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SPH Reit to buy The Rail Mall for S$63.2m
SPH Reit is planning 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.
The Rail Mall comprises 43 single-storey shop units and 95 private carpark lots. It has a total net lettable area of about 50,000 square feet, and a 99-year lease starting from March 1947.
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.
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 the Reit manager, and will be paid out in two tranches.
5 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."
Units in SPH Reit closed unchanged at 99 cents on Monday.