FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (similarly referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
The sale consideration factored in the latest 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 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 via active account management initiatives”. “The recommended deal will potentially enable the group to generate additional value from the longer-term redevelopment capacity of the asset,” it includes.
The divestment is exempt to FCT’s unitholders’ authorization 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 required 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.
Frasers Property currently possesses the only other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The business obtained it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
Upon the finalization of the most up to date suggested deal, Frasers Property will conclude full ownership of Yishun 10 and operations at Yishun 10 will proceed customarily.
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 manual.
That claimed, 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 supervisor, has a 37.94% stake in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered a “controlling shareholder” of the supervisor.
Frasers Property, via 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.
The properties, situated beside Northpoint City, are held under branch strata certifications of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were gotten in 2016 and have a complete gross flooring area of 966 sqm and overall net lettable area (NLA) of 961 sqm.
According to FCT, the divestment remains in line with the supervisor’s proactive portfolio management strategy to optimize profile composition and its returns. The supervisor states it means to use the net earnings of $33.8 million to settle “certain financial debt”, which will certainly decrease FCT’s aggregate leverage. The net amount accounts for other divestment associated costs of approximately $0.2 million and transfer of lessees’ down payment of roughly $0.5 million.
