FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
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 concurred property worth is the average of JLL’s assessment of $34 million and Savills’ assessment of $35 million.
Given 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 revenues 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 guidebook.
According to Frasers Property, the transaction was made to “optimize capital productivity through active portfolio management initiatives”. “The proposed transaction will potentially enable the group to create additional worth from the longer-term redevelopment potential of the asset,” it adds.
The divestment is exempt to FCT’s unitholders’ authorization as it comprises 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and short of the requisite 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.
Upon the finalization of the most up to date proposed deal, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will proceed customarily.
The properties, located beside Northpoint City, are held under subsidiary strata certificates of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were gotten in 2016 and have an overall 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 (also referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
Frasers Property already owns the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The business obtained it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
That said, the divestment is considered to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, with Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s supervisor, owns a 37.94% interest in FCT. FCT’s supervisor is also a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is regarded as a “managing shareholder” of the manager.
Frasers Property, through 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 manager’s proactive portfolio management method to optimise profile composition and its revenues. The manager claims it plans to make use of the net earnings of $33.8 million to pay off “particular financial obligation”, that will minimize FCT’s aggregate leverage. The net total accounts for other divestment associated costs of roughly $0.2 million and transfer of renters’ security deposits of roughly $0.5 million.
