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 (also referred to as Yishun 10) to Frasers Property Limited for $34.5 million.
Upon the finalization of the most recent recommended transaction, Frasers Property will conclude full possession of Yishun 10 and business at Yishun 10 will proceed customarily.
Given that the net asset value (NAV) of the estates 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 earnings of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing manual.
The sale consideration factored in the current valuations of the properties 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 concurred property worth is the standard of JLL’s evaluation of $34 million and Savills’ assessment of $35 million.
According to FCT, the divestment is in line with the manager’s proactive portfolio management method to optimize profile structure and its returns. The supervisor states it intends to use the net earnings of $33.8 million to settle “specific debt”, that will certainly decrease FCT’s aggregate leverage. The net total accounts for other divestment associated expenses of around $0.2 million and transfer of lessees’ down payment of around $0.5 million.
Frasers Property already owns the just various other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The business obtained it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
Frasers Property, through its wholly-owned subsidiary, Lion (Singapore), participated in a sale and purchase agreement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
The properties, located next to Northpoint City, are held under subsidiary strata certifications of title. The lots have a leasehold term of 99 years starting from April 1, 1990. They were obtained in 2016 and have an overall gross flooring area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
That claimed, the divestiture is deemed to be an interested person transaction and interested party transaction given that Frasers Property is the REIT’s sponsor. Frasers Property, with Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s manager, has a 37.94% claim in FCT. FCT’s manager is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered a “managing shareholder” of the supervisor.
According to Frasers Property, the proceeding was made to “optimize capital efficiency through active profile management initiatives”. “The proposed deal will possibly permit the group to produce additional value from the longer-term redevelopment possibility of the asset,” it includes.
The divestment is not subject to FCT’s unitholders’ confirmation as it composes 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 newest audited NTA and NAV under Rule 906( 1) of the advertisement manual and paragraph 5.2 (b) of the property funds appendix.
