FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), entered into a sale and purchase contract (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
The divestment is exempt to FCT’s unitholders’ confirmation as it comprises 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 most current audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management strategy to optimise profile structure and its yields. The supervisor states it intends to utilize the net earnings of $33.8 million to repay “particular financial obligation”, which will decrease FCT’s aggregate leverage. The net total accounts for some other divestment associated expenses of about $0.2 million and transfer of renters’ down payment of roughly $0.5 million.
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (also known as Yishun 10) to Frasers Property Limited for $34.5 million.
Frasers Property currently owns the only 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.
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 agreed property worth is the average of JLL’s appraisal of $34 million and Savills’ valuation of $35 million.
According to Frasers Property, the proceeding was made to “optimise capital performance through active profile management initiatives”. “The recommended transaction will potentially enable the group to produce additional worth from the longer-term redevelopment possibility of the asset,” it adds.
The properties, positioned 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 floor area of 966 sqm and total net lettable area (NLA) of 961 sqm.
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 earnings 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.
That claimed, 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, through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s executive, possesses a 37.94% claim in FCT. FCT’s supervisor is in addition a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is considered a “managing shareholder” of the supervisor.
Upon the finalization of the most recent recommended purchase, Frasers Property will assume full possession of Yishun 10 and proceedings at Yishun 10 will continue customarily.
