Link REIT is frontrunner to buy Singapore shopping malls - sources

CapitaLand Integrated Commercial Trust

28/11/2022 09:03

By Anshuman Daga and Yantoultra Ngui
       SINGAPORE, Nov 28 (Reuters) - Link Real Estate
Investment Trust  0823.HK , Asia's biggest REIT, has emerged as
the frontrunner to buy a portfolio of assets from Singapore
shopping mall owner NTUC Enterprise Co-operative Ltd, multiple
sources told Reuters on Monday.
    Acquisition of the assets in what would be Southeast Asia's
biggest real estate transaction of 2022 could boost Link REIT's
valuations, analysts have said.
    The deal value has been trimmed to about S$2.5 billion 
($1.8 billion) from roughly S$3 billion after one more of the
Singapore assets was removed from the proposed sale, said two of
the sources, who did not wish to be identified due to the
confidentiality of the matter.
    Reuters reported last month that Mercatus Co-operative Ltd,
an NTUC unit managing the assets and exploring options for the
possible sale, had removed at least one asset from it. 
    On Monday sources said the winning bidder could be announced
in a few weeks. If Link REIT does buy, the assets will be its
first in Singapore.
    The assets to be sold by NTUC include retail malls Jurong
Point and Swing By @ Thomson Plaza, the sources said.
    Mercatus and Hong Kong-listed Link REIT declined to comment
on the matter.
    A successful sale, even after the offered portfolio has been
further trimmed, would still rank ahead of all other property
deals in Southeast Asia this year, Refinitiv data showed.
    CapitaLand Integrated Commercial Trust  CMLT.SI  (CICT),
part of Singapore-based CapitaLand Investment Ltd, and Frasers
Property  FRPL.SI , part of Thai billionaire Charoen
Sirivadhanabhakdi's group, have also been in the fray to buy the
assets.
    Frasers Property declined to comment to Reuters while CICT
did not respond to a request seeking comment.
    Sources said potential buyers for the assets, called a
prized retail portfolio by analysts and first offered about six
months ago, had turned cautious because of a sharp rise in
interest rates and a worsening outlook for economic growth.
    Link REIT's market value of $14 billion is the largest in
Asia. The many assets that it owns and manages include retail
properties, car parks and offices. Nearly three-quarters of its
portfolio value is in Hong Kong. It has also expanded into
mainland China, Australia and Britain.
    "If Link REIT turns out on top, we believe that investors
will reward Link REIT with higher valuations, given its pivot
back to retail, while improving the overall resilience of its
earnings profile," DBS analysts said in a report in August.
    Link REIT has been on the prowl for assets in Singapore and
other countries to diversify its portfolio.
    "While this portfolio will represent Link REIT's first foray
into Singapore, the pivot to more retail exposure is expected to
be positive overall, as Link REIT has significant scale and
expertise managing such assets in Hong Kong," DBS analysts said.
    Last week, Singapore projected growth in its gross domestic
product would slow to between 0.5% and 2.5% next year, down from
about 3.5% this year because of persistent inflation and weak
demand.
    ($1 = 1.3768 Singapore dollars)
 (Reporting by Anshuman Daga and Yantoultra Ngui; Editing by
Bradley Perrett)
 ((anshuman.daga@tr.com;))