How will the redevelopment of Golden Shoe Car Park be funded?

One way is through divestment proceeds of CCT.

The much-anticipated Golden Shoe Car Park (GSCP) redevelopment will be funded through divestment proceeds and debt.

According to UOB Kay Hian analyst Vikrant Pandey, about 60% of the funding the redevelopment of GSCP, or about $491.4m, will come from debt. On the other hand, the remaining 40%, or about $327.6m, will be adequately funded by divestments and the potential conversion of its convertible bonds of CapitaLand Commercial Trust (CCT)

To recall, the GSCP redevelopment involves three parties: CapitaLand, CCT, and Mitsubishi Estate (MEC), with the first two holding 45% each whilst the latter will hold the remaining 10%. The JV will acquire GSCP from CCT for $116.1m, which is 10% above the average valuation of the property with redevelopment potential.

CCT's divestment gains from One George Street and GSCP are $79.7m and $73.9m, respectively, and this will be use to fund the redevelopment project.

As part of the JV, CCT has a 5-year call option over the entire office component of the property, including the units held in a trust by Capitaland and MEC.

"Following the expiry of the option, CCT and Capitaland have the right to drag-along MEC’s office units for any sale, transfer or disposal with the units held by CCT or Capitaland," Pandey explained.

The analyst furthered, "CCT and Capitaland hold similar drag-along rights for MEC’s serviced residence units. These above options and rights would allow CCT to acquire and dispose of properties as needed."