Frasers Centrepoint Trust (FCT) has divested YewTee Point for $220 million through a sale and purchase agreement (SPA) with an unrelated third party on March 19.
The agreement was entered into by HSBC Institutional Trust Services, FCT’s trustee.
The consideration was negotiated on a willing-buyer-willing-seller basis.
The property is valued at $200 million as at Jan 31, based on an independent valuation conducted by Savills Valuation and Professional Services.
The estimated net proceeds from the divestment is at $219.9 million after taking into consideration the divestment fee and other divestment related expenses of about $0.1 million.
The divestment is in line with the manager’s portfolio management strategy to optimise FCT’s portfolio composition and the returns objects for FCT and its unitholders.
The net proceeds will be used to repay FCT’s debt, thus lowering its gearing level.
SEE:Frasers Centrepoint Trust says 53.6% of NLA allocated to essential services in 1Q business update
The divestment is expected to be completed by May 28.
Following the completion of the divestment, FCT’s retail portfolio will comprise nine retail properties, Causeway Point, Northpoint City North Wing, Changi City Point, Waterway Point, Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1, which are all located in the suburban regions of Singapore.
FCT’s retail property portfolio has a total net lettable area (NLA) of about 207,800 sqm.
If FCT had completed the sale on Oct 1, 2019, distribution per unit (DPU) for the FY2020 ended Sept 30, 2020, would have been 8.831 cents after the sale with a 2.33% dilution, as opposed to 9.042 cents before the sale.
Units in FCT closed flat at $2.56 on March 19.
