CAPITALAND Ascott Trust (Clas) has proposed to acquire Victory SR Trust (VSRT), which directly holds a 100 per cent interest in lyf Funan Singapore.
On Tuesday (Oct 1), its managers said the purchase consideration is estimated at S$146.4 million after accounting for VSRT’s net asset value (NAV) based on the property’s agreed value of S$263 million, and agreed adjustments to the NAV.
Including the repayment of an existing facility taken out by VSRT’s trustee amounting to S$113 million, along with the purchase consideration and other acquisition-related fees, Clas’ managers foresee an acquisition outlay of around S$265.1 million.
The S$146.4 million purchase consideration is expected to be largely funded from Clas’ sale of Citadines Mount Sophia Singapore, which was completed in March 2024.
The property’s agreed value of S$263 million is at a 1.9 per cent discount to the average of two independent valuations.
Its managers project the acquisition to increase Clas’ total distribution by S$3.5 million while keeping its gearing under “a healthy” 40 per cent.
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Based on FY2023 pro forma estimates, the higher total distribution translates to a distribution per stapled security (DPS) accretion of 1.5 per cent, as well as an earnings before interest, taxes, depreciation and amortisation (Ebitda) yield of 4.7 per cent.
Clas said the acquisition of this property is therefore in line with the stapled group’s portfolio reconstitution strategy.
Serena Teo, chief executive of the managers, noted that the entry Ebitda yield for lyf Funan Singapore is 150 basis points higher than the investment exit Ebitda yield of about 3.2 per cent for Citadines Mount Sophia Singapore.
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