FCT preferential offering oversubscribed; EGM for Waterway Point acquisition set for June 28

Waterway Point is a four-storey mall in Punggol with a net lettable area of 371,200 square feet and a committed occupancy of 98.1 per cent as at March 31.
Waterway Point is a four-storey mall in Punggol with a net lettable area of 371,200 square feet and a committed occupancy of 98.1 per cent as at March 31.PHOTO: FRASERS PROPERTY

SINGAPORE - Frasers Centrepoint Trust's (FCT) $67.7 million preferential offering has been subscribed by almost two times, the manager of the Singapore-based retail real estate investment trust (Reit) said on Wednesday (June 12) night.

Valid acceptances and excess applications were received for 196.9 per cent of the total number of new units available under the preferential offering, as at the close of the offering on June 10.

FCT will raise gross proceeds of about $67.7 million from this offering, which is part of a larger equity funding exercise to finance the acquisition of suburban mall Waterway Point as well as to pare down the bridging loans used for the acquisition of the 18.8 per cent stake in PGIM Real Estate Retail Fund.

Together with the $369.6 million raised from the private placement, total gross proceeds of $437.4 million have been raised from the equity fundraising, the Reit's manager said on Wednesday.

The 28.8 million new units from the preferential offering, priced at $2.35 apiece, are expected to be listed and quoted on the Singapore Exchange's mainboard on June 18 at 9am.

FCT also announced on Thursday that it will hold its extraordinary general meeting (EGM) on June 28 at 10am, to seek unitholders' approval for the proposed acquisition of a one-third interest in Waterway Point.

FCT will spend around $440.6 million on the acquisition. Of this, some $245.3 million will come from the gross proceeds of the equity fundraising, the Reit said in its circular to unitholders on Thursday morning.

Waterway Point is a four-storey mall in Punggol with a net lettable area (NLA) of 371,200 square feet and a committed occupancy of 98.1 per cent as at March 31. Its weighted average lease expiry is 1.8 years by gross rental income and 1.89 years by NLA, as at March 31.

Its total agreed property value is S$1.3 billion, or $3,502 per square foot of NLA. The value of one third of the property is thus $433.3 million.

The net property income yield based on the agreed property value is estimated at around 4.7 per cent.

The appointed independent financial adviser (IFA), Deloitte & Touche Corporate Finance, said the proposed acquisition is based on normal commercial terms and is not prejudicial to the interests of FCT and its minority unitholders. The independent directors and audit committee have also recommended that unitholders vote in favour of the acquisition at the EGM.

The acquisition is expected to increase FCT's distribution per unit from 12.015 cents to 12.091 cents.

FCT's portfolio comprises six suburban malls in Singapore: Causeway Point, Northpoint City North Wing, Changi City Point, Bedok Point, YewTee Point and Anchorpoint, with a total appraised value of $2.75 billion as at Sept 30, 2018.

Units of FCT closed up one cent at S$2.53 on Wednesday.