MAPLETREE Pan Asia Commercial Trust (MPACT) is divesting Mapletree Anson, a 19-storey office building in Tanjong Pagar, for S$775 million.
The Reit’s trustee, DBS Trustee, has entered into a put and call option agreement with an unrelated third-party buyer for the proposed divestment of the property at 60 Anson Road. Completed in July 2009, Mapletree Anson offers over 320,000 square feet of lettable area.
As at Mar 31, 2024, the property was valued at S$765 million by independent valuer CBRE based on the income capitalisation method and discounted cash flow analysis method.
The divestment consideration of S$775 million represents a gain of S$10 million – or 1.3 per cent – over Mapletree Anson’s book value and valuation. The consideration is also 14 per cent higher than the original purchase price of S$680 million that MPACT paid for the property back in 2013.
This divestment consideration results in an estimated gain on disposal of about S$3.8 million. The price was negotiated on a willing-buyer and willing-seller basis after taking into account the property’s independent valuation.
The manager of MPACT said the divestment of Mapletree Anson – which is a non-core asset – is part of the Reit’s ongoing strategy to “rationalise and optimise the portfolio”.
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“The manager believes that the divestment will benefit unitholders as it is a proactive and carefully calculated step to enhance MPACT’s capital structure and financial resilience, taking into account prevailing market conditions,” it said.
The manager intends to use net proceeds from the divestment towards debt reduction. This is expected to strengthen MPACT’s capital structure and financial resilience by lowering its aggregate leverage ratio from 40.5 per cent (as at Mar 31, 2024) to 37.6 per cent on a pro forma basis.
It also expects this to enhance the Reit’s adjusted interest coverage ratio from 2.9 times for FY2023 / 2024 to 3.3 times on a pro-forma basis, as well as expand its debt headroom from about S$3.2 billion (as at Mar 31, 2024) to about S$3.9 billion on a pro-forma basis.
Lastly, the divestment is expected to deliver about 1.5 per cent of accretion to distribution per unit in MPACT for FY2023 / 2024 on a pro-forma basis.
“The strengthened capital structure would position favourably MPACT to safeguard and potentially enhance unitholders’ value,” said the manager. “It also provides MPACT with greater financial flexibility for future manoeuvres.”
For the financial year ended Mar 31, 2024, Mapletree Anson yielded gross revenue of S$37.2 million and net property income (NPI) of S$29.3 million. It is expected to have a NPI yield of 3.8 per cent for the financial year, based on the divestment consideration.
The property has a committed occupancy rate of 100 per cent and a weighted average lease expiry by gross rental income of 3.8 years. It currently has 23 leases and 17 tenants.
Upon completion of the divestment, MPACT’s portfolio will comprise 17 commercial properties located across five markets in Asia.
Units of MPACT closed flat at S$1.22 on Thursday, before the announcement.
