Frasers Centrepoint (FCL) has acquired four business parks in Britain for approximately £686 million (S$1.2 billion), marking its debut in a new market segment.
Its wholly owned subsidiary, Frasers Property International, entered into sale and purchase agreements with the relevant vendors, each of which is a subsidiary of a fund or account managed by Oaktree Capital Management, to acquire the four freehold properties, which have a total built area of 4.9 million sq ft.
Frasers Property has also entered into a conditional agreement to acquire another business park - Maxis, Bracknell - subject to conditions relating to net operating yield and Maxis achieving an occupancy of at least 95 per cent.
The four business parks acquired are in Winnersh Triangle in Reading, Chineham Park in Basingstoke, Watchmoor Park in Camberley, and Hillington Park in Glasgow.
FCL said the acquisition will be fully funded through a mix of debt and its internal resources. It expects the purchase to be completed within 60 days from the date of signing of the sale and purchase agreements, while the completion of the Maxis acquisition will take place no later than 20 working days after June 29 next year.
FCL group chief executive officer Panote Sirivadhanabhakdi said the acquisition was in line with the group's strategy to grow its overseas presence and recurring income sources.
"The group has been in the UK and Europe for over 15 years, and we now extend our presence from the residential, hospitality, industrial and logistics sectors to include the commercial and business park sector," he said.
The group has been in the UK and Europe for over 15 years, and we now extend our presence from the residential, hospitality, industrial and logistics sectors to include the commercial and business park sector.''
FCL GROUP CHIEF EXECUTIVE OFFICER PANOTE SIRIVADHANABHAKDI
"We can also potentially benefit from the "network effect", given that we are already in the industrial, logistics, commercial and business park sectors in Australia, Germany, the Netherlands, Singapore and Thailand."
Post-acquisition, on a pro forma basis, the group will have around $4.2 billion of assets in Britain and Europe. Commercial properties, as a proportion of FCL's $26.8 billion of total assets, will account for about 30 per cent.
"The properties are highly defensive with growth prospects. From a tenancy perspective, the rental income from the properties is underpinned by long-term leases to a diversified base of over 400 tenants," Mr Sirivadhanabhakdi added.
The properties have a weighted average lease to expiry of 5.9 years and tenants include large companies such as BMC Software, Ericsson, Harris Systems, Intel, Level 3 Communications and Novartis.
"In addition, with over 1.4 million sq ft of development built area, there is opportunity to increase built area by almost 30 per cent in the future," he said.