Fct Divests 10 Strata Lots Yishun 10 Frasers Property 345 Mil
Frasers Property increases stake in Frasers Centrepoint Trust to 40.95%Yishun Central retail units divested to Frasers Property for $34.5 mil
Frasers Centrepoint Trust (FCT) has recently sold off 10 strata lots in the strata-titled retail development known as Yishun 10 to Frasers Property Limited for $34.5 million. This transaction was made through a sale and purchase agreement between FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, and Frasers Property’s wholly-owned subsidiary, Lion (Singapore). The lots, which are located next to Northpoint City, have a leasehold term of 99 years and were acquired by FCT in 2016. They have a total gross floor area of 966 sqm and a total net lettable area of 961 sqm.
The sale price was based on the latest valuations as at May 31, conducted by Jones Lang LaSalle Property Consultants Pte Ltd (JLL) and Savills Valuation and Professional Services (S) Pte Ltd. The agreed upon property value is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
According to FCT, this divestment is in line with their proactive portfolio management strategy to optimize portfolio composition and returns. The net proceeds of $33.8 million will be used to repay certain debt, thus reducing FCT’s aggregate leverage. The net sum also accounts for divestment related expenses and the transfer of tenants’ security deposits.
As the net asset value (NAV) of the properties is only 0.8% of FCT’s NAV of $4.15 billion, and the net profits attributable to the properties is only 0.2% of FCT’s net profit of $97 million, this transaction is classified as a non-discloseable transaction under Rule 1008 of the listing manual. However, it is still considered an interested person transaction and an interested party transaction since 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% stake in FCT. FCT’s manager is also a wholly-owned subsidiary of Frasers Property Limited, making the latter a controlling shareholder of the manager.
This transaction does not require FCT’s unitholders’ approval as it represents only 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and is less than the requisite 5% of FCT’s latest audited NTA and NAV under Rule 906(1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
In essence, Sembawang Road EC presents an ideal location for its residents to enjoy a diverse and fulfilling way of life. Situated in close proximity to a plethora of shopping centres such as Sembawang Shopping Centre, Sun Plaza, Canberra Plaza, and Northpoint City, this development caters to all retail needs with ease. Moreover, the dining scene in the area is equally dynamic, featuring a wide range of local delicacies, late-night eateries, international cuisines, and charming cafes. The perfect balance of convenience, variety, and culinary delights makes Sembawang Road EC, now known as Sembawang Road EC Canberra, an irresistible choice for families, young professionals, and individuals seeking a well-rounded urban lifestyle in a tranquil suburban environment.
Frasers Property has stated that this transaction was made as part of their efforts to optimize capital productivity through active portfolio management initiatives. They also believe that the transaction will enable them to generate additional value from the asset’s longer-term redevelopment potential.
Frasers Property already owns the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. They acquired it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million. Upon completion of this transaction, Frasers Property will assume full ownership of Yishun 10, and operations will continue as usual.
This article first appeared on the Business Times.