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Frasers Logistics, Frasers Commercial Trust make plans to merge: sources

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Frasers Logistics & Industrial Trust and Frasers Commercial Trust are planning to merge, according to people familiar with the matter, as consolidation among Singapore's real estate investment trusts gathers pace.

Singapore

FRASERS Logistics & Industrial Trust and Frasers Commercial Trust are planning to merge, according to people familiar with the matter, as consolidation among Singapore's real estate investment trusts gathers pace.

A combined company would manage almost 100 properties worth US$4 billion across Singapore, Australia and Europe, including warehouses, offices and business parks, according to their websites. An announcement on the deal could come within days, one of the people said, declining to be named as the information is still private.

"A Frasers merger is elegant and houses the commercial and industrial assets under one entity, consolidates management expertise and creates synergies," said Oh Jin Rui, a Singapore-based director at United First Partners, an investment and advisory group that specialises in special situations. "The increased size would also allow it to raise equity and debt financing for future acquisitions overseas."

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Frasers Property Ltd, backed by Thailand's TCC Assets, is the main sponsor for both Reits. TCC Assets is part of TCC Group, one of Thailand's biggest conglomerates, which was founded by the country's richest man Charoen Sirivadhanabhakdi.

Spokespeople for Frasers Logistics and Frasers Commercial declined to comment. Shares of both companies were halted from trading on Singapore's stock exchange on Thursday, pending an announcement.

A deal would be at the least the fourth among Singapore-listed Reits this year. CapitaLand Ltd kicked things off in January, striking a S$6 billion deal with Temasek Holdings for Ascendas and Singbridge.

In April, OUE Commercial Reit agreed to buy OUE Hospitality Trust to create one of Singapore's 10 biggest Reits. Then in July, Ascott Residence Trust and Ascendas Hospitality Trust agreed to create the largest hospitality trust in the Asia-Pacific region, with S$7.6 billion of assets comprising serviced residences and hotels.

Shares of Frasers Logistics, which has a market capitalisation of S$2.8 billion, have risen more than 20 per cent this year. Frasers Commercial shares are up almost 22 per cent, giving the company a market value of S$1.5 billion. BLOOMBERG