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CICT divests JCube to CapitaLand Group subsidiary for $340 mil as an interested person transaction

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According to CICT, the divestment is part of its strategy to “deliver stable and sustainable returns to unitholders”.

The manager of CapitaLand Integrated Commercial Trust (CICT) has divested JCube, a mall located in Jurong Gateway, to CapitaLand Group for a consideration of $340 million on Jan 24.

CICT, on the evening of Jan 24, announced that it had entered into a sale and purchase agreement (SPA) with Tanglin R.E. Holdings in relation to the sale of the property.

Tanglin R.E. Holdings is an indirect subsidiary of the CapitaLand Group. The group itself is an indirect subsidiary of Temasek Holdings.

The consideration amount was arrived at via a bidding process conducted by an appointed property consultant. Savills Valuation and Professional Services (Savills) was commissioned by CICT’s manager, while Colliers International Consultancy & Valuation (Colliers) was hired by CICT’s trustee, HSBC Institutional Trust Services.

According to CICT, the divestment is part of its strategy to “deliver stable and sustainable returns to unitholders”.

“This includes assessments of the highest and best use of each asset, in terms of value and yield, under various market cycles. Alongside CICT’s overall portfolio investment/rebalancing plan, divestments of assets are possibilities, so that the capital could be redeployed such as being applied towards other growth opportunities or other purposes,” reads the Jan 24 filing on SGX.

Under the SPA, the mall will be sold subject to its existing tenancies and licenses.

Upon the completion of the SPA, Tanglin R.E. Holdings will grant CICT’s trustee a right of first refusal (ROFR) for 10 years if JCube is redeveloped into a new mixed use development with a commercial component, or if the mall is redeveloped into a new commercial development.

JCube has a total of five storeys, with three basement levels and a roof garden. It has a total net lettable area (NLA) of 210,038 sq ft with a 99-year leasehold with effect from March 1, 1991.

It is one of the REIT’s three malls in the Jurong East region, and the smallest by net lettable assets (NLA). The other two malls are Westgate and IMM Building.

As at Dec 31, 2021, JCube has a committed occupancy of 95.5%.

The divestment is considered an interested party transaction (IPT) as the purchaser is wholly-owned by a controlling unitholder of CICT. It is expected to be completed in the first quarter of 2022.

In a separate statement, CapitaLand Development (CLD) announced that it will continue to operate JCube while it explores “options to reposition or redevelop the mall in line with the gradual transformation of [the] Jurong Lake District”. Till then, CLD will continue to receive recurring income from the mall.

Units in CICT and shares in CLI closed at $2.01 and $3.64 respectively on Jan 24.

Photo: CapitaLand

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