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Singapore’s largest commercial REIT by market capitalisation, CapitaLand Commercial Trust (CCT or Trust), is expanding its footprint beyond Asia for the first time. With CapitaLand Limited, CCT is acquiring a freehold Grade A commercial property, known as Gallileo, in the prime Central Business District (CBD) of Frankfurt, Germany, at an agreed property value of €356.0 million (approximately S$569.6 million) (on 100% basis). CCT will hold a 94.9% stake and CapitaLand will hold the remaining 5.1% stake in the Gallileo property through a special purpose vehicle. The completion of the acquisition is expected to take place in June 2018.
The agreed property value of Gallileo at €356.0 million, negotiated on a willing-buyer and willing-seller basis, represents a discount of 1.4% to the open market value of €360.9 million (approximately S$577.4 million). The open market value as at 31 March 2018 was appraised by Cushman & Wakefield LLP, an independent valuer.
Mr Kevin Chee, Chief Executive Officer of the Manager of CCT, said: “CCT has grown to become the largest office landlord in Singapore’s CBD by net lettable area over the years. Expanding overseas is a strategic move to deliver long-term sustainable distribution growth to our unitholders and inject diversity to the portfolio. CCT will remain predominantly Singapore focused and will look to allocate between 10% to 20% of its deposited property overseas. We have been actively exploring opportunities to acquire core commercial assets in key gateway cities in developed markets. Germany is a key focus for CCT given the depth of good quality investment grade commercial assets. Frankfurt’s office market is particularly attractive in view of the strong momentum in office demand and resilient rents.”
Mr Chee added: “The Gallileo property is a freehold Grade A asset which offers a strategic fit with CCT’s existing portfolio. Providing income stability with an established anchor tenant on a long-term lease, the acquisition offers an attractive net property income yield of 4.0%” .
Source : Company