Frasers Property and FCT to raise stakes in PGIM Real Estate Asia Retail Fund

FRASERS Property Limited and Frasers Centrepoint Trust (FCT), the real estate investment trust (Reit) it sponsors, are raising their stakes in PGIM Real Estate Asia Retail Fund, shortly after making their first round of investments respectively.

Frasers Property is acquiring a 29.99 per cent stake in PGIM Real Estate Asia Retail Fund Limited for around S$601.5 million, the group said in a bourse filing on Thursday before the market opened. Its wholly owned subsidiary Frasers Property Investments (Bermuda) Limited will be acquiring 158,145 shares in the open-end fund, raising its stake to around 47.82 per cent.

Frasers Property, through another subsidiary Frasers Property Crystal, had earlier entered into an agreement with a shareholder of PGIM Real Estate Asia Retail Fund to acquire a 17.8 per cent stake, or some 94,013 shares, in the fund for S$356.4 million.

It intends to fund the second acquisition via internal funds or external borrowings or a combination of both, the filing added.

As at Dec 31, 2018, the book value and net asset value of the sale amount to about S$598.1 million, which includes the fourth quarter 2018 dividend.

Frasers Property said the investments in the fund are in line with its strategy to grow recurring income sources in its key assets. These are primarily suburban retail properties in Singapore, which the group says it has significant experience in.

"Suburban retail is an asset class that has demonstrated resilience across property cycles," the group said.

Shares of Frasers Property closed at S$1.76 apiece on Wednesday, up 1.2 per cent, or two Singapore cents.

Meanwhile, Frasers Centrepoint Trust (FCT) is also increasing its stake in the fund from about 17.13 per cent to 18.8 per cent through its wholly own subsidiary FCT Holdings (Sigma), said FCT's trust manager in a separate bourse filing also on Thursday morning.

FCT's subsidiary will take up 8,804 shares which represent a 1.67 per cent stake in the company for around S$33.5 million. The trust manager said it intends to finance the acquisition through a combination of debt and equity financing. This includes the bridge loan facilities referred to in its earlier announcement on Feb 28.

Previously, FCT Holdings (Sigma) entered into 12 agreements with certain shareholders of the fund to purchase 90,346 shares, representing a 17.1312 per cent stake in the fund.

As at Dec 31, 2018, the book value and net asset value of the sale shares amount to about S$33.3 million, which includes the fourth quarter 2018 dividend.

FCT units closed on Wednesday down two Singapore cents at S$2.26.