Metro Group invests in slew of sectors to ensure resilience

MAINBOARD-listed property investment and development group Metro Holdings on Friday (Oct 22) evening announced a series of investments across key markets in Australia, Singapore and Indonesia to stay resilient.

In Australia, Metro will acquire Cherrybrook Village Shopping Centre in New South Wales with its joint venture partner, the Sim Lian Group of Companies for approximately A$132.8 million (S$133.9 million).

Located 30 km north-west of the Sydney central business district, the 29,540 square metre freehold property has a total net lettable area of 9,381 sq m and about 441 car park spaces.

The shopping centre has a committed occupancy of 98.4 per cent as at Sep 30 and a weighted average lease expiry (WALE) of 3.1 years by income, anchored by retail establishments, a Woolworths supermarket, Martelli's Fruit Market and 51 speciality tenants.

Post acquisition, Metro and Sim Lian will hold 16 freehold properties, comprising 4 office buildings and 12 retail centres across New South Wales, Victoria, Queensland and Western Australia. The properties will have a total appraised value of about A$1.07 billion and have an average occupancy rate of 95.2 per cent with a WALE of 6.5 years by income.

Following the acquisition, Metro also increased its equity stake by taking an additional 10 per cent for the entire Australian portfolio of 16 properties and the asset management company Sim Lian-Metro Capital, bringing its total shareholding to 30 per cent, with Sim Lian owning the remainder.

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Group chief executive officer Yip Hoong Mun said that the acquisition was a "logical step" to grow the group's stable and recurring income, and that the increase in equity stake signifies its confidence in its partnership with Sim Lian.

In Singapore, Metro acquired 351 Braddell Road via the Boustead Industrial Fund (BIF), whose sponsor is Boustead Projects.

Boustead Projects announced on Friday that it had divested the property to BIF for S$121 million. As the property is held under joint venture between the company and a wholly-owned subsidiary of The Platform-Hanwha ARESF Fund No 1, Boustead Projects will receive a share of S$60.5 million from the transaction.

Metro subscribed to 26 per cent of both the units in BIF as well as 7.0 per cent notes due 2031 in the fund for a total investment amount of S$17.58 million.

The high-spec industrial property, which is located close to Braddell MRT station, obtained its temporary occupation permit in March 2021 and has a remaining land tenure of 27 years. It has a net lettable area of 236,864 square feet and an existing WALE of 4.1 years, with tenants that include NETS, Secretlab and Electrolux.

Metro had earlier entered the real estate market on Dec 31, 2020 with its initial acquisition of 14 assets including 6 industrial, 1 business park, 4 high-spec industrial and 3 logistics properties. Taking the acquisition into account, the 15 properties will have a committed average occupancy of 97.2 per cent, a WALE of approximately 6.4 years and an average lease tenure of 32 years.

Said Yip: "With strong global manufacturing investment interest and healthy sustained demand, Singapore industrial rents should increase in line with the recovering economy."

Furthermore, Metro is engaging CapitaLand Investments member The Ascott to manage more than 200 units across 2 floors of student accommodation and 3 floors of corporate leases that are part of the M+ service residences in Trans Park Bekasi, Jakarta.

Metro owns 90 per cent of Trans Park Bekasi, while Lee Kim Tah Group owns the remainder. It consists of 5 32-storey residential towers with 5,660 units, and all 5 towers have topped-off.

Metro Group shares closed down 2 per cent or S$0.015 at S$0.735 before the announcements were made on Friday.