According to CICT, net proceeds from the sale will be used to lower its gearing by 1 around percentage point from 39.2% to 38.2%.
Separately, CICT announced it is part of a joint venture that has been awarded a 99-year residential and commercial site at Hougang Central after putting in a bid of $1.1 billion.
CICT will wholly own and build the commercial component of the 504,820 sqft site while the residential portion, with an estimated 830 units, will be under CapitaLand Development and UOL Group.
CICT is expecting a yield on cost of more than 5% and will be funded progressively with internal funds and external borrowings. "The involvement of CICT in the development of the mall is strategically significant," says Wong.
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"The deal will extend CICT development track record and add a new channel of growth for the REIT to scale it's Singapore-centric retail exposure amidst a competitive and tight investment landscape for Singapore-dominant malls," she adds.
She estimates that the development cost works to work out to around $3,700 psf on NLA, after taking into account recent inflation around material and labour costs.
Wong believes that there will be further valuation upside which CICT can book, which she estimates to be around 10% of total development outlay against the current 4.5% capitalisation rate for prime Singapore retail assets.
Upon completion of the project in 2030 - 2031, she estimates a 1 cent per unit to CICT's NAV, and expects gearing to remain at sub-40% where proceeds from Bukit Panjang Plaza could be rechannelled to contribute to the initial cash outlay for the development.
CICT units changed hands at $2.39, down 0.83%.
