Asked on 22 Jan 2020
CapitaLand Mall Trust and CapitaLand Commercial Trust announced that they are going to merge. What are your thoughts on it? If you own the REIT, is it a good deal for you?
Hopefully, there is some synergy and cost may go down,e.g REITs manager fees, share's fee). Another benefit would be that they are able to go for bigger projects since they can have more debt. (REITs has a cap to their gearing ratio, so if there is a bigger base, there can be more debt).
I think these would be the main benefits.
Deal-wise, they seem to be paying fair value for it, rather than a premium. But hey, at least they are not undercutting it.
It showed a lack of home grown ideas to grow CMT beyond its current portfolio.
Adds another layer of complexion to the analysis. Malls you can simply stroll in and experience it yourself, harder to do that for commercial office