CICT Secures Hougang Central Mixed-Use Site in S\$1.5 Billion Landmark Deal

Key Highlights for Investors

• Major Acquisition: CapitaLand Integrated Commercial Trust (CICT), through a consortium with CapitaLand Group (CLG) and a UOL consortium, has successfully won the tender for a prime mixed-use commercial and residential site at Hougang Central. The winning bid stands at approximately S\$1.5 billion, or S\$1,179 per square foot per plot ratio.
• Strategic Site Details: The 99-year leasehold plot comprises a total site area of 504,820 sq ft, with the commercial component having a net lettable area of approximately 300,000 sq ft. CICT will develop and own 100% of the commercial component.
• Development Cost and Expected Returns: The commercial component will require an estimated development cost of S\$1.1 billion, with an anticipated yield on cost exceeding 5%. Completion is targeted for 2030/2031.
• Financing Structure: Development will be funded progressively with internal resources and external borrowings. Payment terms include a 5% tender deposit, 25% (including deposit) due within 28 days, and the balance within 90 days post-award.
• Portfolio Impact: This investment significantly strengthens CICT’s Singapore-centric portfolio, enhances its value creation strategy, and marks CICT’s entry into the fast-growing northeast region of Singapore.

Investment Rationale and Strategic Upside

• Prime Location & Connectivity: This is the first government land sale in Hougang since 2019 and will deliver a vibrant hub integrated with Hougang MRT, a new bus interchange, and town plaza. Direct MRT links to both the North-East Line and future Cross Island Line, plus proximity to parks, sports facilities, and schools, position the site as a major transport and community node.
• Strong Catchment and Demand Drivers: Hougang is among Singapore’s top 10 most populous precincts, with about 230,000 residents. The development will also introduce approximately 830 new residential units, further strengthening the catchment and supporting sustainable demand for the retail and lifestyle offerings.
• Untapped Retail Potential: Currently, Hougang has only 2.8 sq ft of private retail space per capita, significantly below the national average of 11.4 sq ft. The new commercial space is set to be the largest in Hougang, serving as a key anchor for the precinct’s next growth phase.
• Development Control and Yield: Entering at the development phase allows CICT to directly shape the design, positioning, and leasing of the commercial component, aligning with evolving consumer trends and securing an attractive yield on cost above 5%—a figure that compares favorably to recent market transactions.

Important Considerations for Shareholders

• Non-Discloseable Transaction: The deal is classified as a non-discloseable transaction under Chapter 10 of the SGX Listing Manual and is not expected to have any material effect on CICT’s net asset value per unit or distribution per unit for the financial year ending 31 December 2026. However, the scale, yield potential, and strategic expansion could influence future valuations and investor sentiment.
• Contractual Arrangements: Joint development agreements and undertakings have been or will be entered into between the consortium members to govern the project’s execution.
• Forward-Looking Risks: The announcement contains forward-looking statements subject to risks, including market conditions, cost of capital, competition, and government policy changes. Investors should remain mindful of potential variability in outcomes.

Conclusion: Significant Growth Catalyst for CICT

The acquisition of the Hougang Central mixed-use site represents a significant milestone for CICT, providing an opportunity to secure a rare, large-scale, and well-located suburban commercial asset in a high-growth region of Singapore. The project is expected to generate sustainable returns, expand CICT’s footprint, and reinforce its position as a leading proxy for Singapore commercial real estate. Given the size, strategic value, and attractive projected yields, this announcement is highly relevant to investors and could potentially be a share price catalyst, especially as progress milestones are achieved and the retail offering nears completion.

Disclaimer

The above article is for informational purposes only and does not constitute investment advice or an offer to acquire or sell any securities. Past performance is not indicative of future results. Actual results may differ due to risks and uncertainties, including but not limited to economic conditions, changes in government policy, and market competition. Investors are advised to conduct their own due diligence and seek professional advice before making investment decisions.

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