CRCT sells interest in company holding CapitaMall Erqi for $165.2m

It would allow the company to avoid downtime from refurbishing the 15-year-old mall.

CapitaLand Retail China Trust (CRCT) is divesting its entire equity interest in the company holding CapitaMall Erqi for a sale consideration of about $165.2m (RMB850.9m), according to an announcement.

The trust entered into a conditional equity interests transfer agreement in selling CapitaRetail Henan Zhongzhou Real Estate to an unrelated third party, through its wholly owned subsidiary, CapitaRetail China Investments (B) Alpha.

The company aims to use the net proceeds from the divestment to repay debt, finance any capital expenditure and asset enhancement works, capital distribution, fund new acquisitions, and/or to finance general corporate and working capital requirements.

Further, it would allow CRCT to avoid refurbishment downtime and major capital expenditure, as the building has already been in operation for more than 15 years.

The retail mall has seven levels located in the heart of Zhengzhou’s shopping precinct in Henan. It has a gross floor area (GFA) of 92,355.85 sqm, including above-ground floor area of 77,108.47 sqm and underground floor area of 15,247.38 sqm.

The sale consideration was negotiated on a willing buyer and willing seller basis, after taking into account its agreed interest price $150.8m (RMB777m). The independent valuation of the Property as of 31 December 2019 is $125.2m (RMB645.m).