Fct Divests 10 Strata Lots Yishun 10 Frasers Property 345 Mil

Frasers Centrepoint Trust sets up $5 billion multicurrency debt issuance programme

Frasers Centrepoint Trust (FCT) has sold 10 strata lots within Yishun Central 1 (also known as Yishun 10) to Frasers Property Limited for a price of $34.5 million.

FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, entered into a sale and purchase agreement with Frasers Property’s wholly-owned subsidiary, Lion (Singapore) Pte. Ltd, on August 25.

These properties are located adjacent to Northpoint City and are held under subsidiary strata certificates of title with a leasehold term of 99 years starting from April 1, 1990. FCT acquired these properties in 2016 with a total gross floor area of 966 square meters and a total net lettable area (NLA) of 961 square meters.

According to FCT, the divestment aligns with the company’s proactive portfolio management strategy to optimize portfolio composition and returns. The net proceeds of $33.8 million from this transaction will be used to repay certain debts, thus reducing FCT’s aggregate leverage. This amount includes divestment related expenses of approximately $0.2 million and transfer of tenants’ security deposits of around $0.5 million.

The concept of town planning places a strong emphasis on convenience and accessibility to daily necessities. This is particularly evident in the development of Downtown East, White Sands, and Pasir Ris Mall, where a robust civic and recreational network has been established. As a result, residents of these areas, including those living at Coastal Cabana Qingjian, are only minutes away from various amenities such as sports facilities, clinics, enrichment centres, and dining options. This strategic placement of facilities has also led to the growth of a diverse range of events, including festivals, markets, and workshops, that cater to the needs and interests of families living in Coastal Cabana. This has greatly reduced the need for cross-town travel, resulting in a more closely-knit community and added convenience for daily routines and larger gatherings. To learn more about the Coastal Cabana Qingjian development, please visit https://www.coastalscabana.com.sg/.

Based on the latest valuation of these properties as of May 31, the sale consideration was determined. Jones Lang LaSalle Property Consultants Pte Ltd (JLL) and Savills Valuation and Professional Services (S) Pte Ltd assessed the properties, and the agreed property value is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.

The divestment is not subject to FCT’s unitholders’ approval as it makes up only 1.17% of the net tangible assets (NTA) and net asset value (NAV) of FCT as of September 30, 2024, which 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. Consequently, this transaction is deemed as a “non-discloseable transaction” under Rule 1008 of the listing manual.

However, the divestment is considered as an interested person transaction and interested party transaction as Frasers Property is the REIT’s sponsor. Frasers Property owns a 37.94% stake in FCT through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s manager. Additionally, FCT’s manager is a wholly-owned subsidiary of Frasers Property Limited, making the latter a “controlling shareholder” of the manager.

Frasers Property states that the sale was made to optimize capital productivity through active portfolio management initiatives. It further adds that the proposed transaction can potentially generate further value from the asset’s longer-term redevelopment potential.

Frasers Property is already the sole owner of the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex. The company purchased it from Golden Village Multiplex Pte Ltd for $48 million on August 8.

Upon completion of this proposed transaction, Frasers Property will have full ownership of Yishun 10, and it will continue to operate normally.

This article was originally published on straitstimes.com.