FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
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 assessment of $34 million and Savills’ evaluation of $35 million.
Upon the completion of the most recent suggested transaction, Frasers Property will assume full ownership of Yishun 10 and proceedings at Yishun 10 will continue customarily.
The properties, located next to Northpoint City, are held under branch strata certifications of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were gotten in 2016 and have a total gross flooring area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
Frasers Centrepoint Trust (FCT) has divested 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.
Frasers Property already possesses the just various other property at Yishun 10, which 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.
The divestment is not subject 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 lower than the essential 5% of FCT’s latest audited NTA and NAV under Rule 906( 1) of the advertisement manual and paragraph 5.2 (b) of the property funds appendix.
Frasers Property, via its wholly-owned subsidiary, Lion (Singapore), entered into a sale and acquisition arrangement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
That stated, 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, through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s executive, possesses a 37.94% interest in FCT. FCT’s manager is also a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered as a “controlling shareholder” of the supervisor.
According to FCT, the divestment is in line with the manager’s proactive portfolio management approach to optimise portfolio structure and its returns. The supervisor states it means to utilize the net proceeds of $33.8 million to repay “certain financial debt”, that will certainly decrease FCT’s aggregate leverage. The net sum accounts for other divestment related expenditures of about $0.2 million and transfer of renters’ down payment of around $0.5 million.
According to Frasers Property, the proceeding was made to “optimize capital performance through active account management initiatives”. “The proposed purchase will potentially permit the group to produce additional worth from the longer-term redevelopment possibility of the asset,” it includes.
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 earnings of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing manual.
