FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
According to Frasers Property, the deal was made to “optimize capital performance via active portfolio management initiatives”. “The recommended purchase will potentially permit the group to generate additional worth from the longer-term redevelopment potential of the asset,” it includes.
Frasers Property, via its wholly-owned subsidiary, Lion (Singapore), participated in a sale and acquisition contract (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (additionally referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
Upon the finalization of the latest suggested purchase, Frasers Property will assume full possession of Yishun 10 and business at Yishun 10 will continue customarily.
The properties, located beside Northpoint City, are operated under branch strata certificates of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were obtained in 2016 and have an overall gross floor area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
Frasers Property currently owns the just other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The company obtained it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
Considered that the net asset value (NAV) of the real properties of $33.5 million is 0.8% to FCT’s NAV of $4.15 billion and the net earnings attributable to the properties of $0.2 million is 0.2% of FCT’s net earnings of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing manual.
The divestment is not subject to FCT’s unitholders’ authorization as it comprises 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and less than the required 5% of FCT’s most current audited NTA and NAV under Rule 906( 1) of the advertisement manual and paragraph 5.2 (b) of the property funds appendix.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management method to optimize profile structure and its revenues. The manager says it means to utilize the net profits of $33.8 million to pay back “particular financial debt”, which will decrease FCT’s aggregate leverage. The net amount accounts for some other divestment related expenditures of roughly $0.2 million and transfer of lessees’ down payment of approximately $0.5 million.
The sale consideration factored in the current valuations of the properties as at May 31. The properties were valued by Jones Lang LaSalle Property Consultants Pte Ltd (JLL) and Savills Valuation and Professional Services (S) Pte Ltd. The concurred property worth is the average of JLL’s evaluation of $34 million and Savills’ valuation of $35 million.
That stated, the divestment is regarded to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s supervisor, has a 37.94% interest in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is regarded as a “controlling shareholder” of the manager.
