Capitaland Commercial Trust sells Wilkie Edge in Singapore
CapitaLand Commercial Trust Management Limited (CCTML or the Manager), the Manager of CapitaLand Commercial Trust (CCT or the Trust), announced that its trustee, HSBC Institutional Trust Services (Singapore) Limited has entered into a sale and purchase agreement for the sale of Wilkie Edge to Lian Beng (8) Pte. Ltd. for a sale consideration of S$280.0 million or S$1,812 per square foot (psf) based on the building’s net lettable area.
The sale is expected to be completed in September 2017. The sale consideration of S$280.0 million was negotiated on a willing-buyer and willing-seller basis. This sale consideration is 39.3% above the 31 December 2016 valuation of S$201.0 million or S$1,301 psf and 53.3% higher than its original purchase price of S$182.7 million in 2008. CCT is expected to recognise an estimated net gain of approximately S$76.0 million over the 31 December 2016 valuation. As at 31 March 2017, Wilkie Edge had a committed occupancy rate of 99.9%. Based on Wilkie Edge’s net property income of S$9.5 million for the 12 months preceding 31 March 2017 and the sale consideration, it translates to a net property yield of 3.39% per annum.
Ms Lynette Leong, CEO of CCTML said, “The sale of Wilkie Edge is in line with the Trust’s portfolio reconstitution strategy to rejuvenate its portfolio and recycle capital to give us the financial flexibility to invest in more attractive growth opportunities. Assuming all the net proceeds from the sale is used to repay existing debt, CCT’s aggregate leverage as at 31 March 2017 would decrease from 38.1% to 35.7% 1 . Together with our recent sale of 50% of One George Street, the sale proceeds will give us comfortable headroom to invest in opportunities that will continue to generate sustainable returns for our unitholders.”
Located at the junction of Wilkie Road and Selegie Road, Wilkie Edge is a 12-storey integrated development comprising office and retail units as well as a serviced residence, Citadines Mount Sophia, which is leased to Ascott Residence Trust for 96 years from 17 November 2008. The purchaser shall take over all existing rights and obligations in relation to this existing lease. In close proximity to the Dhoby Ghaut and Little India MRT interchanges as well as Bugis MRT station, Wilkie Edge is a leasehold property, with a lease expiring on 20 February 2105 with a total net lettable area of 154,528 square feet (sq ft). As at 31 March 2017, Wilkie Edge contributed 3% to CCT’s 1Q 2017 net property income. The top three tenants are SF Consulting Pte Ltd, Kaplan Learning Institute Pte Ltd and Tower Research Capital (Singapore) Pte Ltd.
Source: CapitaLand Commercial Trust