Frasers Centrepoint Trust to acquire remaining 63% of Asia Retail Fund for $1.06 bil

By Valerie Kor / EdgeProp Singapore | September 4, 2020 1:45 PM SGT
Century Square Frasers Centrepoint Trust - EDGEPROP SINGAPORE
Century Square is one of the five retail malls under Asia Retail Fund (Photo: Frasers Property)
SINGAPORE (EDGEPROP) - The manager of Frasers Centrepoint Trust (FCT) is planning to acquire the remaining 63.1% stake in PGIM’s Asia Retail Fund (ARF), currently held by Frasers Property (FPL) for $1.06 billion. FCT’s manager is also proposing to divest Bedok Point for a consideration of $108 million.
Upon the completion of the transactions, FCT’s retail properties in its portfolio will increase from seven to 11 malls, making it the one of the largest suburban retail mall owners in Singapore. The total net lettable area will be expanded by about 64% to 2.3 million sq ft. The catchment population will increase from 2 million to about 3 million, and is projected to grow to 3.15 million in five years’ time.
ARF’s Singapore portfolio includes five retail malls: Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1 and one office property Central Plaza. More than half of the retail operators in ARF are essential services, according to Richard Ng, CEO of Frasers Centrepoint Asset Management. Together with the original seven malls, FCT will establish a strong presence in the north-eastern and eastern regions of Singapore, he adds.
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To fund the purchase, the manager has announced a $1.39-billion placement and preferential equity fund raising. The acquisition fee payable to the manager for the proposed ARF acquisition is $19.3 million. After the proposed equity fund raising, FCT will be one of the top 10 S-REITs in Singapore by market capitalisation.
Ng says that the two portfolios are complementary, with key shopping malls in both portfolios situated next to key transportation nodes such as MRT stations and bus interchanges.
He adds, “Suburban malls are resilient and will remain an attractive asset class. Aside from essential services, malls also serve as a social hub, since public services are also included.” As an example, he cites Northpoint City which houses Yishun Public Library and Nee Soon Central Community club.
FCT will continue to pursue omni-channel retail opportunities, such as integrating the two loyalty programs from ARF and FCT, which have a combined loyalty base of 8,000 shoppers in Singapore.
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For both portfolios, mall shopper traffic as at July have recovered to between 60% and 70% of last year’s level. Sales in July have recovered to between 97% and 99% of 2019’s.
For price trends, recent transactions, other project info, check out these projects' research page: Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square, Central Plaza, Northpoint City
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