CapitaLand Commercial Trust to divest One George Street into 50%-held JV partnership for S$84.6 mil

SINGAPORE (May 2): The trustee manager of CapitaLand Commercial Trust (CCT) has entered into an agreement to divest One George Street into a concurrently-formed limited liability partnership – One George Street LLP (OGS LLP), which CCT has established with joint venture partner OGS (II), a special purpose vehicle owned by insurer FWD Group.

The agreed value of the property is at S$1.183.2 million (RM3.67 million) or S$2,650 psf, 16.7% above the property’s Dec 31 valuation of S$1.014 million or S$2,271 psf, translating to a net property yield of 3.2% per annum.

CCT will hold 50% of OGS LLP and is expected to recognised a gain of about S$84.6 million upon divestment of the property on a 50% basis, with an approximate net gain of S$79.7 million after the estimated transaction and related costs of S$4.9 million.

OGS (II) will hold the remaining 50% in OGS LLP, which is tax transparent for Singapore income tax purposes.

In a Tuesday announcement, CCT’s trustee manager says the divestment is in line with the trust’s portfolio reconstitution strategy to proactively enhance value and increase financial flexibility.

“By maintaining a 50% ownership of OGS LLP, CCT will continue to receive tax transparent income contribution from One George Street, a good quality Grade A office building with a solid tenant profile,” says Lynette Leong, CEO of the manager.

Units of CCT closed 1 Singapore cent lower at S$1.62 on Friday. —

For more stories, download pullout here for free.

  1. Online gambling operation busted in Cheras
  2. Commercial property glut poses risk for M’sian banks
  3. IJM to see earnings from TRX building in FY19 or FY20