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MMP REIT buys 50% of prime retail mall in Chengdu
By Melvin Yong, Channel NewsAsia | Posted: 23 April 2007 2119 hrs


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SINGAPORE : Macquarie MEAG Prime Real Estate Investment Trust (MMP REIT) is buying half of a prime retail mall in Chengdu, China.

The 50 percent stake, costing S$30 million, marks MMP REIT's maiden entry into China's real estate market.

The property, known as Renhe Spring Department Store, is strategically located in the Wuhou District of Chengdu, the capital of Sichuan Province.

The property has a gross floor area of some 101,000 square feet and is owned by the Renhe Spring Group.

The chairman of the Renhe Spring Group, Chen Liren, is a prominent property developer and operator of prime retail and residential properties in Sichuan Province.

MMP REIT has also been granted first right of refusal to Mr Chen's pipeline of opportunities in China.

This includes two prime retail properties in Chengdu with a combined gross floor area of more than 1 million square feet.

MMP REIT said this would give it a concrete platform on which to build a critical mass of prime retail properties in China.

It said the latest acquisition would be yield-accretive to its distribution per unit.

It expects a minimum net income yield of 8 percent.

Separately, in earnings out on Monday, MMP REIT announced a distribution per unit of 1.47 cents for the first quarter.

That is 2 percent higher compared to the same period a year ago, and works out to a yield of 4.89 percent. - CNA/ms