CapitaLand - DBS Research 2018-08-28: Setting Another Milestone With The Sale Of 70% Stake In Westgate

CapitaLand - DBS Group Research 2018-08-28: Setting Another Milestone With The Sale Of 70% Stake In Westgate CAPITALAND LIMITED SGX:C31

CapitaLand - Setting Another Milestone With The Sale Of 70% Stake In Westgate

  • Proposed divestment of Westgate in Singapore Jurong Lake District.
  • Net gain of S$99.2m to be recorded upon completion of the deal.
  • CapitaLand Limited to continue managing the mall under its trust.
  • Maintain BUY, Target Price of S$3.62 maintained.



What’s New

  • CapitaLand Limited (CAPL) announced the sale of its 70% interest in Infinity Mall Trust (IMT) which holds Westgate mall located in the Jurong Lake District.
  • The divestment price is based on an agreed market value of S$1,128m (S$2,746 psf) on a 100% basis which is within the range of two independent valuations of S$1,125m and S$1,130m conducted by Colliers International and Jones Lang LaSalle respectively. The 70% stake equates to a valuation of S$789.6m.
  • The valuation of S$1,128m is higher than the latest valuation as at 30 June 2018 of S$991m (S$2,408 psf) on a 100% basis.
  • The property will be divested at an exit yield of 4.3% NPI yield, which we believe to be fair given the robust transaction cap rates achieved for retail assets that were recently transacted.


Westgate overview


~ SGinvestors.io ~ Where SG investors share
  • Westgate mall is part of an integrated retail and office development in the Jurong Lake District, Singapore’s up-and-coming second CBD.
  • Opened in December 2013, Westgate mall has a total NLA of c.411,000 sqft.
  • Committed occupancy as at 31 July 2018 stood at 98%.


Gains of close to S$100m.

  • The proposed divestment is expected to reap proceeds of S$397.6m or a net gain of S$99.2m.
  • The completion of the deal is expected to be in 4Q18.





Derek TAN DBS Group Research | Rachel TAN DBS Research | https://www.dbsvickers.com/ 2018-08-28
SGX Stock Analyst Report BUY Maintain BUY 3.620 Same 3.620



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