via two subway lines.
CLCT, backed by CapitaLand Investment, manages a diversified portfolio of retail, business park and logistics assets in China. Chief Executive Gerry Chan said the divestment and reinvestment strategy aligns with the trust’s long-term goal of enhancing portfolio quality while leveraging China’s evolving consumer and innovation-driven economy.
Business News Asia
