CapitaCommercial Trust, the commercial real estate investment trust established by Singapore-based property developer CapitaLand, will soon tap the Malaysian securitization market with a M$115 million ($30.7 million) CMBS.
The transaction, to be issued through the Aragorn ABS SPV, will finance the acquisition by CCT from its parent of the Wisma Technip office development, located in Kuala Lumpur’s central business district.
CCT will purchase the M$45 million subordinated tranche, which it estimates will yield 6.5% per annum over the seven-year term of the deal. The senior tranches will be offered to Malaysian institutional investors.
CCT has not revealed the likely timing of the deal, but it is rumored Aseambankers has been selected as lead manager.
Senior officials at CCT revealed last week its Malaysian acquisition could be the first of many in 2006, with the REIT eyeing other opportunities in Malaysia, China and Singapore. Further property investments should lead to other CMBS deals if the history of CCT and its parent is any guide.
Although CCT last tapped the market in March 2004 with a S$580 million ($357.8 million) issue from the Silver Loft vehicle, CapitaLand – either through its own vehicle or its retail REIT, CapitaMall Trust – has continued to be one of Asia’s most regular securitizers.
The latest deal will be the 10th tied to CapitaLand, the most recent being a $256 million offering arranged by HSBC in October 2005 (ASR, 10/17/05).
Elsewhere, Thailand’s Government Housing Bank will seek to exploit the growing wealth of Middle Eastern investors when it launches its THB30 billion ($731.6 million) MBS program later this year.
One effect of the rise in oil prices over the past year has been to substantially increase the funds available to investors in the Middle East, creating a demand for investment products that regional supply has been unable to accommodate. Consequently, institutional investors have begun to explore opportunities elsewhere.
Malaysia has benefited from this external bid, with Middle Eastern investor participation a noticeable feature in the rise of its Islamic bond market. GHB, Thailand’s largest mortgage originator with a 38% share, says it has already taken enquiries from Middle Eastern bank investors for its securitization program, even though its plans are still in the early stages.
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