CapitaLand Malaysia Trust to acquire five industrial facilities in Johor for RM220.8 million

[SINGAPORE] CapitaLand Malaysia Trust (CLMT) has entered into an agreement to acquire five high-specification industrial facilities in Johor for RM220.8 million (S$69.2 million), deepening its presence in Malaysia’s southern industrial corridor.

The facilities, “strategically located” within the Johor-Singapore Special Economic Zone (JS-SEZ), are situated in i-Tech Valley industrial park in Iskandar, Malaysia.

They were acquired from Greenhill SILC and Pentagon Land, both wholly owned subsidiaries of Bursa Malaysia-listed AME Elite Consortium.

The agreed purchase price represents a 0.6 per cent discount to the independent market valuation of RM222.1 million commissioned by the trustee.

The acquisition is expected to be completed progressively from the first quarter of 2027 to the first quarter of 2018. In a bourse filing on Monday (Dec 22), CLMT’s manager said this will allow it to phase leasing in line with market demand.

Upon completion and realisation of a full year of operating income, the deal is projected to be distribution per unit accretive with a first-year gross yield of approximately 7.3 per cent.

Yong Su-Lin, chief executive of CapitaLand Malaysia Reit Management, the manager of CLMT, said the acquisition supports the trust’s strategy to expand its industrial and logistics portfolio with high-quality assets in an established location.

“Johor’s industrial market continues to benefit from the JS-SEZ and major infrastructure upgrades such as the Rapid Transit System Link,” she said.

With these facilities, CLMT is positioned to capture long-term growth from regional manufacturing expansion and supply chain realignment, she added.

CLMT is listed on Bursa Malaysia. Upon completion, its Johor portfolio will comprise 11 industrial assets with a combined built-up area of approximately 781,937 square feet. This will increase CLMT’s industrial and logistics assets under management from 7.9 per cent to 11.5 per cent.

The five facilities have a total built-up area of 524,077 sq ft and comprise single-storey detached factories with two-storey office components and ancillary buildings. They are designed to meet modern occupier requirements, featuring high floor-loading capacities, generous ceiling heights, contemporary facades and loading bays with dock levellers.

The properties are located within i-TechValley, a 170 acre (68.8 hectare) industrial park at the Southern Industrial and Logistics Clusters in Iskandar Puteri. Designed as a sustainable, high-tech industrial park, i-TechValley caters to advanced manufacturing, logistics and technology-driven industries.

The properties are located within a 20-minute drive from the Tuas Checkpoint, enhancing their appeal to Singapore-linked occupiers and regional supply chain operators.

The acquisition will be financed through existing debt facilities. As part of the forward purchase arrangement, CLMT will pay a 10 per cent deposit upfront, with the balance to be paid upon completion.

Following the transaction, CLMT’s pro forma gearing will increase from 39.8 per cent to 42.2 per cent. The acquisition is expected to contribute income progressively from the financial year ending Dec 31, 2027.

Units of CLMT closed at RM0.62 on Monday, up RM0.005 or 0.81 per cent before the announcement.