CMT's Hougang Plaza sells for S$119.1m

CapitaMall Trust expects an approximate net gain of S$83.8m from the sales.

In a press release, CapitaMall Trust Management Ltd., the manager of CapitaMall Trust, announced that CMT, through its trustee, HSBC Institutional Trust Services Ltd. in Singapore, has entered into an agreement to sell its property, Hougang Plaza, to Oxley Bloom Pte. Ltd. for a total consideration of approximately S$119.1 million.

Located in Hougang Central, Hougang Plaza is sited on land with a lease expiring on or about 28 February 2090. It is a three-storey shopping mall with a net lettable area of 75,353 square feet. The mall has a committed occupancy of 100% as at 31 March 2012, and contributed about 0.5% to the net property income of CMT Group for the first quarter ended 31 March 2012. Its major tenants include Kopitiam, Furniture & Furnishings, K Box and Cold Storage.

CMT acquired 96.7% of Hougang Plaza’s strata area in 2005 and the remaining 3.3% in 2006 for a total of S$49.1 million. Based on the latest independent valuation as at 31 December 2011, the property is valued at S$34 million. CMT will realise a net gain of approximately S$83.8 million from the sale of Hougang Plaza after taking into account the divestment fee and other divestment related expenses.

Mr Simon Ho, CEO of CMTML, said, “After reviewing all options for Hougang Plaza, we believe that a sale of the asset would unlock higher value for our unitholders. If we had opted to retain the asset, we would have to commit significant capital expenditure over the next few years to maintain the mall. The net sale proceeds of approximately S$117.8 million will provide CMT with greater financial flexibility for refinancing or to take advantage of any good acquisition opportunities.”

The sale of Hougang Plaza is expected to be completed on or about 13 June 2012. Upon completion of this transaction, CMT will have a portfolio of 15 operational shopping malls in Singapore valued at approximately S$7.8 billion.