News
COMMERCIAL PROPERTY | Staff Reporter, Singapore
view(s)

CapitaLand Commercial Trust loses 85% of Bugis Village's value

It will be returned to the State on 1 April 2019.

CapitaLand Commercial Trust (CCT) will only receive $6.6m upon the return of Bugis Village to the State, and according to RHB Research, it should expect write-downs as this is significantly lower than that the latest valuation of $44m.

CCT said in its Q1 results announcement that Bugis Village will be returned to the State on 1 April 2019. This comes after the authorities chose to exercise the right to take back the property under the terms of the lease.

RHB analyst Vijay Natarajan noted that the property had a leasehold title expiring March 2088, with the government having the right to terminate the lease on 1 April 2019 upon payment of a pre-agreed compensation amount and accrued interest.

“We expect some write-downs in coming quarters,” Natarajan said.

The property also accounted for 2.2% of net property income in Q1. “We believe CCT would use some of the divestment proceeds to top up the loss of income in 2019 and 2020,” he concluded. 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.