CapitaLand Integrated Commercial Trust (CICT) has divested 21 Collyer Quay, for $688 million.
A sale and purchase agreement (SPA) was signed with an unrelated third party on Nov 11. The divestment was completed on the same day.
Located in Raffles Place, the 21-storey prime office building has a leasehold tenure of 999 years from December 1850 and has a net lettable area (NLA) of 213,000 sq ft. One of the building’s tenants is WeWork Singapore, which has a seven-year lease for the lettable area till 2028.
According to CICT’s website, the building was purchased in 2005 for $153.9 million. As at Dec 31, 2023, the building was valued at $649 million, although Savills valued the property at $688 million as at Oct 31, using the income capitalisation method and the discounted cashflow method.
After taking into account divestment-related expenses, CICT will net $681.7 million in proceeds. The REIT says the divestment will give it “greater financial flexibility” to repay debt, finance any capital expenditure, asset enhancement works and investments, or finance general corporate and working capital requirements.
Based on the annualised net property income (NPI) for the period ended Sept 30 and the consideration, the exit yield is below 3.5%.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
Had the divestment been completed on June 30 and CICT used the net proceeds to fully repay its existing debt, the REIT’s aggregate leverage as at June 30 would have been at 38.3%, down from 39.9%.
As at 9.51am, units in CICT are trading 1 cent higher or 0.51% up at $1.98.
