Frasers Property agreed to sell 50 percent of 38-storey Singapore commercial property Frasers Tower to a long-term strategic investor it didn’t name in an all-cash deal, the developer said in a filing to SGX after the market close Wednesday.
The agreed value of the property, which was negotiated between Frasers Property and the unrelated investor, is S$1.97 billion and took into account independent valuations, the filing said.
Frasers Property said the proposed deal was expected to raise around S$442.7 million.
“This partnership with the investor is part of the group’s ongoing portfolio balancing efforts,” Frasers Property said in the statement.
“Frasers Tower is a landmark office tower in Singapore’s core CBD and a strategic investment property within group’s portfolio. Together with the investor, the group will continue to own and work on enhancing the value of Frasers Tower,” it added.
Frasers Property will continue to manage the property, allowing it to increase its recurring income stream, the filing said.
On a pro forma basis assuming the deal was completed at the start of fiscal 2018, the transaction is expected to boost earnings per share (EPS) before fair value change and exceptional items to 15.2 Singapore cents from 14.7 Singapore cents previously, the filing said.
The transaction will be via a subscription for new units in Aquamarine Star Trust (AST), which holds Frasers Tower, the filing said.
In a separate filing to SGX Wednesday, Frasers Commercial Trust said it had received notice of the proposed deal under its right of first refusal and had declined the opportunity to participate as a co-investor.
“The manager has considered the opportunity and is of the view that the proposed investment on the proposed terms (including the proposed consideration), would not be accretive to the distribution per unit of FCOT,” the trust’s manager said in the statement.
The remaining 50 percent of Frasers Tower is still subject to a right of first refusal by the trust, Frasers Commercial Trust said.
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