CapitaLand to sell The Star Vista for S$296m

Singapore

CAPITALAND is selling its stake in a mall to the partner with whom it had jointly developed the property.

The mainboard-listed company said in a statement on Wednesday that it will sell The Star Vista to Rock Productions, the business arm of New Creation Church (NCC) for S$296 million.

The Star Vista, which is the retail portion of the integrated development, was valued at S$262 million as at June 30, 2019.

The divestment is targeted to be completed by the end of the year and is expected to generate for CapitaLand net proceeds of some S$145 million and a net gain of about S$32 million.

"The divestment of The Star Vista is in line with CapitaLand's active and disciplined asset recycling strategy," said Jason Leow, president of CapitaLand Group (Singapore & International).

Year to date, CapitaLand has divested close to S$5.7 billion worth of assets, exceeding its annual target divestment of S$3 billion.

The proceeds from these divestments will "enhance CapitaLand's financial flexibility to seize new growth opportunities", said Mr Leow.

In a separate statement, NCC disclosed that CapitaLand had "shared that there were parties interested in buying The Star Vista and engaged us to discuss the possibility of us acquiring The Star Vista". It understood that CapitaLand had also initiated a sale process for the mall.

"Given that The Star Vista and The Star PAC are inextricably linked, our immediate objective of acquiring The Star Vista is both to protect the interest of the church and to preserve the good experience for all who come to The Star PAC," said NCC council chairman Yong Chee Ram.

Rock Productions owns The Star Performing Arts Centre (PAC) that is co-located with The Star Vista.

The Star PAC serves as a place of worship on service days for NCC. It is also used for concerts, comedy shows and corporate events.

Mr Yong noted that The Star Vista is expected to generate "healthy returns" for Rock Productions. The group is also exploring the possibility of having CapitaLand continue operating and managing the retail mall on its behalf.

"Our experience with CapitaLand as the project manager for the development of The Star PAC, and as the owner and operator of The Star Vista, has been positive over the years," said Mr Yong.

The S$296 million price tag was valued by Savills Singapore as at Oct 30, 2019. Located in Buona Vista, The Star Vista is part of a 15-storey integrated development which also includes a 5,000-seat auditorium.

CapitaLand shares fell two cents to S$3.66 on Wednesday. The sale was announced after market close.