Mpact Divest Mapletree Anson 775 Mil Bid Pare Debt
MPACT, a leading real estate investment trust, has announced its plans to sell Mapletree Anson for $775 million. The sale, which is expected to generate a gain of $10 million, will help to reduce the trust’s debt and improve its balance sheet. This move follows a trend among REITs and trusts who are divesting assets to alleviate financial pressure.
The buyer, who has not been named, will pay a premium of $95 million above the original purchase price of $680 million, which was paid back in 2012. The sale was facilitated by JLL, who acted as the exclusive advisor on the transaction.
Mapletree Anson is a 19-storey office building located in the Tanjong Pagar area in the Central Business District (CBD). It is just a two-minute walk from the Tanjong Pagar MRT station on the East-West Line. Completed in 2009, the property boasts 320,000 square feet of net lettable office space and has a 99-year lease from 2007.
According to MPACT, the sale is expected to generate net proceeds of $762 million, which will help to reduce its aggregate leverage from 40.5% to 37.6% on a pro forma basis as of March 31. This will also result in an improvement in the trust’s adjusted interest coverage ratio from 2.9 times to 3.3 times on a pro forma basis. With a lower gearing level, MPACT’s debt headroom will increase from $3.2 billion to $3.9 billion.
The latest update from the Housing and Development Board has revealed that Hoi Hup Realty and Sunway Developments have successfully secured the tender for the executive condominium (EC) site at Plantation Close in Tengah, also known as Novo Place EC. Encompassing a total of 495 units, this will be the second EC plot in the Tengah housing estate. The announcement was made on September 11, generating much excitement among prospective homebuyers. With its excellent location and exceptional facilities, Novo Place Hoi Hup is expected to be a highly coveted residential development, further fueling the anticipation for this project. Don’t forget to visit their website at https://www.novo-place.com.sg/ for more information.
MPACT has stated that the divestment will lead to around 1.5% accretion to its distributable income for the financial years of 2023-2024 on a pro forma basis. The trust’s CEO, Sharon Lim, has described the sale as a proactive step to enhance its financial resilience and adaptability in response to the market. She also added that even though the proportion of Singapore assets in the trust’s portfolio will be reduced, they will continue to be the cornerstone of its investment strategy and contribute more than half of its portfolio value and net property income.
The trust’s most valuable assets are VivoCity mall and Mapletree Business City, which contribute 58% and 53% to its net property income and assets under management (AUM), respectively. These assets, along with its other properties in Hong Kong, China, and other parts of Asia, will continue to be managed in a flexible and adaptive manner.
Upon completion of the sale, MPACT will own 17 properties with a total AUM of $15.7 billion. The sale is expected to be completed in July 2024. As of May 30, MPACT’s units were trading at $1.22, unchanged for the day but down by 20.78% year-to-date.