Paragon REIT divests The Rail Mall for $78.5M, primarily to reduce outstanding debt

SINGAPORE: Paragon Real Estate Investment Trust (REIT) has successfully divested The Rail Mall for a sum of $78.5 million, significantly exceeding its previous valuation of $62.0 million as of December 2023.

The Rail Mall, a unique retail property along Upper Bukit Timah Road, has been a well-known fixture in Singapore’s retail landscape.

Unlike traditional malls, The Rail Mall is characterized by its distinctive row of shophouses, which offer a blend of retail, dining, and lifestyle options in a charming and laid-back setting.

The mall has long been popular with locals and tourists, particularly due to its proximity to the Rail Corridor, a green belt that runs through the western part of Singapore.

Paragon REIT has stated that the net proceeds from this divestment will primarily be used to reduce the outstanding debt obligations associated with The Rail Mall.

The remaining funds will be distributed to unitholders as a special distribution of $0.0185 per unit. This special distribution is scheduled to be paid on Oct 7, 2024.

The REIT also highlighted the impact of this special distribution on the Distribution Per Unit (DPU) for the year. For the first half of 2024, Paragon REIT reported a DPU of $0.0232.

With the inclusion of the special distribution, the total DPU for year-to-date FY2024 will rise to $0.0417, representing a significant increase for its unitholders.

This divestment is part of Paragon REIT’s broader strategy to streamline its portfolio, focusing on properties that offer the most significant growth potential and align with its long-term investment objectives.

By reducing debt and returning capital to unitholders, Paragon REIT aims to maintain a strong balance sheet and deliver sustainable returns.

/TISG