Frasers Centrepoint exits Compass Point JV, will no longer manage mall

PROPERTY developer Frasers Centrepoint Limited (FCL) is exiting a joint venture that owns the Compass Point shopping mall in Sengkang for about S$80.3 million in total, it said in a Singapore Exchange filing on Wednesday.

It has inked a deal to sell off its 18.99 per cent stake in the JV, called Gemshine Investments, to its JV partner, a fund owned by insurance giant Prudential. Prudential's Asia Property Fund had controlled the other 81.01 per cent of the JV via its vehicle Lexis 88.

The share sale will bring in S$19.6 million, FCL said, adding that the sale was in line with its strategy of selling off non-core assets.

It also said it has also agreed to novate S$60.7 million worth of intercompany loans between its unit, Lexis 88, Gemshine and five special purpose vehicles that collectively own all the strata units in Compass Point. Novation means replacing one party in a contract with another.

FCL said it would "cease to manage" Compass Point after completing its stake sale. It did not say whether a new manager has been found for the suburban mall, which is currently under renovation.

The group said the carrying value of Gemshine was about S$4.8 million as at Sept 30, 2015, adding that it does not expect the sale to have a material effect on its net tangible assets or earnings per share.

The group said it would be paid the aggregate sale consideration in cash when the deal is completed, expected to be in February 2016.

Gemshine had bought Compass Point for S$519 million back in 2012, or about S$1,925 per sq ft. An 18.99 per cent stake of the total purchase sum would work out to around S$98.6 million.