Local tie-up snaps up Sembawang mall for $248m

A joint venture comprising two local business groups is buying Sembawang Shopping Centre from CapitaLand Mall Trust (CMT) for $248 million – almost the double the complex’s latest valuation.

Lian Beng-Apricot Sembawang, as the venture is called, is a 50:50 partnership between construction firm Lian Beng Group and Apricot Capital, the private investment firm of the Super Group’s Teo family.

The bid lodged by the joint venture for the mall was almost double the $126 million valuation for the property as of Dec 31 last year.

This valuation commissioned by CapitaLand Mall Trust was carried out by Knight Frank using the capitalisation method and the discounted cashflow method.

Conversely, Lian Beng’s valuation was done on a market comparable basis. It said its bid price took into consideration prevailing market conditions and current prices of properties in the vicinity. The purchase price works out to $1,203 per sq ft (psf) for the mall, which has a gross floor area (GFA) of 206,087 sq ft, and $1,727 psf based on its total net lettable area of 143,631 sq ft.

“Considering that Sembawang Shopping Centre is a 999-year leasehold property, we think the purchase price in per square foot is reasonable,” said Lian Beng executive chairman Ong Pang Aik yesterday.

Mr Terence Tang, managing director of capital markets and investment services at Colliers International, Asia, noted that based on the mall’s income, the $248 million price works out to a net income yield (gross revenue less operating expenses) of 4.2 per cent.

Colliers brokered the deal.

In July last year, Lian Beng and Apricot Capital acquired mixed-use commercial and residential building Wilkie Edge near Little India for $280 million from CapitaLand Commercial Trust. This worked out to $1,299 psf based on GFA and $1,812 psf based on net lettable area.

Sembawang Shopping Centre’s major tenants include Giant, Yamaha Music School, Food Junction and Daiso Japan. It has four retail levels and three carpark levels.

CMT told the Singapore Exchange yesterday that the divestment is expected to generate a net gain of about $119.6 million. CMT Management chief executive Tony Tan said: “As the mall accounts for only about 1 per cent of CMT’s total asset value, its sale will have minimal impact on CMT’s financial performance and distribution per unit.”

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