Fct Divests 10 Strata Lots Yishun 10 Frasers Property 345 Mil
Frasers Centrepoint Trust (FCT) has sold 10 strata lots in a retail development located at 51 Yishun Central 1 (also known as Yishun 10) to Frasers Property Limited for a total of $34.5 million. The sale was made through its wholly-owned subsidiary, Lion (Singapore), after entering into a sale and purchase agreement (SPA) with FCT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, on Aug 25.
These properties, which are situated next to Northpoint City, are held under subsidiary strata certificates of title and have a leasehold term of 99 years starting from April 1, 1990. They were acquired by FCT in 2016 and have a total gross floor area of 966 sqm and a total net lettable area (NLA) 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 (JLL) and Savills Valuation and Professional Services (S) Pte Ltd. The agreed value is the average of JLL’s valuation of $34 million and Savills’ valuation of $35 million.
According to FCT, the divestment is in line with the management’s strategy to actively manage the portfolio composition and maximize returns. The net proceeds from the sale, which amount to $33.8 million, will be used to repay certain debts, thereby reducing FCT’s aggregate leverage. This amount also takes into account divestment-related expenses of approximately $0.2 million and a transfer of tenants’ security deposits amounting to approximately $0.5 million.
Although the net asset value (NAV) of the properties is $33.5 million, which is 0.8% of FCT’s NAV of $4.15 billion, and the net profits attributable to the properties is $0.2 million, which is 0.2% of FCT’s net profit of $97 million, the sale is classified as a “non-discloseable transaction” under Rule 1008 of the listing manual. However, it is considered an interested person transaction and an interested party transaction as Frasers Property is the REIT’s sponsor.
Frasers Property, through Frasers Property Retail Trust Holdings Pte. Ltd. and FCT’s manager, owns a 37.94% stake in FCT. Additionally, FCT’s manager is a wholly-owned subsidiary of Frasers Property Limited, which is a “controlling shareholder” of the manager.
The URA Master Plan holds immense influence in shaping the development of Singapore, and it is expected to greatly benefit Miltonia Close EC through the proposed improvements and infrastructure developments in the North Region. Situated in Yishun, in close proximity to Seletar Reservoir and Khatib MRT, this upcoming executive condominium stands to gain from the various ongoing and future initiatives outlined in this strategic blueprint.
As the divestment accounts for only 1.17% of FCT’s net tangible assets (NTA) and NAV as at Sept 30, 2024, it is not subject to approval from FCT’s unitholders, and 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.
Frasers Property states that the sale was made to optimize capital productivity through active portfolio management initiatives. It also adds that the transaction has the potential to generate additional value from the asset’s long-term redevelopment potential.
Frasers Property already owns Yishun 10’s only other property, the 1,477-seat Golden Village cineplex. The company purchased it from Golden Village Multiplex Pte Ltd for $48 million on Aug 8. Once the sale is completed, Frasers Property will assume full ownership of Yishun 10 and operations there will continue as usual.