FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management method to optimize profile structure and its revenues. The supervisor claims it plans to utilize the net earnings of $33.8 million to pay back “particular financial obligation”, which will minimize FCT’s aggregate leverage. The net total accounts for some other divestment related expenses of roughly $0.2 million and transfer of tenants’ down payment of roughly $0.5 million.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), participated in a sale and acquisition contract (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 property development at 51 Yishun Central 1 (additionally known 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 profit 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 purchase, Frasers Property will assume full possession of Yishun 10 and operations at Yishun 10 will continue as usual.
Frasers Property currently possesses the just other property at Yishun 10, which 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.
The properties, situated next to Northpoint City, are held under subsidiary strata certifications of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were obtained in 2016 and have a total gross flooring area of 966 sqm and total net lettable area (NLA) of 961 sqm.
That stated, 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, via Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s executive, has a 37.94% interest in FCT. FCT’s executive is also a wholly-owned subsidiary of Frasers Property Limited, in which the latter is regarded as a “managing shareholder” of the supervisor.
According to Frasers Property, the transaction was made to “optimize capital efficiency via active profile management initiatives”. “The suggested deal will potentially enable the group to generate additional worth from the longer-term redevelopment potential of the asset,” it includes.
The divestment is not subject to FCT’s unitholders’ authorization as it composes 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 advertisement manual and paragraph 5.2 (b) of the property funds appendix.
The sale consideration factored in the most recent 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 evaluation of $34 million and Savills’ valuation of $35 million.
