This transaction is the next phase of Frasers Property's hospitality strategy following the privatisation of Frasers Hospitality Trust (FHT) in 2025.

FHT’s privatisation provided the Group greater flexibility over ownership and management of the portfolio. Without it, this proposed transaction would not have been possible.

Since privatising FHT, we have focused on integrating the portfolio and enhancing returns. This transaction allows the Group to:

• unlock capital from stabilised assets while continuing to earn recurring management fee income;
• retain exposure to assets with upside potential;
• hold non-core assets for future opportunistic divestment; and
• secure full ownership of Fraser Suites Singapore, enabling the potential redevelopment of the Valley Point site.

The transaction also delivers clear positive effects on the Group's balance sheet and key financial metrics on a pro forma basis.

Frasers Property actively recycles capital from mature assets into opportunities with stronger risk-adjusted returns.

This transaction supports that approach by improving capital efficiency, strengthening the balance sheet, enhancing the Group's asset-light and fee-based earnings platform, and providing greater flexibility to pursue future growth opportunities.

The stabilised assets are mature, lower-yielding assets. Divesting these assets at attractive pricing allows Frasers Property to unlock capital and redeploy it into opportunities with stronger risk-adjusted returns, while continuing to earn recurring management fee income from the assets.

This is consistent with the Group's disciplined approach to capital allocation.

No, hospitality remains one of Frasers Property's core asset classes. 

This transaction is intended to strengthen the hospitality platform by making it more focused and capital-efficient.

Following completion, Frasers Property will continue to manage hospitality assets, earn recurring management fee income and retain exposure to assets with future upside potential. The Group will continue to maintain significant scale in hospitality assets under management.

TCCGI has been a long-term strategic partner in FHT since its IPO and shares a long-term investment perspective on the portfolio. As an existing co-owner of the assets, TCCGI sees value in the assets they are acquiring. In addition, TCCGI, as the majority shareholder of Frasers Property, benefits from the strategic merits that this transaction confers on the Group.

Given that this is an interested-party transaction, strict protocols were put in place to ensure negotiations were conducted on an arm's-length basis.

The Board considered not only pricing, but also execution certainty, timing, platform impact and long-term shareholder outcomes. As part of the process, DBS conducted market checks with credible third parties to assess interest in a transaction on similar terms.

None of the parties approached expressed interest at the pricing levels sought while also allowing Frasers Property to retain its management role and recurring management fee income. The proposal negotiated with TCCGI therefore represented the best available overall outcome for shareholders.

Given that this is an Interested Person Transaction, governance was a key focus throughout the process:

• Directors with conflicts of interest abstained from discussions and negotiations;
• Deloitte was appointed as Independent Financial Adviser (IFA). The IFA will assess whether the transaction is on normal commercial terms and not prejudicial to minority shareholders; and
• TCCGI and its associates will abstain from voting at the Extraordinary General Meeting (EGM).

The outcome will therefore be determined solely by independent shareholders.

During negotiations, parties took into account the Latest Independent Valuations of the properties, their risk-adjusted return and growth characteristics, the mid-to-long term macro and geopolitical outlook, and FPL’s intentions to unlock capital while maintaining asset under management (AUM) and corresponding fee income.

On a portfolio basis, the final negotiated price is approximately 6.7% above the latest independent valuations and 1.6% above the implied take-private valuation, which the Board believes is an attractive outcome for shareholders.

The estimated transaction costs are approximately S$78.4 million, comprising primarily stamp duties of approximately S$53 million, capital gains tax of approximately S$18.8 million, and professional fees and other expenses.

Frasers Property worked closely with its financial, legal and tax advisers to minimise unnecessary costs and ensure the transaction was structured as efficiently as possible.

While transaction costs are an important consideration, they should be assessed in the context of the overall benefits delivered by the transaction.

As an overall package, the transaction strengthens Frasers Property's hospitality platform, unlocks capital from mature assets, maintains recurring hospitality management fee income, enables future value creation opportunities, delivers positive effects on key financial metrics and achieves attractive pricing above independent valuation benchmarks.

The Board therefore considered the transaction as a whole and concluded that the overall benefits to shareholders outweigh the transaction costs incurred.

Shareholders can expect a stronger and more capital-efficient hospitality platform.

The transaction is expected to improve key financial metrics, maintain recurring hospitality management fee income, preserve exposure to future growth opportunities and provide additional flexibility for future value creation initiatives.

Overall, this transaction represents the next phase of Frasers Property's hospitality strategy and supports the Group's objective of creating long-term shareholder value.

Shareholders are encouraged to review the Circular carefully, including the details of the transaction, the Independent Financial Adviser's opinion and the Board's recommendation.

The transaction will be put to a vote at the EGM. As this is an Interested Person Transaction, TCCGI and its associates will abstain from voting, ensuring that the outcome reflects the views of independent shareholders. The transaction requires approval by more than 50% of the votes cast by shareholders who are eligible to vote at the EGM.

This transaction represents the next phase of Frasers Property's hospitality strategy following the privatisation of FHT. It strengthens Frasers Property's hospitality platform through portfolio optimisation, unlocks capital while maintaining recurring hospitality management fee income, enables future value creation opportunities, delivers positive effects on key financial metrics and achieves attractive pricing above independent valuation benchmarks.

We encourage shareholders to participate in the voting process. We look forward to receiving shareholders' support at the EGM.