CapitaLand China Trust Issues Divestment Fee Units Following CapitaMall Yuhuating Divestment

Key Developments in Recent CapitaLand China Trust (CLCT) Transaction

CapitaLand China Trust (CLCT), managed by CapitaLand China Trust Management Limited, has announced the issuance of new units as payment for a divestment fee related to a significant recent transaction. This move is part of CLCT’s participation in the newly listed CapitaLand Commercial C-REIT (CLCR) on the Shanghai Stock Exchange.

Summary of the Transaction

• Divestment: CLCT, through its wholly owned subsidiary (the Vendor), completed the divestment of 100% equity interest in Changsha ProjectCo, which holds CapitaMall Yuhuating, to the newly listed CLCR.
• Completion Date: The divestment was completed on 31 October 2025.
• Payment of Divestment Fee: As stipulated in the Trust Deed, a divestment fee of S\$0.7 million was payable to the Manager.
• Mode of Payment: The fee was satisfied by issuing 923,238 new units (“Divestment Fee Units”) to the Manager at an issue price of S\$0.8017 per unit. The price was determined based on the volume weighted average price (VWAP) for all trades on the Singapore Exchange over the 10 business days immediately preceding 31 October 2025.
• Regulatory Compliance: As the divestment is classified as an “interested party transaction” under the Property Funds Appendix, the issued units cannot be sold within one year of the issuance date.

Shareholder Implications and Price-Sensitive Information

• Increase in Manager’s Stake: Following this issuance, the Manager now holds 3,744,536 units in CLCT, increasing its alignment with unitholder interests.
• Total Units in Issue: The total number of CLCT units in issue has increased to 1,740,902,808.
• Non-Cash Payment: The decision to pay the divestment fee in units rather than cash helps preserve CLCT’s cash reserves, which may be viewed positively by investors focused on liquidity and capital management.
• Lock-Up Period: The issued units are subject to a one-year lock-up, reducing potential immediate selling pressure from the Manager.
• Strategic Positioning: The participation in the establishment of CLCR and the recycling of assets through such divestments may enhance the long-term growth trajectory and financial flexibility of CLCT, potentially impacting share value as the trust positions itself for further opportunities in China’s infrastructure and commercial real estate market.

Important Notices to Investors

• The past performance of CLCT is not indicative of its future performance.
• Units of CLCT are traded on the Singapore Exchange Securities Trading Limited (SGX-ST) and are not obligations of, deposits in, or guaranteed by the Manager or its affiliates.
• Investors face typical investment risks, including the possible loss of principal.
• Redemption or purchase of units directly from the Manager is not permitted while units are listed; transactions should be made through the SGX-ST.

Conclusion

The divestment of CapitaMall Yuhuating and subsequent issuance of Divestment Fee Units mark a significant step in CLCT’s strategic evolution. By participating in the establishment of the CapitaLand Commercial C-REIT and recycling capital, CLCT is positioning itself to capitalize on new growth opportunities in China’s dynamic real estate market. Investors should monitor the impact of these developments on the trust’s financial metrics, distribution potential, and long-term strategy.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should conduct their own research or consult their financial advisor before making investment decisions. The value of investments may fall as well as rise, and past performance is not indicative of future results.

View CapLand China T Historical chart here