CapitaLand Commercial C-Reit sets Shanghai IPO offering at 2.29 billion yuan, up 7% from earlier estimate
CapitaLand China Trust to divest CapitaMall Yuhuating to the Reit at 8.8% premium, and subscribe for 5% of the IPO units
[SINGAPORE] CapitaLand China Trust (CLCT) will subscribe for 5 per cent of the 2.29 billion yuan (S$410.9 million) offering in the listing of a Shanghai unit.
Its manager said in an announcement on Monday (Sep 8) that the offer size has been finalised at a 7 per cent premium over the previously estimated 2.14 billion yuan. It also gave details of the accompanying injection of CapitaMall Yuhuating in Changsha into CapitaLand Commercial C-Reit (CLCR).
The announcement follows approval from the China Securities Regulatory Commission to list CLCR in the country’s second-largest city.
Based on the final initial public offering (IPO) unit price, the price for the divestment of CapitaMall Yuhuating in Changsha to CLCR is 813.8 million yuan, about an 8.8 per cent premium over the floor price of 748 million yuan, and about a 3.7 per cent premium over the valuation as at the end of 2024.
Its exit yield is about 6.2 per cent based on CapitaMall Yuhuating’s actual net property income for 2024 of 50.7 million yuan. The net proceeds from the proposed divestment will thus be about 663.4 million yuan.
About 47.9 million IPO units will be offered to the public on Tuesday and CLCR’s listing is expected to take place by the fourth quarter of 2025.
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CapitaMall SKY+ in Guangzhou is also expected to make up the initial portfolio of CLCR.
“(CLCR) provides a platform to unlock value from our mature assets, bolstering our financial flexibility to pursue income diversification and enhance portfolio quality,” said Gerry Chan, chief executive officer of CLCT’s manager. “CLCT’s investment mandate covers the Greater China region, including Hong Kong and Macau, whereas CLCR will concentrate exclusively on mainland China.”
In total, CapitaLand Investment (CLI), CLCT and CapitaLand Development are expected to hold at least 20 per cent of CLCR.
Assuming the net proceeds are used to pare down debt, CLCT’s aggregate leverage is expected to fall from 42.6 per cent as at Mar 31, 2025, to 41.2 per cent. Net asset value per unit is set to inch up from S$1.09 to S$1.11, assuming the net proceeds are used for unit buybacks and to pare down debt.
Units of CLCT closed on Friday at S$0.77, 0.7 per cent or S$0.005 down; shares of CLI ended 0.7 per cent or S$0.02 up at S$2.77.
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