NTUC trims size of shopping mall portfolio sale: Sources

Singapore shopping mall owner NTUC Enterprise Co-operative Ltd has scaled down the size of a planned asset sale to about $3 billion, or three-fourths of the original proposal, while short-listing three potential buyers, sources familiar with the matter said.

Singapore’s rising interest rates and a tepid growth outlook have prompted Mercatus Co-operative Ltd, a unit of NTUC that manages the assets and was exploring the sale, to remove at least one project from the prospective deal, the sources added.

The sources declined to be identified as they were not authorised to speak to the media.

Mercatus declined to comment while NTUC referred inquiries to Mercatus.

Despite the trimmed size, the sale would mark the biggest real estate deal so far this year in the city-state, Refinitiv data shows.

“The portfolio that was being offered has been reduced. It’s a difficult market situation,” said one source with knowledge of the sale process.

The sources said the remaining assets include retail malls Jurong Point, Nex, and Swing By @ Thomson Plaza. AMK Hub, a retail mall in the Ang Mo Kio residential area, is no longer part of the sale, the sources added.

Mercatus co-owns Nex, its website shows.

The sources said the three short-listed parties are Frasers Property, part of Thai billionaire Charoen Sirivadhanabhakdi’s group, Hong Kong-based Link Real Estate Investment Trust, and CapitaLand Integrated Commercial Trust (CICT), part of Singapore-based CapitaLand Investment Ltd.

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A CICT spokesperson said in an emailed response that it regularly holds discussions with other parties and evaluates possible opportunities, but did not comment directly on the NTUC sale.

Frasers Property and Link Real Estate Investment Trust (REIT) declined to comment.

Singapore’s growth prospects have dimmed along with the global economic outlook. The government in August lowered its full-year growth projection to a three per cent to four per cent range, from its prior three per cent to five per cent outlook, while second-quarter gross domestic product (GDP) growth was revised down to an annual 4.4 per cent from 4.8 per cent.

Local interest rates are also rising sharply, in line with global trends, with the Singapore interbank offered rate hovering at 3.38 per cent compared with 1.2 per cent at mid-June, when Mercatus announced the review of some of its real estate assets and holdings.

With more than $10 billion of assets under management, Mercatus is one of the largest owners of retail mall space in Singapore, its website shows.

The group’s portfolio includes commercial assets in Singapore and Sydney. It also owns properties within retail malls in Singapore and an office skyscraper, One Marina Boulevard, in the city-state’s central business district.