FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
According to Frasers Property, the transaction was made to “optimize capital performance with active profile management initiatives”. “The suggested deal will potentially enable the group to create additional value from the longer-term redevelopment possibility of the asset,” it adds.
According to FCT, the divestment remains in line with the manager’s proactive portfolio management strategy to optimize profile composition and its yields. The manager says it intends to use the net earnings of $33.8 million to pay back “certain debt”, that will certainly lower FCT’s aggregate leverage. The net sum accounts for many others divestment associated expenditures of around $0.2 million and transfer of renters’ security deposits of approximately $0.5 million.
The properties, positioned alongside Northpoint City, are hosted 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 total net lettable area (NLA) of 961 sqm.
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.
The sale consideration factored in the current 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 agreed property value is the average of JLL’s assessment of $34 million and Savills’ valuation of $35 million.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (also known as Yishun 10) to Frasers Property Limited for $34.5 million.
The divestment is exempt to FCT’s unitholders’ authorization as it makes up 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and short of the requisite 5% of FCT’s most recent audited NTA and NAV under Rule 906( 1) of the advertisement manual and paragraph 5.2 (b) of the property funds appendix.
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 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 guidebook.
That claimed, the divestment is deemed 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 manager, has a 37.94% claim in FCT. FCT’s executive is in addition a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is regarded as a “controlling shareholder” of the supervisor.
Frasers Property already possesses the only other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The firm obtained it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
Upon the finalization of the most recent recommended purchase, Frasers Property will conclude full ownership of Yishun 10 and business at Yishun 10 will proceed as usual.
