Frasers Centrepoint Trust (FCT) has announced that it is divesting Changi City Point for a consideration of $338 million in cash. The REIT’s trustee, HSBC Institutional Trust Services (Singapore), had entered into a sale and purchase agreement with an unrelated third party on Aug 30. The consideration was negotiated on a willing-buyer-willing-seller basis after taking into account the property’s independent valuation of $325.0 million as at July 31.
The deal, which is expected to be completed on Nov 15, was brokered by Cushman & Wakefield. Upon completion, FCT is estimated to net approximately $329.7 million in proceeds, after accounting for the divestment fee, divestment-related expenses and the transfer of tenants’ security deposits.
The REIT manager of FCT, Richard Ng commented, “This divestment is part of our strategic portfolio review to strengthen FCT’s portfolio resilience and is in line with our long-term objective to create value for FCT’s unitholders. The estimated net gain and capital gain are approximately $10.9 million and $20 million, respectively.”
The divestment will have a range of other benefits for FCT’s portfolio. Firstly, it is expected to help reduce FCT’s pro forma aggregate leverage from 40.2% to 37.1% and consequently also lower its average cost of borrowings. Secondly, it will also improve the REIT’s hedge ratio of fixed-rate loans from 63% to 73%, each on a pro forma basis. Finally, the divestment will also result in an improved committed occupancy rate, average gross rent per square foot, the REIT’s tenants’ sales per square foot and the average remaining lease tenure of the retail portfolio for FCT.
Located in the city’s eastern area, residents enjoy plenty of amenities, such as a shopping mall, hospital, universities, and public transportation, all within walking distance. Due to its excellent location, Champions Way Condo has become one of the most sought-after condo developments in the city. Its residents can enjoy all the benefits and conveniences of living in the city with the comfort and privacy of their own homes. For those looking for an exclusive lifestyle, Champions Way Condo is the perfect choice.
Changi City Point is a retail mall located at 5 Changi Business Park Central 1. The three storey building, which is connected to the Expo MRT station on the East West and Downtown Lines, has a net lettable area (NLA) of 19,366 sqm (208,453 sq ft).
Upon completion of the divestment, FCT’s retail portfolio will comprise nine retail properties located in the suburban regions of Singapore. With a strong focus on essential trades and services, its retail property portfolio will have an aggregate net lettable area of approximately 2.7 million square feet.
Thus, the divestment of Changi City Point is set to create an array of benefits for FCT’s portfolio and strategic objectives. This will undoubtedly create value for FCT’s unitholders and position the REIT in a stronger position to focus on its core suburban retail strategy going forward.