They will be listed in a property trust on Bursa Malaysia
CAPITAMALLS Asia plans to list its three Malaysian malls, worth nearly $1 billion, in a property trust on Malaysia's main bourse - raising as much as RM995 million (S$426 million) in the process.
In a statement yesterday, it said that it has received approval from the Securities Commission of Malaysia to list CapitaMalls Malaysia Trust (CMMT).
The newly spun-off company will be listed on the main market of Bursa Malaysia.
CMMT will be Malaysia's largest listed 'pure-play' shopping mall real estate investment trust (Reit) by market and property value if the listing goes ahead.
CapitaMalls Asia will offer 786.52 million units, and retain a stake of 41.74 per cent in CMMT.
If an over-allotment option of up to 15 per cent of the proposed offering - or 117.98 million units - is exercised, it will retain a stake of 33 per cent.
CapitaMalls Asia will hold 70 per cent of the Reit manager post-listing.
CapitaMalls Asia said the Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors to buy 90 million units at RM1.10 a unit or the institutional price, whichever is lower. At this price, the estimated distribution yield is 6.5 per cent for the eight-month period ending December this year and 6.8 per cent for next year.
The company said its decision to proceed with the listing depends on a number of factors. It has yet to price the offering.
Still, the listing could raise as much as RM995 million based on the cornerstone investors' price.
The trust will hold the firm's Malaysian malls: Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. This initial portfolio has a total net lettable area of about 1.88 million sq ft and is valued at about RM2.13 billion.
Some Malaysians have written off The Mines as a viable mall. But CapitaMalls Asia said it has introduced many changes and created an extra net lettable area of some 80,000 sq ft in the mall, with higher average rents and occupancy as a result.
Malaysia is a 'key growth market' apart from Singapore and China, said CapitaMalls Asia chief executive Lim Beng Chee.
He said there will be good opportunities for growth as the retail market there is fragmented.
Most of its rivals are owners of single malls.
CapitaMalls will be able to 'recycle' cash of some $200 million from the listing to acquire assets, Mr Lim said.
CMMT will be given a right of first refusal over retail properties in Malaysia that CapitaMalls Asia targets for acquisition.
This includes the Gurney Plaza Extension which would bump up its asset size by 11 per cent to 12 per cent.
CapitaMalls Asia plans to have a Malaysian retail property fund to acquire and/or develop retail property, primarily malls in Malaysia.
Yesterday, CapitaMalls Asia closed unchanged at $2.10.
Source: Straits Times, 12 Jun 2010