Frasers Centrepoint Trust (FCT) will be divesting Changi City Point for S$338 million to an unnamed third party.
The trust will then use the proceeds from the sale to repay some debts and boost its financial standing.
On Tuesday (29 Aug), the buyer paid a deposit of S$16.9 million after signing the necessary agreements and will pay the remaining sum on the transaction completion date, which is 15 Nov.
According to a press release on Wednesday (30 Aug), FCT has sold Changi City Point, a shopping mall in the heart of Changi Business Park, to an unrelated third party.
The divestment will earn the Trust S$338 million. This sum takes into consideration an independent valuation of S$325 million as at 31 July.
It also indicates that the Trust will be getting a capital gain of roughly S$20 million.
FCT also revealed in its press release that it will be using the net proceeds from the sale to repay loans with higher interest rates.
This move will supposedly boost the Trust’s financial standing. Frasers Centrepoint Asset Management CEO Richard Ng wrote, “This Divestment is part of our strategic portfolio review to strengthen FCT’s portfolio resilience and is in line with our long-term objective to create value for FCT’s unitholders.”
Following the divestment, FCT expects occupancy rates across its portfolio to increase, from 98.7% to 99.3%, reported The Straits Times (ST).
Similarly, the portfolio’s average remaining lease tenure will increase by 2.3 years.
Source: Google Maps
Tenant sales and average gross rent per square foot are also expected to rise by 3.9% and 3.7% respectively.
“These put FCT in a stronger position to focus on our core suburban retail strategy going forward,” Mr Ng added.
On Tuesday (29 Aug), the buyer paid a deposit of S$16.9 million after signing the sales and purchase agreements.
The unnamed purchaser will then pay the remaining sum on 15 Nov, which will be when the transaction is completed, noted ST.
FCT’s official website states that Changi City Point has a net lettable area of 19,366 square metres or 208,453 square feet.
That area is spread across the mall’s three storeys and one basement level. It has a 60-year lease, which started on 30 Apr 2009.
From Oct 2021 to Sep 2022, 7.5 million shoppers reportedly went through the doors of Changi City Point.
Key tenants include electronics retailer Challenger, apparel brands Uniqlo and Nike Unite, supermarket Fairprice Finest, as well as Japanese lifestyle brand Daiso.
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Featured image adapted from Changi City Point on Facebook.
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