CapitaLand Integrated Commercial Trust (CICT) and its joint venture partners are divesting CapitaSpring's serviced residence component to unrelated third parties at an agreed property value of $280.0 million.
According to a May 2 bourse filing, the serviced residence component was valued at $278.5 million (on a 100% basis) at end-2024.
CICT currently holds a 45% interest in the serviced residence. Based on CICT's 45% interest, CICT is divesting its stake for $126.0 million. Estimated net proceeds from the divestment is approximately $37.8 million and the exit yield is approximately 3.6%.
The divestment is expected to be completed by 2Q2025.
Completed in November 2021, the 280-metre integrated development CapitaSpring comprises 29 floors of premium Grade A offices, a few ancillary retail units on the ground floor, 17th floor and 51st floor, as well as a 299-unit serviced residence.
CapitaSpring has a leasehold title with a tenure of 99 years from Feb 1, 1982. The serviced residence component of CapitaSpring is held by Glory SR Trust and the office component of CapitaSpring is held by Glory Office Trust. The serviced residences commenced operations in February 2022.
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Tan Choon Siang, CEO of the manager of CICT, says: "We have divested the serviced residence, a non-core asset, at a premium to its last valuation. This reflects our disciplined approach to portfolio reconstitution, enabling us to redeploy capital into more DPU-accretive opportunities and strengthen CICT's leadership position as the proxy for Singapore commercial real estate. We will continue to seek opportunities to enhance the resilience and quality of our portfolio, creating sustainable value for our unitholders."
Units in CICT closed flat at $2.15 on May 2.
