Frasers Logistics & Commercial Trust to divest Cross Street Exchange for S$811M

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Frasers Logistics & Commercial Trust (FLCT) has entered a deal to sell the Cross Street Exchange property in Singapore to unrelated third party SCC Straits for S$810.8 million, the REIT said in a filing to SGX early Tuesday.

The consideration is a 28.3 percent premium to the property’s book value of S$632 million as of end-September 2021, the filing said.

The property, located at the junction of Cross Street and South Bridge Road, is a 15-storey commercial office with retail podium, and two clusters of heritage shophouses housing offices, shops and restaurants, and four retail units on South Bridge Road, the filing said.

Cross Street Exchange accounted for around 7 percent of FLCT’s net property income as of end-September, and around 8.6 percent of its portfolio value, the filing said.

FLCT said the divestment was aimed at shifting the portfolio asset mix.

“The proposed divestment of this non-core leasehold Central Business District (CBD) commercial property is in line with the REIT manager’s proactive asset management and portfolio rebalancing strategies, providing opportunities to re-weight FLCT’s portfolio into the logistics and industrial asset class,” FLCT said.

The REIT said post-divestment, the portfolio weighting of logistics and industrial will rise to 66.9 percent from 61.1 percent previously.

The estimated net proceeds of the deal are around S$802.7 million, which may be used to fund potential acquisition opportunities, finance capital expenditure, repay existing debt, make distributions to unitholders and/or other general corporate requirements, FLCT said.

The deal is expected to be completed on 31 March, the filing said.