FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
According to FCT, the divestment remains in line with the supervisor’s proactive portfolio management method to optimize portfolio structure and its returns. The manager claims it plans to use the net profits of $33.8 million to settle “certain debt”, that will minimize FCT’s aggregate leverage. The net total accounts for other divestment associated expenses of approximately $0.2 million and transfer of occupants’ down payment of about $0.5 million.
Upon the finalization of the most recent proposed purchase, Frasers Property will conclude full ownership of Yishun 10 and operations at Yishun 10 will continue customarily.
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.
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (similarly called Yishun 10) to Frasers Property Limited for $34.5 million.
Frasers Property already possesses the just other property at Yishun 10, that 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.
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 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 Frasers Property, the transaction was made to “optimize capital efficiency with active profile management initiatives”. “The suggested transaction will possibly permit the group to produce additional value from the longer-term redevelopment possibility of the asset,” it adds.
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 earnings of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing guidebook.
The properties, positioned alongside Northpoint City, are hosted under subsidiary strata certificates of title. The lots have a leasehold term of 99 years starting from April 1, 1990. They were acquired in 2016 and have a complete gross flooring area of 966 sqm and total net lettable area (NLA) of 961 sqm.
That said, the divestiture is considered to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s manager, owns a 37.94% claim in FCT. FCT’s executive is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered as a “managing shareholder” of the supervisor.
The sale consideration factored in the most recent valuations of the real estates 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 value is the standard of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
