CICT divests stake in One George Street for S$640.7 million
CAPITALAND Integrated Commercial Trust's (CICT) manager announced on Friday (Nov 12) that the trust will divest its stake in One George Street.
CapitaLand Commercial Trust (CCT) had previously sold the property for S$1.18 billion into a limited liability partnership called OGS LLP, of which the trust owned 50 per cent. The 50 per cent stake was then absorbed into CICT after CCT and CapitaLand Mall Trust merged.
On Nov 12, CICT's manager said that OGS LLP will divest its whole stake in One George Street to SG OGS, a private limited company, for S$1.28 billion, or approximately S$2,875 per square foot. CICT will receive approximately S$640.7 million, or 50 per cent of the consideration for the sale.
The exit yield is about 3.17 per cent, based on the annualised year-to-date September 2021 net property income and the consideration.
SG OGS has paid 10 per cent of the consideration, or S$128.1 million as deposit upon signing the sale and purchase agreement. The balance will be paid when the sale is completed.
CICT's manager noted that Knight Frank's valuation report put One George Street's open market value at S$1.18 billion, using the capitalisation method and the discounted cashflow method.
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The 23-storey Grade A office building is located about 400 m from Raffles Place MRT Station, and has a total net lettable area of 445,745 square feet with a committed occupancy rate of 96.9 per cent as at Sep 30, 2021. Its net property income for the first 9 months of this year was S$30.4 million on a 100 per cent interest.
OGS LLP has obtained consent from the Singapore Land Authority to proceed with the sale, which is expected to be completed in December 2021.
Post-divestment, CICT will receive approximately S$344.8 million in net proceeds, which its manager said will give it greater flexibility to repay debt, finance any capital expenditure and asset enhancement works, investments or finance general corporate and working capital requirements.
The sale is not expected to have any material effect on the net asset value per unit or distribution per unit of CICT for its financial year ended Dec 31, 2021.
CICT units rose S$0.02 or 0.9 per cent to close at S$2.17 on Friday, before the announcement was made.
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