The One and Only
The sale of Mercatus’ S$4.1bn suburban retail portfolio has created a buzz in the market especially when a rare portfolio of gems is up for sale. Given the significant operational scale and lack of availability of suburban assets for sale in Singapore, it has garnered strong interests from investors, especially retail landlords / operators.
The last time we saw a rare portfolio of Singapore retail assets transacted was in 2019 when Frasers Property Group (Frasers Centrepoint Limited together with its sponsor Frasers Property Limited) launched a buyout of PGIM’s c.S$2bn worth of retail assets.
The Mercatus portfolio comprises of 4 suburban malls, where we believe at least 3 out of the 4 assets are “dominant malls” and stand out in their own respective suburban vicinity, in our view. The assets are situated at big residential catchment areas and strategically located near / at key transport nodes (MRT stations and bus interchanges).
Please refer to our previous report for more details on the Mercatus portfolio – Singapore Retail REITs – prized portfolio up for grabs.
According to media reports, CICT has been named as one of the contenders for the portfolio, along with Link REIT and Frasers Centrepoint Limited. We believe CICT is probably the strongest contender among the local retailers given its larger size post the CCT-CMT merger compared to its peers. Moreover, CICT being the largest retail landlord / operator in Singapore would be able to draw synergies and economies of scale when both portfolios are combined.
Please refer to our previous report for our views on the comparisons of the candidates for the portfolio – Regional Real Estate – May the Best Man win Mercatus