CapitaLand China Trust (AU8U) Status update summary

Transaction overview and structure

• Signed equity transfer agreement for sale of CapitaMall Yuhuating to CLCR, executed in a two-step process to transfer reinvestment obligations and allow flexible use of proceeds.

• Proceeds from divestment can be used for debt repayment, unit buybacks, or general working capital, with a 5% strategic stake in CLCR valued at over SGD 20 million.

• CapitaLand group (including CLCT, CMA, and CLD) will collectively hold at least 20% in CLCR, as required by C-REIT regulations.

• The transaction is subject to regulatory and unitholder approvals, with the final divestment price not lower than RMB 748 million.

• Timeline includes EGM and circular dispatch in Q3 2025, with formal listing of CLCR anticipated in Q4 2025.

Financial details and valuation

• Two independent valuations for CapitaMall Yuhuating: CBRE at RMB 780 million and Colliers at RMB 748 million; floor price set at RMB 748 million.

• Final divestment price may exceed the floor price, depending on IPO market conditions.

• Pro forma DPU and NAV per unit remain stable or slightly improve post-transaction, depending on use of proceeds.

• Aggregate leverage expected to decrease from 42.6% to as low as 41.3% post-transaction.

• Selling at a higher price (e.g., RMB 790 million) improves all financial metrics, with exit NPI yield tightening from 6.8% to 6.4%.

Market context and C-REIT dynamics

• C-REITs in China typically list at 5%+ DPU yield, now trading at 4–4.2% due to strong demand and price appreciation.

• Domestic liquidity and low yields on government/corporate bonds drive strong demand for C-REITs, with recent listings seeing high oversubscription.

• CLCR will be the first foreign-sponsored retail C-REIT in China, targeting domestic investors, while CLCT targets global investors.

• Broadens access to China's domestic capital market and differentiates from other S-REITs.

• Provides exposure to the growing C-REIT market, offering potential capital appreciation.