Frasers Commercial Trust proposes to develop hotel at China Square and buy Melbourne CBD office building

SINGAPORE - Mainboard-listed Frasers Commercial Trust (FCOT) announced on Monday that it has entered into two conditional agreements: one for a unit of Frasers Centrepoint Ltd to develop a 16-storey hotel at China Square Central, and another to buy an office building in the heart of Melbourne's central business district.

FCOT said the hotel will rejuvenate China Square Central and reposition it as an integrated development. It said a long lease for the hotel will be granted at a cost of $44.8 million. The hotel will be operated by Frasers Hospitality Pte Ltd under the "Capri by Fraser" brand.

The trust has also entered into a conditional agreement with Australand Property Holdings (Collins St No.1) Pty Limited to purchase 357 Collins Street in Melbourne, Australia, for A$222.5 million (S$231.70 million). The deal marks the trusts's maiden entry into the Melbourne CBD office market.

The 25-storey freehold building has Grade A specifications with a total net lettable area of 31,920 sq m, comprising office space of 30,095 sq m and retail space of 1,825 sq m. It has an occupancy rate of 95.5 per ent as at March 31, 2015. The acquisition will be financed with a combination of equity and debt financing.

Both the proposed hotel development and Melbourne office building purchase are subject to approval from the trusts's unitholders at an extraordinary general meeting.