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 optimise account composition and its revenues. The supervisor says it means to use the net proceeds of $33.8 million to settle “particular debt”, that will decrease FCT’s aggregate leverage. The net total accounts for other divestment related costs of approximately $0.2 million and transfer of lessees’ security deposits of roughly $0.5 million.
The divestment is not subject 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 less than the requisite 5% of FCT’s latest audited NTA and NAV under Rule 906( 1) of the advertisement manual and paragraph 5.2 (b) of the property funds appendix.
That stated, the divestment is deemed 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 executive, owns a 37.94% claim in FCT. FCT’s supervisor is in addition a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is regarded as a “controlling shareholder” of the supervisor.
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 earnings of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing handbook.
The properties, located beside Northpoint City, are held under branch strata certificates of title. The lots have a leasehold term of 99 years commencing from April 1, 1990. They were acquired in 2016 and have a complete gross flooring area of 966 sqm and overall net lettable area (NLA) of 961 sqm.
According to Frasers Property, the deal was made to “optimize capital performance with active account management initiatives”. “The recommended purchase will potentially permit the group to produce additional worth from the longer-term redevelopment capacity of the asset,” it includes.
Upon the finalization of the most up to date suggested transaction, Frasers Property will assume full ownership of Yishun 10 and operations at Yishun 10 will proceed customarily.
Frasers Property already owns the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm acquired it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
Frasers Property, via 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.
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 appraisal of $34 million and Savills’ evaluation of $35 million.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (additionally known as Yishun 10) to Frasers Property Limited for $34.5 million.
