Two CapitaLand Reits propose merger to form third largest in Asia-Pacific

SINGAPORE  – CapitaLand on Wednesday (Jan 22) announced the proposed merger of CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) in a cash-and-stock deal that adds to the sector’s consolidation.

CMT holds a portfolio of shopping centres in Singapore, while CCT is the largest office landlord here.

The new combined entity – called CapitaLand Integrated Commercial Trust (CICT) – is expected to become the third largest real estate investment trust (Reit) in the Asia-Pacific with a market cap of about $16.8 billion, and a combined property value of about $22.9 billion. This is based on valuations of CMT’s and CCT’s properties as at Dec 31, 2019.

“As the largest S-Reit (Singapore Reit), CICT will be CapitaLand’s primary investment vehicle for commercial real estate in Singapore and other developed markets,” the company said on Wednesday.

The deal, by way of a trust scheme of arrangement, is subject to the approval of unitholders of CMT and CCT, and will see CMT acquiring all the issued units in CCT in the form of cash and new CMT units.

CapitaLand, which owns about 28.48 per cent of CMT and 29.37 per cent of CCT, is not a party to this transaction.

With the proposed merger, the CapitaLand group will have three Reits listed on the Singapore Exchange, namely CICT, Ascendas Real Estate Investment Trust and Ascott Residence Trust.

The proposed merger is not expected to have a material effect on CapitaLand’s net tangible assets, or earnings per share for the financial year ending Dec 31, 2020.

Units of CCT closed two cents or 0.9 per cent lower at $2.13 on Tuesday, while CMT units closed down two cents, or 0.8 per cent to $2.59.