CapitaLand Integrated Commercial Trust Launches S\$600 Million Private Placement to Acquire Full Ownership of CapitaSpring

Key Highlights and Shareholder Impact

• CICT raises S\$600 million via private placement at S\$2.11 per new unit
• Proceeds to fund the acquisition of the remaining 55% interest in CapitaSpring, a landmark Singapore office and retail property
• Placement heavily oversubscribed, with robust demand from institutional and accredited investors
• Funds will also be used for debt repayment, capital expenditure, and working capital
• DBS (a related party) allocated 3.3 million new units, with regulatory clearance for the placement
• New units expected to start trading on SGX-ST on 14 August 2025

What Happened?

CapitaLand Integrated Commercial Trust (CICT), Singapore’s largest REIT, has successfully closed a major private placement, raising gross proceeds of approximately S\$600.0 million. The placement, priced at S\$2.11 per new unit, drew strong demand from both new and existing institutional, accredited, and other investors. The offering was 4.9 times covered (including the upsize option), indicating significant market confidence and appetite for CICT’s growth plans.

Why is This News Potentially Price-Moving?

This transaction is highly significant for CICT’s portfolio and future earnings:

• Acquisition of CapitaSpring: The majority of proceeds (approximately S\$466.5 million, or 77.7%) will fund the acquisition of the remaining 55% interest in the office and retail component of CapitaSpring, located at 86 and 88 Market Street. This deal will give CICT full 100% ownership of this Grade A asset, which is expected to strengthen its rental income and asset base.
• Strengthening Balance Sheet: About S\$125.9 million (21%) will be used for debt repayment, refinancing, capital expenditure, and asset enhancements, supporting CICT’s ongoing financial health and future flexibility.
• Transaction Expenses: The remaining S\$7.6 million (1.3%) is earmarked for transaction-related costs.
• Potential for Reallocation: If, for any reason, the CapitaSpring acquisition does not proceed, CICT has flexibility to use proceeds for other acquisitions, asset enhancements, or debt repayment. This could alter the anticipated impact on earnings and portfolio composition.

Shareholders should note: The issuance of new units will dilute existing holdings by approximately 3.9%. However, the acquisition of a high-quality asset like CapitaSpring and the strengthening of the REIT’s balance sheet could drive long-term NAV and DPU growth, potentially supporting the share price in the medium to long term.

Pricing and Demand Details

The issue price of S\$2.11 per new unit reflects:

• A 2.48% discount to the adjusted volume weighted average price (VWAP) of S\$2.1637 per unit
• A 5.53% discount to the unadjusted VWAP of S\$2.2334 per unit

With 284,361,000 new units to be issued, the placement falls well within the REIT’s general mandate limits (no more than 20% of units can be issued non-pro-rata), ensuring regulatory compliance and no need for further shareholder approval.

Regulatory and Related Party Aspects

DBS Bank Ltd., one of the joint bookrunners and underwriters, was allocated 3.3 million new units on a proprietary basis. As DBS is considered a related party (due to indirect Temasek Holdings interests in both DBS and the REIT sponsor), the Singapore Exchange has reviewed and approved this allocation, subject to conditions ensuring independence and limiting conflicts of interest.

What Happens Next?

• The new units are expected to begin trading on the Main Board of SGX-ST at 9:00 a.m. on 14 August 2025.
• The manager will provide updates on the deployment of proceeds and any changes to their intended use.
• Investors should watch for further announcements regarding the completion of the CapitaSpring acquisition, which could impact CICT’s future income and valuation.

Investor Takeaway

This fundraising and acquisition mark a significant milestone for CICT, potentially enhancing its income profile and asset quality. While immediate dilution is a consideration, the long-term benefits of full ownership in a prime asset like CapitaSpring and a strengthened balance sheet may outweigh near-term concerns. Shareholders should monitor the deployment of proceeds and the performance of CapitaSpring post-acquisition, as these will be key drivers of the REIT’s distributions and valuation going forward.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Please consult your financial advisor before making investment decisions. All forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations.

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