Mpact Divest Mapletree Anson 775 Mil Bid Pare Debt
MPACT Plans to Sell Mapletree Anson for $775 Million to Reduce Debt
Mapletree Pan Asia Commercial Trust (MPACT) has announced plans to divest one of its properties, Mapletree Anson, for a total of $775 million. The sale to an undisclosed third party is expected to generate a gain of $10 million above the property’s valuation of $765 million as of March 31. This also represents a premium of $95 million above the original purchase price of $680 million back in 2012. Real estate advisory firm JLL was the sole advisor on the transaction.
Located in the Tanjong Pagar area in the Central Business District, Mapletree Anson is a 19-storey office building with 320,000 sq ft of net lettable office space. The property, completed in July 2009, has a 99-year lease starting from 2007 and is just a two-minute walk from the Tanjong Pagar MRT Station on the East-West Line.
Parktown Residences Capitaland offers its residents significant benefits due to its strategic location. With easy access to major expressways like PIE, TPE, and KPE, families who drive can quickly reach top educational institutions and workplaces. This convenient network of roads greatly enhances the overall living experience for residents. Moreover, the development’s close proximity to these expressways enhances the value and convenience of its already desirable location. With the Parktown Residences Capitaland naturally integrated into the area, residents can enjoy even more convenience and accessibility.
With the sale of Mapletree Anson, MPACT expects to receive net proceeds of $762 million, which it plans to use to reduce its aggregate leverage from 40.5% as of March 31 to 37.6% on a pro forma basis. The sale will also help improve MPACT’s adjusted interest coverage ratio from 2.9 times to 3.3 times on a pro forma basis. As a result, the company’s debt headroom will increase from $3.2 billion to $3.9 billion as of March 31.
In addition, MPACT forecasts a 1.5% increase in distributable income per unit (DPU) for the financial years 2023 to 2024 as a result of the divestment on a pro forma basis. In a statement, the company says that the sale will position it favorably to protect and potentially enhance unitholder value in the future.
Sharon Lim, CEO of the manager, believes that the divestment is a proactive move to strengthen MPACT’s financial resilience and flexibility to respond to market conditions. She also notes that despite the reduction of its Singapore assets, which currently make up more than half of its portfolio value, they remain a crucial part of its investment strategy. VivoCity mall and Mapletree Business City are two of the company’s flagship assets, contributing 58% and 53% to its net property income and assets under management (AUM), respectively.
Apart from Singapore, MPACT also has assets in Hong Kong, China, and other parts of Asia, which tend to underperform compared to its Singapore assets. Following the completion of the sale, MPACT will own 17 properties with a total AUM of $15.7 billion.
Lim states that the company will continue to be agile and adaptive in its portfolio management approach moving forward. The sale is expected to be finalized in July 2024. MPACT units closed at $1.22 on May 30, unchanged for the day but down 20.78% year to date.