Croesus Retail Trust acquires mall for $132.5m

It’s a large-scale retail shopping complex abroad.

Croesus Retail Trust announced its acquisition of One’s Mall in Chiba, Japan for a hefty $132.5m.

In a report by OSK-DMG, Croesus’s acquisition is a large-scale retail shopping complex with 52 tenants, across a net lettable area of approximately 52,000sqm with a 99.4% occupancy level, situated in Inage Ward, one of six wards within Chiba City and located within a suburban residential area with a high population density.

One's Mall is conveniently accessible by four railway lines including the JR Sobu Honsen Line, JR Keiyo Line, Keisei Chiba Line and the Chiba Urban Monorail, as well as having a frontage along the National Road Route 16, a major arterial road of the Chiba Prefecture, providing easy visibility and accessibility to customers by car.

CRT will fund this acquisition partly via the issue of 78.9m new shares through a private placement at SGD0.89-SGD0.92 a share, a discount of 2-5% from the adjusted volume weighted average price of SGD0.9455, raising approximately SGD71m.

The remaining will be paid with majority made up of Japanese debt and the rest from the local MTN notes. DPU is projected to increase marginally from SGD8.98 cents to SGD9 cents, even after accounting for the new shares placed. CRT has also announced an advance dividend from 1 July to 1 Sept of SGD1.66 cents, bringing total dividend given out on 10 Sept 2014 to SGD5.4 cents.

According to OSK-DMG, this acquisition is positive for CRT and its shareholders, as despite placing out new shares to fund the acquisition, it will still be yield-accretive. It also brings down gearing to 50% from 52%, giving it more debt headroom for future potential acquisitions down the road.