CapitaLand China Trust (CLCT), Singapore’s largest China-focused real estate investment trust, has agreed to divest its entire equity interest in CapitaRetail Beijing Shuangjing Real Estate, which owns the CapitaMall Shuangjing shopping mall in Beijing, to an undisclosed third party for 842 million yuan (US$118.2 million).

The deal, expected to be completed in the first quarter of 2024, represents an exit yield of 2.8%. According to CLCT, the divestment will crystallize higher cash value from the property and enhance returns to unitholders. It is expected to generate net proceeds of 690.7 million yuan.

CapitaMall Shuangjing in Chaoyang District, Beijing. 

The shopping mall, with four retail levels and a gross floor area of 49,462.65 square metres, is located near the East Third Ring Road at Jiulong Commercial Building, No. 31 Guanggu Road, Chaoyang District, Beijing. It was part of CLCT’s initial public offering portfolio in 2006.

“As part of our proactive portfolio management strategy, we are constantly on the lookout for opportunities to monetize non-core assets and capitalize on investment prospects that will strengthen the quality of our portfolio,” CLCTML chief executive officer Tan Tze Wooi says.

“CapitaMall Shuangjing is a predominantly master-leased mall that would require significant capital outlay and planning downtime to repurpose the building and remain competitive. As such, this divestment presents a good opportunity to unlock value and enhance total returns for unitholders.”

Tan says proceeds from the divestment will strengthen the firm’s balance sheet and provide greater financial flexibility to pursue capital recycling and portfolio reconstitution initiatives.

Upon completion of the deal, CLCT will own a portfolio of 10 shopping malls, five business park properties and four logistics park properties across 12 cities in mainland China.