CapitaLand buys a second warehouse in Shah Alam for RM39.7mil
16 May 2023
CapitaLand Malaysia Trust (CLMT) has signed a sale and purchase agreement to purchase a second logistics property in Shah Alam, Selangor, for RM39.7 million.
The manager of CLMT, CapitaLand Malaysia REIT Management Sdn Bhd (CMRM), said that the price is in line with the RM40.4 million independent market appraisal.
According to a statement released yesterday, the planned transaction is anticipated to be completed in the second half of 2023.
CMRM chief executive officer Tan Choon Siang said the proposed acquisition is an extension of CLMT’s efforts to promote sustainable growth and diversify its sources of income.
“It underscores our focus on executing and delivering on our growth initiatives to capture value in the fast-growing new economy sector and capitalise on the rising demand for high-quality logistics infrastructure in prime locations,” he said.
Eight properties will make up CLMT’s portfolio after the acquisition, with logistics properties making up 9.6 per cent of the portfolio’s overall net lettable area, or roughly 4.4 million square feet.
Upon the start of the new lease in 2024, it is anticipated that its portfolio occupancy rate will increase from 89.2 per cent as of March 31, 2023, to 89.3 per cent.
According to CMRM, the latest property, located in the Hicom-Glenmarie Industrial Park will be converted into a temperature-controlled distribution hub at an anticipated cost of RM14.6 million.
Additionally, a 10-year full lease on the building has been arranged with a reputable, international retailer of high-end clothing.
The lease is set to commence in the first half of 2024 and is expected to generate an annual gross rental income of RM3.5 million, offering CLMT a stable income stream and an approximate yield of 6.5 per cent.
CMRM said that the total investment outlay of RM54.3 million, which encompasses the purchase price of RM39.7 million and the transformation cost of RM14.6 million, will be entirely financed through bank borrowings.
Post-transaction, CLMT’s proforma gearing will increase from 44.3 per cent to 44.8 per cent, which remains below the regulatory limit of 50 per cent, the trust noted.