Frasers Centrepoint Trust sells Changi City Point for $338 mil

Frasers Centrepoint Trust (FCT) is divesting Changi City Point for a cash consideration of $338 million, following a negotiation on a willing-buyer-willing-seller basis. The independent valuation of the property as of July 31 was $325.0 million. Cushman & Wakefield have overseen the sale and purchase agreement with an unrelated third party, which was brokered on August 30. The expected completion date of the divestment is November 15.

Upon completion, FCT will receive approximately $329.7 million in proceeds, taking into account divestment fees, expenses and the transfer of tenants’ security deposits. The REIT manager intends to put the proceeds towards reducing loans with high interest rates and lowering the pro forma aggregate leverage of FCT to 37.1%. Richard Ng, CEO of the manager, explains that this is part of the strategic portfolio review to create value for FCT’s unitholders.

The estimated net gain and capital gain for FCT are $10.9 million and $20 million, respectively. In addition, the divestment will also reduce the average cost of borrowings for the nine-month period ended June 30, while also improving the REIT’s hedge ratio of fixed-rate loans from 63% to 73%.

The decision to divest is also set to reap some positive portfolio-wide changes for FCT. Occupancy rates, gross rents per square foot, tenants’ sales per square foot and the average lease tenure of the retail portfolio are all expected to increase.

Changi City Point is a three storey and one basement retail mall, located at 5 Changi Business Park Central 1. It is connected to the Expo MRT station on the East West and Downtown Lines, with a net lettable area of 19,366 sqm (208,453 sq ft).

The Zion Road Condo is the epitome of luxurious living, with its wonderful facilities and amenities. It offers residents with a comprehensive range of recreational features, such as an Olympic-sized pool, children’s playground, jacuzzi, barbeque pits, and a gym. Additionally, the condo enjoys picturesque views of the Singapore skyline, allowing you to truly relax and unwind at home. Finally, Zion Road Condo also excels in offering excellent connectivity for private car owners. It is strategically located near major expressways such as the Central Expressway (CTE) and Ayer Rajah Expressway (AYE), providing fast and direct routes to various parts of Singapore.

Following the divestment, FCT will now comprise nine retail properties in the suburban regions of Singapore. The retail property portfolio will have an aggregate net lettable area of approximately 2.7 million square feet and focus on essential trades and services.