WCT to launch shopping mall REIT

In a bid to raise funds and reduce its existing debt, WCT Holdings Bhd intends to establish a real estate investment trust (REIT), according to a report from The Star.

The company’s initial plan is to create a trust of four shopping malls with a total net leasable area (NLA) of 3.3 million sq ft as its hotel business is still in the fledgling stage.

“We may consider injecting our hotel business when it is mature,” said WCT Managing Director Peter Taing Kim Hwa in an interview with StarBiz.

Specifically, it aims to place PJ Paradigm and Bukit Tinggi AEON malls into the REIT next year, followed by Gateway@klia2 and JB Paradigm two to three years later.

The first two are existing properties with an estimated combined value of RM1.2 billion, while JB Paradigm Mall is expected to open by September 2016. Sited on a 13-acre land facing the Skudai Highway, the upcoming development will also feature offices, residential towers and a hotel with a development cost of RM1 billion.

“The gross development value of the project is targeted at around RM1.5 billion, spanning over three years,” noted Taing, adding that JB Paradigm Mall will hold a signing ceremony for its anchor tenants on 13 August.

The company aims to finalise its REIT plan by Q4 2015. If it does proceed, the listing is expected to happen by end-2016.

Following the initial public offering (IPO), WCT intends to grow the trust’s NLA to 5 million sq ft and use the funds it raised to pay off some of its debts.

Nevertheless, it plans to retain around 40 percent of the REIT so it would remain as the property manager and controlling stockholder.

As of 31 March, the company’s net gearing level stood at 0.7 times, with total borrowing reaching RM2.4 billion, while it’s cash and cash equivalents amount to RM762.7 million.