Singapore’s CapitalLand is set to merge its two units CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT) to establish the third-largest commercial real estate investment trust (Reit) in the Asia-Pacific. The merged entity will be called CapitaLand Integrated Commercial Trust (CICT).
CICT will be Singapore’s largest Reit, with a market capitalisation of $12.4 billion and a combined property value of $17 billion, the media reported. Under the proposed transaction, CMT will acquire all units of CCT in the form of cash and new CMT units.
CMT has 15 malls in Singapore, while CCT is the city-state’s largest owner of office spaces. CapitalLand owns nearly 28.48 percent of CMT and 29.37 percent of CCT, the media reported.
Each CCT unitholder will receive $0.259 in cash and 0.72 new CMT units at an issue price of $2.59 each. CapitaLand Group CEO Lee Chee Koon told the media that, “This merger, upon completion, will offer investors the options to invest in three global, developed market platforms in our core asset classes, and in three specialist emerging market platforms, to suit their specific preferences and risk appetite.”
After the merger completion. CICT might be able to undertake foreign acquisitions worth up to S$4.6 billion in developed markets. Its remaining capacity will be directed toward Singapore’s real estate sector.
Currently, CapitalLand ranks the ninth largest real estate investment manager globally and first in Asia. The real estate developer’s total market value is more than $42.2 billion. However, the proposed merger might not have any materialistic impact on CapitalLand’s net tangible assets.