Thu, May 17, 2018 – 8:16 AM

CapitaLand Commercial Trust (CCT) is buying a majority stake in a prime Frankfurt property for 342.7 million euros (S$542.5 million), which will be partially funded through an equity placement of at least S$212 million.

CCT will undertake a private placement of 130 million new units in CCT to investors at an issue price between S$1.631 and S$1.676 per unit. The issue price range represents a discount of approximately 3.2 per cent and 5.8 per cent to the volume weighted average price of S$1.7306 per unit for trades in the units done on May 16, being the preceding market day on which the placement agreement was signed.

About S$208.7 million, or 98.4 per cent of the gross proceeds will be used to partially fund the acquisition of a 94.9 per cent stake in the freehold property in Frankfurt known as Gallileo, with the rest used for expenses related to the private placement and working capital. 

Located in Frankfurt’s prime central business district, known as the banking district, the property has a net lettable area of 436,175 sq ft (40,522 sqm). It is a 38-storey Grade A commercial building with ancillary retail and a four-storey heritage building for office use. The weighted average lease expiry is 10.6 years, and occupancy stands at 100 per cent with Commerzbank AG anchoring approximately 98 per cent. Net property income yield is expected to be about 4 per cent. 

CCT is of the view that this move represents an accretive acquisition that will increase its portfolio value and provide geographical

Units in CCT last traded down 1.7 per cent to S$1.72 apiece. The trust requested a trading halt on Thursday morning pending the release of the related announcements. 

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