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Frasers Centrepoint Trust (FCT) has recently announced that it has sold 10 strata lots in a retail development known as Yishun 10 to Frasers Property Limited for $34.5 million. The sale was made through FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, to Frasers Property’s wholly-owned subsidiary, Lion (Singapore).
These strata lots, which are held under subsidiary strata certificates of title, have a leasehold term of 99 years beginning from April 1, 1990. The properties were acquired by FCT in 2016 and have a total gross floor area of 966 sqm and a net lettable area of 961 sqm. The sale price was based on the latest valuations of the properties as at May 31, which were conducted by Jones Lang LaSalle Property Consultants Pte Ltd and Savills Valuation and Professional Services (S) Pte Ltd.
According to FCT, the sale is in line with the company’s proactive portfolio management strategy to improve portfolio composition and returns. With the net proceeds of $33.8 million from the sale, FCT intends to repay certain debts, which will help lower the REIT’s aggregate leverage. The net proceeds take into account divestment expenses and the transfer of tenants’ security deposits.
The sale is considered a “non-disclosable transaction” under Rule 1008 of the listing manual, as the net asset value (NAV) of the properties is only 0.8% of FCT’s NAV of $4.15 billion, and the net profits attributable to the properties is just 0.2% of FCT’s net profit of $97 million. However, as Frasers Property is the REIT’s sponsor and owns a 37.94% stake in FCT through its subsidiary Frasers Property Retail Trust Holdings Pte Ltd and FCT’s manager, the sale is classified as an interested person transaction and an interested party transaction.
The sale does not require approval from FCT’s unitholders, as it makes up only 1.17% of FCT’s net tangible assets and NAV as at Sept 30, 2024, and is less than 5% of FCT’s latest audited NAV, as per the listing manual and property funds appendix.
Frasers Property has stated that the sale was made to optimize capital productivity and active portfolio management. It also notes that the transaction could potentially lead to additional value from the longer-term redevelopment potential of the asset. Frasers Property already owns the only other property at Yishun 10, which is the 1,477-seat Golden Village cineplex, acquired from Golden Village Multiplex Pte Ltd on Aug 8 for $48 million.
Upon completion of the transaction, Frasers Property will have full ownership of Yishun 10, and operations will continue as usual. This article first appeared on .