FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (additionally called Yishun 10) to Frasers Property Limited for $34.5 million.
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 profits attributable to the properties of $0.2 million is 0.2% of FCT’s net profit of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing guidebook.
The Orie City Developments Limited, Frasers Property and Sekisui House
According to FCT, the divestment is in line with the manager’s proactive portfolio management method to optimise account structure and its yields. The manager says it intends to utilize the net earnings of $33.8 million to repay “specific financial obligation”, which will reduce FCT’s aggregate leverage. The net amount accounts for other divestment related costs of roughly $0.2 million and transfer of lessees’ security deposits of approximately $0.5 million.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), participated in a sale and purchase contract (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
The properties, located alongside Northpoint City, are hosted under branch strata certifications of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were obtained in 2016 and have a complete gross floor surface area of 966 sqm and total net lettable area (NLA) of 961 sqm.
The divestment is not subject to FCT’s unitholders’ authorization as it composes 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 Frasers Property, the transaction was made to “optimize capital performance through active account management initiatives”. “The recommended deal will possibly enable the group to produce additional worth from the longer-term redevelopment potential of the asset,” it adds.
Upon the completion of the latest recommended purchase, Frasers Property will conclude full ownership of Yishun 10 and business at Yishun 10 will continue as usual.
The sale consideration factored in the latest 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 value is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
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 supervisor, possesses a 37.94% interest in FCT. FCT’s executive is even a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is considered a “managing shareholder” of the manager.
Frasers Property already possesses 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.
