Monday, September 30, 2013
SingHaiyi: Has acquired a 100% stake in Tri-County Mall in Cincinnati, Ohio. The acquisition price of US$45m values the mall at a 77% discount to its net book value, and translates to just ~US$43.5psf of effective retail area. Earlier this month, Singhai had paid a deposit securing its 65% stake in the mall for US$29.3m, hence its increased investment reflects its confidence in the US real estate market. The mall has 1.26m sf of lettable retail space, of which 0.23m sf is owned by Macy’s, a leading department store. Sitting on a total size of ~3.3m sf, the mall also has a total of 7,118 parking lots. With a current occupancy rate of 84%, Tri-County Mall recorded EBITDA of US$5.7m in FY12, and US$2.6m for 1H13. These translate to gross yields of 12.7% and 11.5% respectively. Singhaiyi will be able to consolidate the revenue and profit of the mall immediately. Singhaiyi believes the mall’s occupancy rate, affected by the previous receivership and foreclosure proceedings, can be improved through focused efforts. Discussions are already underway to secure new tenants and increase occupancy rate Singhaiyi will fund the acquisition from the $226m raised from a recent rights issue and share placement that was undertaken as part of the group’s strategy to expand its real estate investment activities beyond Singapore to include the US. Besides the Tri-County Mall, Singhaiyi and its partners are currently developing four residential projects in Singapore with a combined gross development value of ~$900m.