SG’s Frasers Centrepoint Trust acquires stake in Waterway Point mall for $323m

View of Waterway Point with private condominium Watertown above the mall.

Singapore-listed Frasers Centrepoint Trust (FCT), the real estate investment trust (Reit) of Frasers Property Limited, is acquiring one-third interest in suburban mall Waterway Point for S$433.3 million ($323 million), according to its filing with the Singapore Exchange.

FCT said it will acquire the stake in the Punggol-based mall from FCL Emerald Pte Ltd, a wholly owned subsidiary of its sponsor, Frasers Property Limited, based on an agreed value of the property at S$3,502 ($2,550) per square foot of net lettable area.

The acquisition of the stake in Waterway Point will be done via a sale and purchase agreement with FCL Emerald, which currently holds one-third of the total issued units of Sapphire Star Trust (SST), an equal three-way joint venture between the vendor, Far East Civil Engineering and Sekisui House to develop the property.

To partly finance the acquisition, FCT said it is launching an equity fundraising to raise approximately $421.7 million ($307 million) by offering 136 million new shares in a private placement and 48 million new units in preferential offering. About S$245.3 million ($179 million) of the total proceeds will be used to partly finance the deal.

Waterway Point is a four-storey suburban family and lifestyle shopping mall located in the heart of Singapore’s first waterfront eco-town, Punggol. The mall has a net lettable area of 371,200 square feet and committed occupancy of 98.1 per cent as of March 31. It posted net property income of S$61.1 million in 2018.

“Waterway Point is an excellent fit with our existing portfolio of suburban retail malls and the proposed acquisition is in line with FCT’s investment strategy,” according to Chew Tuan Chiong, CEO of Fraser Centerpoint Asset Management, the manager of FCT.

The proposed acquisition is subject to approval by unitholders at an extraordinary general meeting to be convened by FCT at a later date.

Listed on the Main Board of the Singapore Exchange Securities Trading Limited, FCT is a developer-sponsored REIT, with a portfolio of suburban retail properties in Singapore, including Causeway Point, Northpoint City North Wing, Anchorpoint, YewTee Point, Bedok Point, and Changi City Point.

The combined appraised value of FCT’s property portfolio is $2.75billion as of 31 March 2019.

In March, Frasers Property LImited and Frasers Centrepoint Trust announced their intention to raise their stakes in PGIM Real Estate Asia Retail Fund, the latest fund of Singapore’s largest non-listed retail mall fund PGIM Real Estate.

According to a stock exchange filing, Frasers Property is acquiring a 29.99 per cent stake in PGIM Real Estate Asia Retail Fund for around S$601.5 million ($446 million) while its wholly owned subsidiary Frasers Property Investments (Bermuda) is raising its stake to around 42.82 per cent by acquiring 158,145 shares.

FCT is also increasing its stake in the fund from about 17.13 per cent to 18.8 per cent through its wholly own subsidiary FCT Holdings (Sigma).

The stake acquisition adds to the number of deals that Frasers Property Limited has carried since last year. In July, the company announced that it will buy a 75 per cent stake in Ho Chi Minh City-based Phu An Dien Real Estate Joint Stock Company (PAD) for VND799 billion ($34.3 million).