Dasin Retail Trust completes acquisition of 2 Chinese malls for S$344.1m

DASIN Retail Trust has completed the acquisition of the Shunde Metro Mall in Foshan city and the Tanbei Metro Mall in Zhongshan city for some S$344.1 million, its trustee-manager announced on Wednesday night. 

The acquisition cost comprises the purchase consideration of S$65.1 million in cash, the repayment of existing indebtedness of S$259 million, a S$2.4 million acquisition fee payable to the trustee-manager in Dasin Retail Trust units, as well as professional and other fees and expenses in connection with the acquisition of S$17.6 million. 

With the acquisition, the valuation of Dasin Retail Trust's portfolio has expanded by nearly three times to about 12.1 billion yuan (S$2.41 billion) from 4.6 billion yuan within three years from its listing. 

The trustee-manager is of the view that the addition of these properties will strengthen its foothold in the "fast developing Guangdong-Hong Kong-Macau Greater Bay Area and improve the performance of the portfolio".

Following the transaction, the gross floor area of the retail property trust's enlarged portfolio will increase by 31.7 per cent to a total of 793,752 square metres. 

Pro forma net property income for FY2019 will increase by 28.3 per cent to about S$77 million, up from S$60 million for its existing portfolio, its trustee-manager said.  

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Taking into account a "distribution waiver", through which major unitholders have waived a portion of their entitlement to distributions, Dasin Retail Trust's pro forma distribution per unit (DPU) for FY2019 is expected to increase to 7.20 Singapore cents from 6.82 cents.

Without the "distribution waiver", its pro forma DPU for the enlarged portfolio will increase to 4.70 Singapore cents from 3.95 cents. 

Wang Qiu, CEO of the trustee-manager, said: "We are delighted and excited to complete the acquisition of the properties, bringing our total retail malls to seven. This acquisition marks a significant milestone for Dasin Retail Trust as this is our second acquisition in a short span of three years of listing."

The acquisition of the two malls was first announced last November, with the cost estimated to be S$333 million, subject to post-completion adjustments.

In a press statement on Wednesday, the trustee-manager said the deal was financed through a combination of debt, equity financing, and internal funding.

Last month, the trust launched a private placement to raise gross proceeds of up to S$94 million to partially fund the acquisition of the malls in Guangdong province. The placement was 1.2 times subscribed at an issue price of S$0.78 per unit, the lower end of its indicative price range of S$0.78 to S$0.80 per new unit.

As at 10.49am on Thursday, units in Dasin Retail Trust were trading flat at S$0.78.