This morning, blue chip retail REIT CapitaLand Mall Trust (SGX:C38U) held its extraordinary general meeting (EGM) to seek unitholders’ approval on the REIT’s merger with another blue chip REIT, CapitaLand Commercial Trust (SGX:C61U), with the REIT being renamed to CapitaLand Integrated Commercial Trust (or CICT) post-merger.
As a unitholder of the retail REIT, I have attended the virtual meeting to receive the latest updates from the management (it was a brief one, lasting slightly under 30 minutes.) For the benefit of those who weren’t able to attend, in this post, you’ll find a summary of the presentation by CEO Mr Tony Tan, an indicative timetable for the merger, results of the 3 resolutions that were being put to a vote:
Presentation by CEO of CapitaLand Mall Trust, Mr Tony Tan
- Mr Tan stressed that the rationale of the merger remains valid, and that post-merger, the merged entity (i.e. CICT) will be in a better position to capture evolving trends in the post-Covid world (such as decentralisation, mixed-used precincts, and integrated developments, where retail and office are key nutshells.)
- As far as retail and offices in Singapore are concerned, they remain relevant and essential – for the former, shopping mall culture will continue to remain deeply entrenched; for the latter, given the fact that Singapore is a key economic hub in Asia, the Singapore CBD (where CapitaLand Commercial Trust’s office properties are located) will continue to play a central role in the future of office.
- Mr Tan also added that the REIT has assets in areas which URA have announced developments on in its Master Plan – the Jurong Lake District, as well as Bishan Sub-Regional Centre, which it can benefit from post-development.
- Post-merger, CICT will be one of the largest REITs in Asia-Pacific, and this will bring about higher trading liquidity, positive re-rating, as well as a more competitive cost of capital.
- Moving forward, the REIT will continue to remain Singapore-focused, where they will continue to invest in retail and office properties, along with integrated developments. As far as acquisitions in other developed countries is concerned, it will not consist more than 20% of the total portfolio entity value of the merged entity. Additionally, the REIT will also be looking to unlock values of its existing properties through asset enhancement initiatives and re-development.
Indicative Timetable of the Merger
The following are some of the important dates regarding the merger to take note of:
- Expected Effective Date of Trust Scheme: 21 October 2020
- Expected Delisting of CapitaLand Commercial Trust: 03 November 2020
- Long-Stop Date: 30 November 2020
Results of the 3 Resolutions Put to Vote during the EGM
The following are results of the 3 resolutions that were put to vote during the EGM:
#1 – To approve the proposed amendments to the trust deed constituting CapitaLand Mall Trust – 99.75% voted for, while 0.25% voted against
#2 – To approve the proposed merger of CapitaLand Mall Trust and CapitaLand Commercial Trust by way of a trust scheme of arrangement – 98.89% voted for, while 1.11% voted against
#3 – To approve the proposed allotment and issuance of units of CapitaLand Mall Trust to the holders of units in CapitaLand Commercial Trust as part of the consideration for the Merger – 98.88% voted for, while 1.12% voted against
In closing, Mr Tan was heartened and encouraged by the strong mandate from the unitholders. He added that the merged entity will be in a better position to seize opportunities in retail, office, as well as integrated developments, and that it will remain committed to deliver long-term sustainable returns for its unitholders.
- CEO’s Presentation Slides
- Results of EGM
- Questions (by Unitholders) and Answers (Provided by the REIT’s Management)
Disclaimer: At the time of writing, I am a unitholder of CapitaLand Mall Trust.
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