During a results briefing by City Developments (CDL), CEO Sherman Kwek said the group is exploring establishing a REIT listed on the Singapore Exchange for its commercial assets in UK and would most likely aim for a listing in 1Q2021. In 2018, CDL acquired 125 Old Broad Street with net lettable area 328,819 sq ft for GBP385 million and Aldgate House with NLA of 210,504 sq ft for GBP183 million in 2018.

In 2016, CDL bought Development House in Shoreditch, a six-storey office building with NLA of 28,266 sq ft for GBP37.4 mil-lion. It is being developed in to 71,700 sq ft of space of which 2,024 sq ft will be allocated for retail and 7,147sq ft will be affordable workspace.

The yield for 125 Old Broad Street is 4.8% and for Aldgate House, 4.6%. With quantitative easing expected to continue at least till 2022, a 30–40% debt to asset ratio would provide distribution per unit yields of more above 5%. Given that Elite Commercial REIT is trading at just shy of 7%, CDL could easily list its REIT with its inevitably cheaper cost of capital. In March, CDL said in a statement to the SGX that the pipeline assets had not been finalised. “We are excited to set up a REIT in Singapore as and when market conditions allow,” confirms Frank Khoo, chief investment officer at CDL. “We will be delaying the potential REIT listing; we are looking for a Q1 listing next year,” he adds.  

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