FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Property already owns the only other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The business acquired it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
The divestment is not subject to FCT’s unitholders’ approval as it comprises 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 most current audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
Frasers Centrepoint Trust (FCT) has divested 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (also known as Yishun 10) to Frasers Property Limited for $34.5 million.
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 agreed property worth is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
Frasers Property, through 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.
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 profits attributable to the properties of $0.2 million is 0.2% of FCT’s net profit of $97 million, the divestment is classified as a “non-discloseable transaction” under Rule 1008 of the listing manual.
According to FCT, the divestment remains in line with the manager’s proactive portfolio management approach to optimize account structure and its yields. The supervisor states it intends to utilize the net earnings of $33.8 million to pay off “particular debt”, that will reduce FCT’s aggregate leverage. The net sum accounts for some other divestment associated expenditures of approximately $0.2 million and transfer of lessees’ security deposits of around $0.5 million.
Upon the completion of the most up to date recommended transaction, Frasers Property will conclude full ownership of Yishun 10 and proceedings at Yishun 10 will proceed customarily.
The properties, situated beside Northpoint City, are hosted under subsidiary strata certificates of title. The lots have a leasehold term of 99 years starting from April 1, 1990. They were acquired in 2016 and have an overall gross floor area of 966 sqm and total net lettable area (NLA) of 961 sqm.
That said, the divestment is regarded to be an interested person transaction and interested party transaction considered that Frasers Property is the REIT’s sponsor. Frasers Property, with Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s supervisor, owns a 37.94% claim in FCT. FCT’s supervisor is also a wholly-owned subsidiary of Frasers Property Limited, wherein the latter is considered as a “controlling shareholder” of the manager.
According to Frasers Property, the proceeding was made to “optimize capital performance via active portfolio management initiatives”. “The suggested transaction will potentially permit the group to create additional value from the longer-term redevelopment possibility of the asset,” it includes.
