Croesus Retail Trust to acquire Japanese suburban retail mall for $95.2 mil

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SINGAPORE (Sept 29): Croesus Retail Trust is acquiring Torius Property, a retail property located in Fukuoka, Japan, for a purchase consideration of JPY8 billion ($95.2 million), through debt and equity financing.

The consideration represents a 3.7% discount to valuation of JPY8.3 billion.

Torius Property is a large-scale suburban retail mall located in the satellite town of Hisayama-machi of Kasuya-gun, which is 13 km from central Fukuoka City on Japan’s Kyushu Island.

Comprising 36 single- or double-storey buildings, Torius Property occupies a land area of 257,173 sqm and has a net lettable area of 77,032 sqm.

The leasehold interest of the main parcel of land on which Torius Property is sited will expire on Feb 9, 2060.

Assuming that Torius Property was acquired by CRT on July 1, 2014 and held for the financial year ended 30 June 2015 (FY2015), the pro forma Distribution per Unit (DPU) yield of CRT's enlarged portfolio be 9.41%, compared to the actual DPU yield of the existing portfolio of 9.40%.

To fund the acquisition, there will be an issue of new Japanese onshore five-year specified bonds of JPY4 billion.

There is also a rights issue of 114.2 million units in CRT at 61 cents each to raise gross proceeds of $69.7 million.

Shareholders will be entitled to subscribe to 22 rights units for every 100 units held.

The issue price represents a discount of 29.1% to the closing price of 86 cents per unit on Sept 28, and a discount of 25.2% to the theoretical ex-rights price of 81.5 cents per unit.

The manager of CRT says Torius Property offers a diverse and unique mix of 145 tenants.

Some of them include Costco (wholesale supermarket), Nafco (interior and furniture, DIY), United Cinema (cinema), Rakuichi Rakuza (amusement centre) and Daiso (100 yen shop).

Other notable facilities at Torius Property include a petting zoo, as well as an outdoor barbecue park.