FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
According to Frasers Property, the proceeding was made to “optimize capital performance via active portfolio management initiatives”. “The proposed transaction will possibly enable the group to create additional worth from the longer-term redevelopment potential of the asset,” it includes.
The sale consideration factored in the current valuations of the properties as at May 31. The properties were worth by Jones Lang LaSalle Property Consultants Pte Ltd (JLL) and Savills Valuation and Professional Services (S) Pte Ltd. The agreed property worth is the average of JLL’s evaluation of $34 million and Savills’ assessment of $35 million.
That stated, the divestment is considered to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, with Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s executive, owns a 37.94% claim in FCT. FCT’s supervisor is also a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is considered a “controlling shareholder” of the supervisor.
Frasers Property already owns the just other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm got it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
The properties, positioned alongside Northpoint City, are hosted under subsidiary strata certifications of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were obtained in 2016 and have a total gross floor surface area of 966 sqm and total net lettable area (NLA) of 961 sqm.
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (also called Yishun 10) to Frasers Property Limited for $34.5 million.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management method to optimize account structure and its returns. The manager claims it means to use the net profits of $33.8 million to pay off “particular financial obligation”, that will certainly decrease FCT’s aggregate leverage. The net sum accounts for many others divestment related expenditures of about $0.2 million and transfer of tenants’ down payment of approximately $0.5 million.
Upon the completion of the most up to date proposed purchase, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will proceed as usual.
Considered that the net asset value (NAV) of the estates of $33.5 million is 0.8% to FCT’s NAV of $4.15 billion and the net revenues 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.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), participated in a sale and purchase arrangement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
The divestment is exempt to FCT’s unitholders’ approval as it composes 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and lower than the required 5% of FCT’s latest audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
