FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (similarly called Yishun 10) to Frasers Property Limited for $34.5 million.
The divestment is exempt 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 short of the essential 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.
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Upon the finalization of the most recent suggested purchase, Frasers Property will assume full possession of Yishun 10 and operations at Yishun 10 will continue customarily.
The sale consideration factored in the most recent 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 value is the average of JLL’s valuation of $34 million and Savills’ evaluation of $35 million.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), participated in a sale and purchase contract (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
According to FCT, the divestment remains in line with the supervisor’s proactive portfolio management strategy to optimise profile composition and its revenues. The manager states it plans to utilize the net proceeds of $33.8 million to pay back “certain debt”, which will lower FCT’s aggregate leverage. The net amount accounts for some other divestment associated costs of around $0.2 million and transfer of lessees’ security deposits of about $0.5 million.
The properties, positioned alongside Northpoint City, are held under subsidiary strata certifications of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were acquired in 2016 and have an overall gross flooring area of 966 sqm and total net lettable area (NLA) of 961 sqm.
That claimed, the divestiture is deemed to be an interested person transaction and interested party transaction given that Frasers Property is the REIT’s sponsor. Frasers Property, via Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s manager, possesses a 37.94% interest in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is considered as a “managing shareholder” of the supervisor.
Frasers Property already owns the just various other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The business got it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
According to Frasers Property, the transaction was made to “optimize capital productivity through active portfolio management initiatives”. “The suggested purchase will potentially enable the group to generate additional value from the longer-term redevelopment possibility of the asset,” it includes.
Given 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 handbook.
