FCT to acquire Changi City Point

MAINBOARD-LISTED Frasers Centrepoint Trust (FCT) has entered into a conditional sale-and-purchase agreement to acquire City Point mall for a purchase consideration of $305 million.

The announcement came yesterday from Frasers Centrepoint Asset Management (FCAM), the manager of the trust.

The acquisition was negotiated on an arm's-length basis between FCAM, on behalf of the trustee of FCT, and the vendor, Ascendas Frasers.

Ascendas Frasers is a 50-50 joint-venture between FCT's sponsor, Frasers Centrepoint Limited, and Ascendas Development.

The purchase consideration of $305 million is based on two independent valuations by Knight Frank and Colliers International. The open market value of Changi City Point as at March 1 was determined by Knight Frank to be $306 million, and by Colliers to be $304 million.

In a statement, FCT said that it planned to finance the purchase with a combination of equity and debt financing. This will ensure that the acquisition is distribution per unit (DPU)-accretive to FCT unitholders, while maintaining an optimum level of gearing.

Equity financing may be in the form of a private placement of new FCT units, said the statement.

Details of the financing structure will be set out in a circular to be sent out to all unitholders in due course.

The proposed acquisition of Changi City Point - a three-storey retail mall in Changi Business Park, located opposite the Singapore Expo MRT station - will take the total number of suburban retail malls in FCT's portfolio to six.

It will also increase FCT's total assets by about 14 per cent to $2.4 billion, said FCAM chief executive officer Chew Tuan Chiong.

"This acquisition will strengthen FCT's ability to deliver regular and stable distributions to its unitholders, and unitholders can expect this acquisition to be DPU-accretive," he said.

The mall, which began operations in November 2011, has a total net lettable area of just over 207,000 sq ft. It had a 97.8 per cent occupancy rate as at end-February, and a leasehold estate of 60 years from April 30, 2009.

The mall is home to Very Special Arts Singapore, a charity providing opportunities for people with disabilities to access the visual, performing and literary arts for the purpose of rehabilitation and social integration.

Source: Business Times 9th April 2014

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FCT to acquire Changi City Point

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