In February 2019, FCT acquired a 17.13% stake in PGIM ARF for $342.5 million. Last March, FCT acquired a further 1.67% for $33.5 million. Frasers Property (FPL) acquired a 48% stake in PGIM ARF for $971 million last February and March. Then in July and September last year, following the divestment of Liang Court to CapitaLand and City Developments for $400 million, PGIM ARF undertook a capital redemption exercise and FCT’s stake rose to 24.82% while sponsor FPL’s stake in PGIM ARF rose to 63.1%. Together, FPL and FCT own 100% of PGIM ARF.
SINGAPORE (July 3): On July 1, Frasers Centrepoint Trust (FCT) announced it has exercised its rights of pre-emption under the bye-laws of PGIM Real Estate AsiaRetail Fund (ARF) to acquire another 12.07% stake for $197.2 million. The acquisition will be fully funded by debt. The net asset value (NAV) of the ARF shares as at March 31 is $194 million. The acquisition, to be completed this month, will increase FCT’s interest in ARF to 36.89% from 24.82% prior to the acquisition.
The acquisition is accretive on an FY2019 pro forma basis with DPU rising 0.13% to 11.987 cents from 11.972 cents. FCT’s NAV per unit is expected to remain flat at $2.21 after the acquisition. ARF is the largest non-listed retail mall fund in Singapore and holds five suburban malls near MRT stations, namely, Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1; office property Central Plaza; and a retail mall in Malaysia. The pro-forma gearing of FCT as at end FY2019 will increase to 36.2% from 32.9%, its announcement states. As at end 1HFY2020 on March 31, FCT’s gearing stood at 37.4% because of the short-term borrowing of $80 million drawn on March 27 to repay a $90-million note tranche which matured on April 3. After the note repayment, gearing has dropped to 33.3%.
