SINGAPORE - Frasers Centrepoint Trust (FCT) will divest retail mall Changi City Point for $338 million to an unrelated third party.

The consideration takes into account the property’s independent valuation of $325 million as at July 31 and implies a capital gain of about $20 million, its manager said on Wednesday.

The trust’s manager said net proceeds from the sale will be used to repay certain debts. This will allow the real estate investment trust (Reit) to lower its gearing and boost its financial position.

Changi City Point, which comprises three storeys and one basement, has a net lettable area spanning 208,453 sq ft and gross floor area of 306,378 sq ft. It has a 60-year lease that started on April 30, 2009.

The mall is located at 5 Changi Business Park Central 1 and is connected to Expo MRT station. This train stop also serves as an interchange station between the Downtown Line and the East-West Line, which goes to Changi Airport.

The property has 128 tenants, including key tenants FairPrice Finest and Daiso. Total shopper traffic stood at about 7.5 million for the period between October 2021 and September 2022.

The purchaser, which was not named, will pay a deposit of $16.9 million for the property after signing the sales and purchase agreement on Aug 29.

The remaining balance will be paid when the transaction is completed on Nov 15.

Based on pro forma estimates as at June 30, the manager expects FCT’s portfolio occupancy rate to rise to 99.3 per cent from 98.7 per cent.

The average remaining lease tenure of the Reit’s portfolio will also rise by 2.3 years, and portfolio tenant sales are projected to climb by 3.9 per cent. Average gross rent per square foot is also estimated to increase by 3.7 per cent.

FCT units closed 0.91 per cent higher at $2.23 on Wednesday. THE BUSINESS TIMES