The Rail Mall, located along Upper Bukit Timah Road, will be acquired by SPH REIT for a total consideration ofr S$63.2m.
The acquisition will be funded by a combination of debt and internal resources, according to the REIT manager.
Comprising 43 shop units, 95 carpark lots, the Rail Mall has a total Net Lettable Area (NLA) of about 50,000 sqft.
With the lease expiring in 2046, there is 28 years left before the lease runs out.
According to SPH REIT, the acquisition is in line with the REIT’s strategy of acquiring retail properties that would complement its assets, the Paragon and Clementi Mall.
The seller of the Rail Mall, Pulalu Properties, is a company owned by the LEe Foundation and members of the Lee Family.
Paid out in two tranches, the purchase consideration was arrived at on a willing-buyer willing-seller basis, and is a tad higher than the valuation by Edmund & Tie Company (SEA) Pte Ltd.
The valuation was arrived at by the discounted cash flow and capitalization approach.
The first tranche of payment comprises a 5% consideration paid to the vendor’s solicitors on the execution of the sale and purchase agreement.
The remaining 95% will be paid upon completion which is expected on June 28 2018.
According to the REIT CEO, Susan Leng, “We believe a well-curated mix of F&B concepts complemented with services will serve the immediate established Hillview and Upper Bukit Timah community well,” she said in a statement. “In addition, SPH Reit will intensify community programmes leveraging on the Rail Corridor to attract a wider catchment, as it is well served by the public transport network and accessibility to expressways.”