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SPH Reit to acquire Rail Mall for S$63.24m
SPH Reit has agreed to acquire The Rail Mall for S$63.24 million, in a transaction expected to be funded by a combination of debt and internal resources.
This comes three months after The Business Times reported that the Rail Mall had been put on the market.
The mall, located along Upper Bukit Timah Road, comprises 43 single-storey shop units and 95 private carpark lots. It has total net lettable area of about 50,000 square feet, and a 99-year lease which will expire in 2046.
The acquisition is in line with the Reit's strategy of acquiring retail properties that would complement its assets, namely the Paragon and The Clementi Mall, said SPH Reit Management.
The property is currently held by Pulau Properties, which is in turn owned by the Lee Foundation and members of the Lee family.
An independent valuation of the property by Edmund Tie & Company (SEA) Pte Ltd, which was appointed by the trustee, had reached a figure of S$62.9 million using the discounted cash flow approach and capitalisation approach.
The purchase consideration was arrived at on a willing-buyer willing-seller basis, said SPH Reit manager. This will be paid out in two tranches.
Five per cent of the purchase consideration will be paid to the vendor's solicitors on the execution of the sale and purchase agreement. The balance is to be paid to the vendor on completion of the acquisition which is expected to take place on June 28 this year.
Reit manager CEO Susan Leng said The Rail Mall will provide SPH Reit the opportunity to further strengthen its food and beverage offerings.
"We believe a well-curated mix of F&B concepts complemented with services will serve the immediate established Hillview and Upper Bukit Timah community well," she said in a statement. "In addition, SPH Reit will intensify community programmes leveraging on the Rail Corridor to attract a wider catchment, as it is well served by the public transport network and accessibility to expressways."
The Rail Mall came into being when Lee Rubber subsidiary Singapore Engineers in 1994 gave the 43 one-storey units a S$5 million facelift to turn it into a neighbourhood centre. The mall went through another revamp in 2008 as its management tried to position it as a food and lifestyle hub for the west. Its current tenants include Cold Storage, F&B outlets such as Toast Box and a few tuition agencies.
Units in SPH Reit closed unchanged at 99 cents on Monday, before the announcement.