14 Jul 2020
SINGAPORE, 14 JULY 2020
Frasers Property Limited (“Frasers Property”, and together with its subsidiaries, the “Frasers Property Group” or the “Group”) announced that TCC Prosperity Limited (“TCC”), through its wholly-owned subsidiary Bright Bloom Capital Limited (the “Subscriber”), has today subscribed for 50% of the total issued units of North Gem Trust1, the owner of Northpoint City (South Wing) (the “Transaction”). The Transaction values Northpoint City (South Wing) at S$1.1 billion and allows the Group to recognise a gain of S$50 million over the asset’s last audited book value2.
Mr Low Chee Wah, Chief Executive Officer of Frasers Property Retail, commented, “Northpoint City (South Wing) is a strategic component of the Group’s S$8.6 billion3 retail assets under management in Singapore. This Transaction is timely as it maintains the Group’s discipline in optimising capital productivity. Amid challenges brought about by COVID-19, we are pleased to have the support of TCC as our strategic capital partner for this Transaction. We will continue to manage Northpoint City, thereby enhancing the Group’s long-term return by growing our asset and property management fee income. We look forward to working with TCC to lift the asset’s value over time.”
In addition to growing with its REITs, the Group has been stepping up its capital partnership initiatives with third-party investors. The Transaction follows the equity injection by a long-term strategic investor in Frasers Tower in FY19, which resulted in both partners each holding a 50% stake in the property that continues to be managed by Frasers Property.
The Subscriber is a wholly-owned subsidiary of TCC, which is part of the TCC Group. The TCC Group of companies and entities is controlled by Mr. Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi, who are directors and controlling shareholders of Frasers Property.
As part of the agreement, Frasers Property and the Subscriber have pre-emptive rights on each other’s stake in Northpoint City (South Wing).
With the Transaction, the Group is able to strengthen its financial position by reducing its net gearing4.
1. Following the Transaction, Frasers Property (through its wholly-owned subsidiary FCL Amber Pte. Ltd.) holds the other 50% of the total issued units of North Gem Trust.
2. The audited book value of Northpoint City (South Wing) as at 30 September 2019 was S$1.05 billion
3. Comprises retail assets in Singapore in which the Group has an interest, including assets held by Frasers Centrepoint Trust and PGIM Real Estate AsiaRetail Fund’s Singapore assets (excluding Eastpoint Mall)
4. Net debt / Total equity