SC Capital buys Singapore shopping centre for core-plus fund

SC Capital Partners has bought a suburban shopping mall in Singapore from AEW for S$230m (€150m).

SC Capital acquired the centre, its single largest investment yet, for SCORE+, its open-ended fund that invests in core and core-plus property across Asia- Pacific.

The asset, Rivervale Mall, is located in Sengkang district, part of what is known as the ’heartland’ of Singapore, where the majority of Singaporeans live in government-built apartment blocks.

“In keeping with SCORE+’s strategy, we intend to hold Rivervale Mall for the long term simply because of its stable cash flow,” said Suchad Chiaranussati, SC Capital’s founder and chairman.

The mall, which has a current in-place yield of 4.4%, has a low passing rent which SCORE+ believes will stabilise at over 5% through positive rental reversions.

Although the mall recently underwent capital improvements and maintains a high current occupancy of about 97%, Suchad said more enhancements – such as improving tenant positioning and increasing shopper footfall – could be undertaken to improve its already attractive yield.

He said the investment rationale behind the purchase was that the non-discretionary nature of the mall would provide a defensive and stable investment catering to non-discretionary spending customers.

Liwen Ho, SC Capital’s director investor relations, told IPE Real Assets that SCORE+, which raised US$452m in 2017, had since been closed to new investors.

It might reopen for new investment and redemptions in the third or fourth quarter, either when 95% of its capital had been deployed or three years after the last close, she said.

SCORE+ targets assets in the gateway cities of Japan, Australia, New Zealand, Singapore, Hong Kong, and South Korea. Its portfolio of 11 assets comprises student accommodation, retail properties, offices and logistics warehouses.

AEW bought Rivervale Mall from CapitaLand Mall Trust in 2015 for S$191m. Following the sale, AEW will have three assets left in Singapore’s central business district.

Last year, it bought these for a total of S$752m, among them an office tower, Twenty Anson, purchased for S$526m from CapitaLand Commercial Trust.