CAPITALAND Retail China Trust (CRCT) has inked a deal to sell real estate in Wuhan for 258 million yuan (S$52.6 million) in cash, the manager said on Monday.

 

The trust is selling CapitaMall Minzhongleyuan and three sets of vacant premises to an unrelated third party, which has also agreed to pay an extra 200 million yuan to cover a shareholder loan and entrustment loans.

 

The Minzhongleyuan property had been " facing operational challenges in the past few years" , said the CRCT manager, citing factors such as road works in the area.

 

As such, it argued that the divestment would let it unlock value from a property with limited upside, exit the non-core asset and focus on the trust' s larger core portfolio.

 

The manager also noted that the agreed interest price is 3.9 per cent more than the combined book value of the vacant premises and an independent valuation of the mall.

 

The divestment' s estimated net proceeds of S$46.8 million could go towards repaying debt, funding capital expenditure and asset enhancement, capital distribution, new acquisitions, or general corporate and working capital needs, the manager said.

 

But it added that the deal is not expected to have any material impact on the trust' s net asset value and distribution per unit for the year to Dec 31, 2021.