CAPITALAND is aiming to launch a new Malaysian retail real estate investment trust (Reit) within a year and has just spent $527.1 million on the plan.

CAPITALAND is aiming to launch a new Malaysian retail real estate investment trust (Reit) within a year and has just spent $527.1 million on the plan.

Yesterday, it announced that it had entered into sale and purchase agreements to acquire two shopping malls in Malaysia. The larger of the two is Gurney Plaza in Penang, which will be acquired for $336.8 million. Mines Shopping Fair in Selangor will cost $190.3 million.

In a statement, CapitaLand said the two assets would ‘form seed assets for CapitaLand’s proposed Malaysian retail Reit’. CapitaLand CEO and president Liew Mun Leong added that the company was ‘on track’ to build up its assets under management through increasing the Reit’s portfolio in Singapore and abroad.

Mr Liew said: ‘In line with our current Reits strategy, we have identified other quality Malaysian retail assets that will augment Gurney Plaza and Mines Shopping Fair and form the pipeline of assets for our pure-play Malaysian retail Reit, which could possibly be listed within a year.’

CapitaLand did not say what the target size of the Reit would be. Its other retail Reit, CapitaMall Trust, which was listed in 2002, now has a portfolio worth almost $6 billion.

CapitaLand said it has not yet decided to list the new trust. CapitaLand has sponsored five Reits, all but one of which are listed on the Singapore Exchange. Quill Capita Trust, which was launched in January, is listed on Bursa Malaysia.

Of the latest properties, CapitaLand Retail CEO Pua Seck Guan said: ‘The acquisitions provide CapitaLand with an unique opportunity to extend our retail real estate platform to Malaysia, which in addition to Singapore, China, India and Japan, will further strengthen our position as the leading retail property company in Asia.’

He said the 700,000 sq ft Gurney Plaza is close to 100 per cent occupied. CapitaLand also signed a put and call option to acquire Gurney Plaza’s four storey extension which is under construction. It will provide an additional 130,000 sq ft of net lettable area when completed around the end of next year.

Mr Pua said that there were ’substantial asset enhancement and tenancy remixing opportunities’ at the 650,000 sq ft Mines Shopping Fair.

Source : Business Times - 17 Aug 2007