FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
The properties, located alongside Northpoint City, are hosted under branch strata certifications 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.
Frasers Property already possesses the just various other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm got it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management approach to optimise account structure and its revenues. The supervisor states it means to utilize the net profits of $33.8 million to repay “particular financial debt”, which will lower FCT’s aggregate leverage. The net amount accounts for many others divestment related costs of about $0.2 million and transfer of occupants’ security deposits of about $0.5 million.
That said, the divestment is regarded 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% stake in FCT. FCT’s manager is in addition a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered as a “controlling shareholder” of the manager.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), entered into a sale and purchase arrangement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
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 agreed property worth is the standard of JLL’s appraisal of $34 million and Savills’ evaluation of $35 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 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 manual.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (additionally referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
According to Frasers Property, the transaction was made to “optimize capital performance with active profile management initiatives”. “The recommended purchase will potentially permit the group to create additional value from the longer-term redevelopment capacity of the asset,” it adds.
Upon the finalization of the latest recommended deal, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will proceed customarily.
The divestment is not subject to FCT’s unitholders’ confirmation 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 requisite 5% of FCT’s latest audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
