CMMT to boost property investments in Malaysia

KUALA LUMPUR: CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM) plans to inject more properties into the soon-to-be-listed CapitaMalls Malaysia Trust (CMMT), CMRM's chief executive Sharon Lim said.

Speaking to a press conference after the launch of the CMMT prospectus and retail offering here on Monday, June 28, she added that CMMT is looking to acquire and develop shopping malls with a net lettable space of 300,000 to 500,000 sq ft.

The manager is looking to buy Gurney Plaza Extension, through the trust's sponsor CapitaMalls Asia Ltd. The property, if acquired, would increase the trust's asset size by about 11%.

"We will continue to leverage on its business model which integrates retail and capital management competencies, as well as tap on CapitaMalls Asia's network of more than 7,700 tenants in Singapore, China, Malaysia, Japan and India," Lim said.

CapitaMalls Asia plans to set up a Malaysian retail property fund to acquire and develop retail properties in Malaysia. CMMT will have a right of first refusal over this pipeline of retail properties.

CMMT, which is expected to be listed on the Main Market of Bursa Malaysia Securities Bhd on July 16, will have an initial portfolio of three shopping malls, namely Gurney Plaza in Penang, a 61.9%-interest in Sungei Wang in Kuala Lumpur as well as The Mines in Selangor.

Gurney Plaza, Sungei Wang and The Mines were acquired between late-2007 and mid-2008 for about RM770 million, RM595 million and RM435 million, respectively.

The portfolio of the trust has a total net lettable area of 1.88 million sq ft, valued at RM2.13 billion.

Managed by CapitaMalls Malaysia REIT Management -- a joint venture between CapitaMalls Asia and Malaysian Industrial Development Finance Bhd (MIDF) -- the trust will be the largest "pure-play" shopping mall real estate investment trust (REIT) in Malaysia.

Under the initial public offering (IPO), CMMT will have a total of 1.35 billion units in issue. A total of 786.5 million units or 58.3% are being offered to institutional investors in Malaysia, overseas-based institutional investors such as those in Hong Kong and Singapore, as well as retail investors in Malaysia only.

Some 719 million units are for institutional investors, while the retail offering in Malaysia consists of 67.5 million units made available for application by the Malaysian public and eligible directors and employees.

The final retail price will be the lower of the retail offer price of RM1.08 per unit or the institutional price less a discount of two sen. The institutional price would be determined by way of bookbuilding.

The trust forecasts a dividend yield of 6.9%, based on its distribution per unit of 7.45 sen for the forecast year 2011.

CapitaMalls Asia, meanwhile, will retain a stake of 41.74% in the trust. If an over-allotment option of up to 15% of the offering (786.5 million units) or 117.98 million units is exercised, CapitaMalls Asia's stake in CMMT will be 33%.

The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) Bhd have signed up as cornerstone investors for the IPO to subscribe for 90 million units each in aggregate, which is 11.4% of the total 786.5 million units being offered to investors.

The cornerstone investors have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.

The retail offering opens at June 28, 10am and closes on July 5, 5pm.
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