WCT Holdings Bhd has put forward a proposal to sell three of its retail properties, valued at RM2.44 billion, to a newly created real estate investment trust (REIT) called Paradigm REIT, which will be listed on the Main Market of Bursa Malaysia.

According to a bourse filing, the properties involved are Bukit Tinggi Shopping Centre, to be sold by Gemilang Waras Sdn Bhd, a subsidiary of WCT; Paradigm Mall Petaling Jaya, to be sold by Jelas Puri Sdn Bhd, in which WCT holds a 70% joint venture stake; and Paradigm Mall Johor Bahru, to be sold by WCT Hartanah Jaya Sdn Bhd, another subsidiary of WCT.

The sale will be carried out via agreements with RHB Trustees Bhd, representing Paradigm REIT, pending approval from the Securities Commission (SC).

Paradigm REIT plans to finance the purchase through the issuance of 1.6 billion new units at an estimated RM1 per unit, along with RM837 million in cash raised from medium-term notes issued by a special purpose vehicle.

Of the new units, 350 million will go to Gemilang Waras, 230 million to Jelas Puri, and the remaining units to WCT Hartanah Jaya.

Additionally, WCT Hartanah Jaya will offer 560 million units, or about 35% of the total, with 254.66 million allocated for retail investors and 305.34 million for institutional buyers.

The final issue price will be determined later.

This REIT initiative, first announced by WCT in July, is part of a strategy to unlock the value of its property assets, with proceeds directed towards reducing debt and pursuing business growth.

The latest filing outlines that Paradigm REIT will be governed by a deed of trust, with Paradigm REIT Management Sdn Bhd named as the manager, and Henry Butcher Malaysia (Mont’Kiara) Sdn Bhd proposed as the property manager.

The REIT’s total issued size will consist of 1.6 billion units, expected to raise approximately RM1.4 billion, of which 60% will be used to pay down WCT’s debts, and 38% to repay the borrowings of its subsidiaries.

All elements of the proposal, including the establishment, sale, offering, and listing, are subject to approval from regulatory bodies such as the SC and Bursa Malaysia, as well as WCT’s shareholders, for which an EGM will be held.

WCT plans to submit the necessary applications within the next two months, targeting completion by the first quarter of 2025.

WCT’s shares closed 3 sen lower at RM1.03 today, giving the company a market capitalisation of RM1.54 billion. –TMR