CapitaLand Malaysia REIT Management has entered into a sale and purchase agreement to acquire a freehold logistics warehouse located at the HicomGlenmarie Industrial Park in Shah Alam, Selangor for the Proposed Acquisition price of RM39.7 million.
The deal was closed on a willing-buyer willing-seller basis, in line with the independent market valuation of RM40.4 million commissioned by the Trustee. In tandem with the Proposed Acquisition, the REIT manager has also executed a Letter of Offer with a reputable international luxury fashion retailer to fully lease the building for ten years. The new lease is expected to commence in the first half of 2024 and will generate a gross rental income of RM3.5 million per annum with an approximate yield of 6.5%, providing the group with a stable income stream.
CLMT said the proposed acquisition will contribute positively to its income upon the commencement of the lease in the financial year 2024. Under the agreement, CMRM will also undertake a convert-to-suit exercise and transform the Logistics Property into a temperature-controlled distribution centre at an estimated cost of RM14.6 million. Including the purchase price of RM39.7 million, CLMT’s total investment outlay of RM54.3 million will be fully funded by bank borrowings.
Following the Proposed Acquisition, CLMT’s enlarged portfolio will consist of eight properties with the proportion of logistics properties increasing from 7.8% to 9.6% of the total net lettable area of approximately 4.4 million sq ft. Portfolio occupancy is expected to improve from 89.2% as at 31 March 2023 to 89.3% upon the commencement of the new lease in 2024.
