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CapitaLand’s divestments under spotlight after Ascendas-Singbridge acquisition

Uma Devi & Ben Paul
Uma Devi & Ben Paul7/19/2019 07:30 AM GMT+08  • 6 min read
CapitaLand’s divestments under spotlight after Ascendas-Singbridge acquisition
SINGAPORE (July 22): CapitaLand has announced total divestments of some $3.46 billion this year, exceeding its annual target of at least $3 billion. These include sales to third parties as well as the group’s real estate investment trusts (REITs) and fu
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SINGAPORE (July 22): CapitaLand has announced total divestments of some $3.46 billion this year, exceeding its annual target of at least $3 billion. These include sales to third parties as well as the group’s real estate investment trusts (REITs) and funds.

The group provided this piece of information this past week in a statement related to the sale of an 89.8% interest in Main Airport Centre to CapitaLand Commercial Trust. MAC is a freehold office building in Frankfurt, Germany. It is being valued at €265.0 million ($407.8 million) on a 100% basis in the transaction. Post-transaction, CapitaLand will still hold a 5.1% stake in the property, while CCT will own 94.9%. CCT’s total outlay in this transaction is estimated at €253.4 million. CCT said it expected the acquisition to be accretive to its distributions per unit.

Transactions such as these are an integral part of CapitaLand’s strategy of developing and investing in commercial properties, growing and stabilising the income they generate, and then offloading them to its REITs and funds or third parties to free up capital for new developments and investments offering higher returns. Now, as the group works to bring down its elevated gearing following its acquisition of Ascendas-Singbridge, which was completed on June 30, the pace and manner in which it offloads assets from its books are likely to be closely watched by the market.

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