Frasers Centrepoint Trust to sell White Sands mall for S$467 million

[SINGAPORE] Frasers Centrepoint Trust (FCT) is divesting White Sands mall for S$467 million, which represents an 8.4 per cent premium over an independent valuation as at May 31, its manager announced in a Tuesday (Jun 30) night bourse filing.

HSBC Institutional Trust Services (Singapore), as FCT’s trustee, has entered into a put and call option agreement with Growth Capital, an entity linked to Jack Investment.

Jack Investment, headed by prominent Hainanese businessman Han Chee Juan, owns Leisure Park Kallang, a mall near Singapore’s National Stadium. Jack Investment recently acquired the retail space on the first and third levels of Thomson Plaza for S$250 million.

Completion of divestment of White Sands mall in Pasir Ris is expected to take place around Sep 30.

The manager said that it intends to use the estimated net proceeds of about S$454.1 million to repay debt, after accounting for divestment-related expenses of about S$2.8 million.

This will reduce FCT’s aggregate leverage as at Mar 31 from 40 per cent to 36.5 per cent, and strengthen its financial position, it added.

After accounting for the estimated total cost of the divestment, FCT is expected to register an estimated net gain of about S$32.4 million.

When the divestment is completed, FCT’s retail portfolio will comprise eight retail properties in the suburbs of Singapore: Causeway Point, Century Square, Hougang Mall, NEX, Northpoint City, Tampines 1, Tiong Bahru Plaza and Waterway Point.

Richard Ng, CEO of the manager, said: “White Sands, the smallest mall in our portfolio, has performed well since acquisition. The divestment is part of our proactive portfolio management strategy to strengthen FCT’s portfolio resilience and to unlock value for unitholders.

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“The transaction will enhance FCT’s financial position through the lowering of its aggregate leverage, and provide us with headroom to redeploy it into future growth opportunities.”

The property was jointly marketed by Cushman & Wakefield and Savills.

Shaun Poh, executive director of capital markets at Cushman & Wakefield, said: “Investor interest in quality retail assets remains strong, supported by Singapore’s safe-haven status, robust retail operating fundamentals and favourable interest rate environment.

“We expect these factors to continue supporting transaction activity and drive further investment opportunities in the months ahead.”

Jeremy Lake, managing director of investment sales and capital markets, Savills Singapore, said that the sale of White Sands mall “reflects strong demand” for “high-quality suburban retail assets in Singapore”.

He added: “Well-connected malls with established trade areas continue to attract significant investor interest. Investors are drawn to the attractive net yields, strong fundamentals and value-add angles.”

The counter was trading down 0.9 per cent or S$0.02 at S$2.24 as at 9.44 am on Wednesday.