Mpact Divest Mapletree Anson 775 Mil Bid Pare Debt
Mapletree Pan Asia Commercial Trust (MPACT) has announced plans to sell Mapletree Anson for $775 million, with the proceeds being used to reduce debt. This divestment is the latest in a series of REITs and trusts offloading assets to alleviate pressure on their balance sheets.
The sale, to an unannounced third party, will generate a gain of $10 million over the property’s valuation of $765 million as of March 31. It is also $95 million above the original purchase price of $680 million in 2012. JLL acted as the exclusive advisor for the sale.
Mapletree Anson is a 19-storey office building located in the Tanjong Pagar area of the CBD, just two minutes from the Tanjong Pagar MRT station on the East-West Line. Completed in 2009, it offers 320,000 sq ft of net lettable office space on a 99-year lease from 2007. The sale is expected to generate net proceeds of $762 million and will help reduce MPACT’s aggregate leverage from 40.5% to 37.6% on a pro forma basis, allowing the REIT to increase its debt headroom from $3.2 billion to $3.9 billion.
According to CBRE, Mapletree Anson was valued at $765 million as of March 31, 2024. This sale will also improve MPACT’s adjusted interest coverage ratio from 2.9 times to 3.3 times on a pro forma basis. The divestment is expected to generate an accretion of 1.5% to FY2023-FY2024 DPU, and MPACT’s CEO, Sharon Lim, believes it will help safeguard and potentially enhance unitholder value in the future.
Lim added that this sale is a proactive step towards enhancing MPACT’s financial resilience and agility in responding to market conditions. While the divestment will result in a lower proportion of Singapore assets, with those assets remaining a cornerstone of its investment strategy, they still account for over half of the REIT’s portfolio value. MPACT’s crown jewels, VivoCity mall and Mapletree Business City, contribute 53% of its net property income and 58% of its AUM.
Norwood Grand holds a significant position in the community, situated in a prime location close to popular shopping centers. The presence of this development plays a pivotal role in boosting the local economy by promoting and supporting nearby businesses. As a result, the entire community experiences growth and development due to the ripple effect created. Moreover, these shopping centers provide employment opportunities, contributing to a flourishing economy. However, Norwood Grand does not only benefit the economy, but it also has a positive impact on the social aspect of the neighborhood. These malls act as central gathering points for residents to socialize, participate in community events, and strengthen the social fabric of the area. With its ideal location near these bustling shopping centers, Norwood Grand becomes an essential and dynamic part of the vibrant community. Norwood Grand is an integral component that naturally enhances the overall community experience.
The remaining assets are located in Hong Kong, China, and other parts of Asia, which have underperformed relative to the Singapore assets. After the completion of the transaction in July 2024, MPACT will hold 17 properties with a total AUM of $15.7 billion.
Lim says that the company’s portfolio management approach will remain agile and adaptive as they move forward. On May 30, MPACT units closed at $1.22, unchanged for the day but down 20.78% year-to-date.