CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

Following the proposed merger between Frasers Logistics and Industrial Trust and Frasers Commercial Trust, another REIT announced their merger. On 22nd January 2020, CapitaLand Mall Trust and CapitaLand Commercial Trust announced their proposed merger.

CapitaMall Trust currently has 15 properties in its portfolio while Capita Commercial Trust has 10 properties. With the proposed merger, the merged REIT will have a total of 24 properties. (Capita Commercial Trust has 60.0% of Raffles City while CapitaMall Trust owns the other 40%)

With the merger, the properties are valued at S$22.9 billion.

CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

With the proposed merger, CapitaLand Commercial Trust holders will receive

  • 0.72 CapitaMall Trust Units per CapitaLand Commercial Trust unit
  • S$0.2590 in cash per CapitaLand Commercial Trust unit

Pro Forma DPU Accretion

CapitaMall Trust currently makes up 9% of my stock portfolio. I currently do not hold any CapitaLand Commercial Trust units thus I will not receive any new CapitaMall Trust units or receive any cash distribution.

However, as a CapitaMall Trust unit holder, I will be keen to know what is the increase in Distribution Per Unit (DPU) after the merger.

According to the presentation slides, Pro forma DPU accretion is expected to increase 1.6% from 11.97 cents to 12.17 cents.

CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

With every announced proposed merger, I noticed the share price has always gone up the next day. The share price of CapitaMall Trust has jumped from S$2.58 to S$2.64.

CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

The share price of CapitaLand Commercial Trust has jumped from S$2.12 to S$2.18.

CapitaLand Mall Trust and CapitaLand Commercial Trust Proposed Merger

Past Merger of REITs

Here are the news on the merger of other REITs.

Which is the next REIT that will announce a merger?

My Personal Analysis of CapitaLand Commercial Trust

My Personal Analysis of CapitaLand Commercial Trust

CapitaLand Commercial Trust catches my eye when I was researching on REITs that own car parks in their portfolio. If you didn’t know, Golden Shoe Car Park is one of the assets in CapitaLand Commercial Trust portfolio. But in general, CapitaLand Commercial Trust is similar to Keppel REIT which consists of mainly Grade A office assets.

Golden Shoe Car Park is undergoing a redevelopment which is due to complete in 1H2021. The car park will be redevelop into a commercial development in Raffles Place. Read More