FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
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 less than the required 5% of FCT’s most recent audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
Upon the finalization of the latest suggested transaction, Frasers Property will assume full possession of Yishun 10 and proceedings at Yishun 10 will continue customarily.
According to Frasers Property, the deal was made to “optimise capital performance with active profile management initiatives”. “The proposed deal will possibly permit the group to produce additional value from the longer-term redevelopment capacity of the asset,” it includes.
The properties, situated next to Northpoint City, are operated 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 floor surface area of 966 sqm and total net lettable area (NLA) of 961 sqm.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (additionally known as Yishun 10) to Frasers Property Limited for $34.5 million.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management approach to optimise profile composition and its revenues. The manager claims it means to utilize the net profits of $33.8 million to settle “particular financial obligation”, which will certainly decrease FCT’s aggregate leverage. The net total accounts for many others divestment related expenses of approximately $0.2 million and transfer of occupants’ security deposits of around $0.5 million.
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 concurred property worth is the average of JLL’s appraisal of $34 million and Savills’ evaluation of $35 million.
Considered 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 revenue of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing handbook.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), entered into a sale and purchase agreement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
Frasers Property already owns the only 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.
That said, the divestiture is deemed to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, via Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s executive, owns a 37.94% claim in FCT. FCT’s manager is also a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is regarded as a “controlling shareholder” of the supervisor.
