PETALING JAYA: Capitaland Malaysia Trust
(CLMT) has entered into a sale and purchase agreement to acquire a freehold logistics warehouse in Shah Alam, Selangor, for RM39.7mil.
CapitaLand Malaysia REIT Management Sdn Bhd (CMRM), the manager of CLMT, said the price is in line with the independent market valuation of RM40.4mil.
In tandem with the proposed acquisition, CMRM has also executed a letter of offer with an international luxury fashion retailer to fully lease the building for 10 years.
The lease, which is earmarked to commence in the first half of 2024, is expected to generate a gross rental income of RM3.5mil per annum with a yield of 6.5%.
“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 RM14.6mil,” CLMT said in a statement.
The total investment outlay of RM54.3mil, which encompasses the purchase price of RM39.7mil, will be entirely financed through bank borrowings.
“Post-transaction, CLMT’s proforma gearing will increase from 44.3% to 44.8%, which remains below the regulatory limit of 50%,” the trust noted.
The proposed acquisition is expected to be completed in the second half of 2023.
CMRM chief executive officer Tan Choon Siang said the group is pleased to strengthen its logistics presence with the acquisition of a second logistics property.
“The proposed acquisition is a continuation of CLMT’s journey to drive sustainable growth and diversify income sources.
“It underscores our focus on executing and delivering on our growth initiatives to capture value in the fast-growing new economy sector and capitalise on the rising demand for high-quality logistics infrastructure in prime locations,” he said.
He said the convert-to-suit exercise is a testament to its commitment to provide attractive real-estate solutions for its tenants.
“This exercise will showcase our property development expertise as we drive value creation for CLMT to scale up its logistics footprint,” Tan said.
