CapitaLand Malaysia Trust (CLMT) said the proposed purchase of Queensbay Mall, one of the biggest shopping malls in Penang with a net lettable area of 883,111 sq ft, is expected to strengthen its position in the region.
CLMT is offering to buy 91.8 per cent of the strata floor area of the retail properties in Queensbay Mall in Bayan Lepas from parties related to CapitaLand Investment Limited (CLI) for RM990.50 million.
The price tag of RM990.5 million represents a decrease of about one per cent from the independent appraisal of RM1 billion commissioned by CLMT's trustee MTrustee Bhd, it told the stock exchange today.
"CLMT's market leadership in Penang will be substantially strengthened, with Gurney Plaza and Queensbay Mall anchoring the northern and southern parts of the Penang island respectively," it said.
The company is also acquiring its first logistics facility in Sungai Jawi, which it hopes to complete this quarter.
The Bursa filing states that CLMT's presence in Penang will rise to 56 per cent of the expanded portfolio's assets under management.
After the purchases of Queensbay Mall and the Sungai Jawi logistics property, assets under management will rise by around 28 per cent from RM3.8 billion to RM4.9 billion.
The purchase of Queensbay Mall is anticipated to complete in the second half of 2022, pending approval from the necessary parties.
CLMT said the mall has a respectable property yield of 7.3 per cent, raising its portfolio's overall property yield.
According to the company, this is based on Special Coral Sdn Bhd's annualised net property income for the unaudited eight-month financial period ended August 31, 2022, minus non-recurring write-backs of provision for doubtful debts.
Of the total 438 strata titles in Queensbay Mall that CLMT is purchasing, 433 are held by Special Coral, a special purpose vehicle.
The mall's remaining five strata titles are owned by indirect CLI subsidiaries.
The filing stated that 95 per cent of the mall was occupied as of October 7, 2022.
"With an average of 1.1 million footfall per month, shopper traffic is expected to improve further with the return of tourists to Penang," CLMT said.
CLMT said owning the mall will increase its profitability and provide better DPU to unitholders.
Additionally, it will raise CLMT's committed portfolio occupancy from 83.1 per cent to 85.8 per cent, the company said.
A private placement will be undertaken to fund the acquisition.
In a statement, CapitaLand Malaysia REIT Management Sdn Bhd, the manager of CLMT, said the issue price of the proposed private placement will be determined later by way of a bookbuilding process.
"As Malaysia emerges from the pandemic, this is an opportune time for CLMT to expand its portfolio of shopping malls and ride on the recovery of the country's retail sector," said Lui Chong Chee, chairman of CMRM.