Paragon REIT has completed the divestment of The Rail Mall on Aug 15. The REIT manager announced, on June 20, that it signed a sale and purchase agreement (SPA) to divest the mall for $78.5 million.
The Rail Mall is a strip mall with 43 shop units. Located adjacent to the Rail Corridor nature trail, the mall has a total net lettable area (NLA) of 49,886 sq ft.
According to the REIT manager, the net proceeds from the divestment will be used to pay off outstanding debt obligations associated with the mall. The remainder of the proceeds will be distributed entirely to the REIT’s unitholders via a special distribution of 1.85 cents per unit.
On top of Paragon REIT’s distribution per unit (DPU) of 2.32 cents for the 1HFY2024 ended June 30, the special distribution brings the REIT’s total DPU to 4.17 cents year-to-date (ytd) for the FY2024. The special distribution is expected to be paid on Oct 7.
“The completion of the divestment is in line with Paragon REIT’s strategy to proactively manage Paragon REIT’s portfolio to unlock value for our unitholders,” says Dr Leong Horn Kee, chairman of the REIT. “The board recommends a special distribution of 1.85 cents per unit to reward unitholders for their continued support.”
Units in Paragon REIT closed 0.5 cents higher or 0.58% up at 87 cents on Aug 15.
