Showing resilience

INTEREST rates are high, the economic outlook is uncertain, and malls may be subject to further technological disruptions.

Against this backdrop, Frasers Centrepoint Trust inked a deal to divest mall Changi City Point in Singapore for S$338 million to an unrelated third party. The divestment consideration is at a 4 per cent premium to the property’s independent valuation as at end-July.

Based on the divestment consideration, the historical net property income yield is around 4.3 per cent, which may not cover borrowing costs. Perhaps, the Changi City Point transaction shows the appetite of investors for big ticket property transactions here as well as their confidence on leasing demand and capital appreciation over the long term.