FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Centrepoint Trust (FCT) has unloaded 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.
Given 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 revenues attributable to the properties of $0.2 million is 0.2% of FCT’s net revenue of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing handbook.
Frasers Property already possesses the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm obtained it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
That claimed, the divestment is regarded to be an interested person transaction and interested party transaction given that Frasers Property is the REIT’s sponsor. Frasers Property, with Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s supervisor, has a 37.94% claim in FCT. FCT’s executive is also a wholly-owned subsidiary of Frasers Property Limited, in which the latter is regarded as a “controlling shareholder” of the supervisor.
Upon the completion of the most up to date recommended deal, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will proceed customarily.
According to Frasers Property, the proceeding was made to “optimize capital efficiency through active profile management initiatives”. “The suggested deal will potentially permit the group to generate additional value from the longer-term redevelopment potential of the asset,” it includes.
The properties, positioned next to Northpoint City, are operated under subsidiary strata certificates of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were gotten in 2016 and have an overall gross flooring area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
The divestment is not subject to FCT’s unitholders’ approval as it comprises 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and short of the required 5% of FCT’s most recent audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
The sale consideration factored in the most recent valuations of the real estates 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 concurred property worth 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), entered into a sale and purchase arrangement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
According to FCT, the divestment is in line with the manager’s proactive portfolio management method to optimise profile structure and its returns. The supervisor states it intends to make use of the net proceeds of $33.8 million to settle “specific debt”, which will certainly decrease FCT’s aggregate leverage. The net amount accounts for other divestment related expenses of about $0.2 million and transfer of occupants’ down payment of about $0.5 million.
