FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
Frasers Property currently possesses the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex in Yishun. The firm obtained it from Golden Town Multiplex Pte Ltd on Aug 8 for $48 million.
According to FCT, the divestment is in line with the supervisor’s proactive portfolio management method to optimize profile composition and its yields. The manager states it means to utilize the net earnings of $33.8 million to repay “certain financial obligation”, that will reduce FCT’s aggregate leverage. The net sum accounts for some other divestment related expenditures of about $0.2 million and transfer of lessees’ security deposits of around $0.5 million.
Frasers Property, via 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, positioned alongside Northpoint City, are operated under subsidiary strata certifications of title. The lots have a leasehold term of 99 years beginning from April 1, 1990. They were acquired in 2016 and have an overall gross flooring area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
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 less than the required 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.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail development at 51 Yishun Central 1 (also called Yishun 10) to Frasers Property Limited for $34.5 million.
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.
The sale consideration factored in the latest valuations of the real estates 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 average of JLL’s valuation of $34 million and Savills’ evaluation of $35 million.
That claimed, the divestiture is considered 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 manager, owns a 37.94% claim in FCT. FCT’s supervisor is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered a “managing shareholder” of the manager.
According to Frasers Property, the deal was made to “optimise capital efficiency via active account management initiatives”. “The suggested purchase will potentially enable the group to produce additional value from the longer-term redevelopment capacity of the asset,” it adds.
Upon the completion of the current proposed deal, Frasers Property will conclude full possession of Yishun 10 and business at Yishun 10 will proceed customarily.
