CMT – BT

CMT inks deal to buy Iluma for $295m

CapitaLand unit CapitaMall Trust (CMT) has agreed to buy Iluma, a shopping mall in Bugis, for $295 million.

Iluma is located at Victoria Street opposite Bugis Junction, which is one of CMT’s existing properties. The mall has a net lettable area of 185,190 square feet and is connected by an overhead link-bridge to the second storey of Bugis Junction.

CMT is buying the mall from Jack Investment, a private local property development and investment company. Previous media reports have put Jack Investment’s investment in Iluma at around $160 million.

With the acquisition of Iluma, CMT’s portfolio increases to 16 shopping malls. CMT is the largest real estate investment trust (Reit) in Singapore by asset size. Its portfolio is valued at around $8.1 billion.

‘The acquisition of Iluma is exciting as we see a lot of opportunities to integrate it with our Bugis Junction,’ said Simon Ho, chief executive of the trust’s management team. ‘The two malls are already connected by an overhead link-bridge and we see scope to create an enlarged and seamless shopping destination that will appeal to locals and tourists.’

Bugis Junction, with its direct connection to the Bugis MRT station and central location, already attracts strong shopper traffic of more than 3.2 million per month, Mr Ho said.

The integration of Iluma with Bugis Junction will create a combined shopping destination with net lettable area of more than 606,000 sq ft, about the size of CapitaLand’s Ion Orchard mall on Orchard Road.

At the price of $295 million and based on the current rental rates, occupancy of 83.7 per cent and entry yield of just under 4 per cent, the acquisition is yield accretive to CMT’s current portfolio, Mr Ho explained.

He added: ‘With its prime location next to Bugis MRT station and planned integration with our Bugis Junction, we are confident that the occupancy of Iluma can match Bugis Junction’s occupancy of 100 per cent and its property yield can be boosted to be in line with the other malls in our portfolio.’

CMT shares gained three cents to close at $1.81 yesterday.