THE trustee of Mapletree Commercial Trust, DBS Trustee Limited, is planning to acquire Mapletree Business City's office and business park components for S$1.78 billion.
The amount represents a discount of about 2.6 per cent to the average of two independent valuations commissioned by the trustee and real estate investment trust (Reit) manager Mapletree Commercial Trust Management (MCTM). Including expenses, total acquisition cost is expected to reach about S$1.86 billion.
The purchase will be funded through a combination of debt and equity, said the Reit manager. Up to 795 million new units will be issued.
DBS Trustee has entered into a put and call option with Mapletree Business City Pte Ltd, a wholly owned subsidiary of Mapletree Investments Pte Ltd, it said on Tuesday.
Sited in the Alexandra Precinct, Mapletree Business City (Phase 1) is one of the largest integrated office and business park complexes in Singapore. It has a committed occupancy of 99 per cent, with a weighted average lease to expiry of 3.5 years.
The deal is expected to contribute a net property income yield of about 5.6 per cent without any income support, higher than the Reit's existing portfolio NPI yield of 5.1 per cent, said MCTM.
Upon completion, MCT's portfolio will rise from S$4.3 billion to S$6.1 billion.