FCT divests 10 strata lots at Yishun 10 to Frasers Property for $34.5 mil
The properties, located next to Northpoint City, are operated under branch 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 a complete gross floor area of 966 sqm and complete net lettable area (NLA) of 961 sqm.
According to FCT, the divestment remains in line with the supervisor’s proactive portfolio management approach to optimise profile structure and its returns. The supervisor states it plans to use the net earnings of $33.8 million to settle “certain financial obligation”, which will certainly reduce FCT’s aggregate leverage. The net sum accounts for other divestment related costs of roughly $0.2 million and transfer of lessees’ security deposits of around $0.5 million.
Frasers Property already owns the only various other property at Yishun 10, that is the 1,477-seat Golden Village cineplex in Yishun. The company acquired it from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
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Frasers Property, via its wholly-owned subsidiary, Lion (Singapore), entered into a sale and purchase agreement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
Frasers Centrepoint Trust (FCT) has unloaded 10 strata lots in a strata-titled retail property development at 51 Yishun Central 1 (also called Yishun 10) to Frasers Property Limited for $34.5 million.
The divestment is not subject to FCT’s unitholders’ confirmation as it makes up 1.17% of the net tangible assets (NTA) and NAV of FCT as at Sept 30, 2024, and short of the requisite 5% of FCT’s newest audited NTA and NAV under Rule 906( 1) of the listing manual and paragraph 5.2 (b) of the property funds appendix.
According to Frasers Property, the proceeding was made to “optimize capital productivity with active profile management initiatives”. “The proposed purchase will potentially enable the group to create additional worth from the longer-term redevelopment capacity of the asset,” it adds.
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 guidebook.
Upon the completion of the most up to date recommended transaction, Frasers Property will conclude full possession of Yishun 10 and operations at Yishun 10 will continue as usual.
The sale consideration factored in the most recent 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 agreed property worth is the average of JLL’s valuation of $34 million and Savills’ evaluation of $35 million.
That claimed, the divestiture 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, possesses a 37.94% interest in FCT. FCT’s executive is even a wholly-owned subsidiary of Frasers Property Limited, in which the latter is considered a “managing shareholder” of the manager.
