FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Property, via its wholly-owned subsidiary, Lion (Singapore), entered into a sale and acquisition 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 approach to optimise account structure and its yields. The manager claims it means to use the net proceeds of $33.8 million to repay “particular financial obligation”, which will decrease FCT’s aggregate leverage. The net sum accounts for some other divestment associated expenses of about $0.2 million and transfer of renters’ security deposits of approximately $0.5 million.
According to Frasers Property, the transaction was made to “optimise capital performance through active account management initiatives”. “The suggested purchase will possibly enable the group to generate additional worth from the longer-term redevelopment potential of the asset,” it adds.
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 value is the standard of JLL’s assessment of $34 million and Savills’ evaluation of $35 million.
The divestment is not subject to FCT’s unitholders’ approval 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 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.
Frasers Property already owns the only other property at Yishun 10, that 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.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (similarly referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
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 guidebook.
Upon the completion of the latest suggested deal, Frasers Property will assume full ownership of Yishun 10 and proceedings at Yishun 10 will proceed customarily.
The properties, situated beside Northpoint City, are held under subsidiary strata certificates of title. The lots have a leasehold term of 99 years starting from April 1, 1990. They were gotten in 2016 and have a total gross floor surface area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
That said, 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 supervisor, possesses a 37.94% stake in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is regarded as a “controlling shareholder” of the supervisor.
