FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Property already possesses the only various other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm acquired it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
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.
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.
The properties, located beside Northpoint City, are hosted under branch strata certificates of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were gotten in 2016 and have a complete gross flooring area of 966 sqm and overall net lettable area (NLA) of 961 sqm.
According to FCT, the divestment remains in line with the supervisor’s proactive portfolio management approach to optimize portfolio structure and its returns. The supervisor claims it intends to make use of the net proceeds of $33.8 million to pay back “particular financial obligation”, that will minimize FCT’s aggregate leverage. The net amount accounts for many others divestment related costs of approximately $0.2 million and transfer of lessees’ security deposits of roughly $0.5 million.
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 less than the required 5% of FCT’s most current audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
According to Frasers Property, the proceeding was made to “optimize capital efficiency via active portfolio management initiatives”. “The recommended deal will potentially enable the group to create additional worth from the longer-term redevelopment capacity of the asset,” it includes.
That stated, the divestment is deemed 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 executive, owns a 37.94% interest in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is regarded as a “managing shareholder” of the manager.
Given that the net asset value (NAV) of the 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 profit of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing handbook.
The sale consideration factored in the latest 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 value is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
Upon the completion of the latest proposed deal, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will continue customarily.
