Frasers Commercial Trust's Farnborough Business Park property. (Photo: Google Maps)Frasers Commercial Trust's Farnborough Business Park property. (Photo: Google Maps)

The managers of Frasers Logistics & Industrial Trust (FLT) and Frasers Commercial Trust (FCOT) is planning to merge the two REITs into a SGD5.7 billion entity.

The resulting REIT will have a diversified portfolio of office, industrial, and commercial properties across the Asia-Pacific and Europe.

Under the proposed merger, FLT will acquire all issued FCOT units for SGD1.68 each.

FCOT unitholders will receive SGD0.151 in cash, and 1.233 consideration unit for each FCOT unit at an issue price of SGD1.24 each.

As an illustration, an FCOT unitholder will receive SGD151 in cash and 1,233 consideration units for every 1,000 FCOT units held as at the books closure date.

This consideration is a premium of 0.6% to FCOT’s last traded price on 27 November, and a 3.5% premium to its one-month volume weighted average price.

The total consideration for the proposed merger is approximately SGD1,537 million comprising SGD138.1 million in cash and 1,128.1 million consideration units.

The combined REIT is expected to be among the top-10 largest Singapore REITs by market capitalisation.

In addition to the proposed merger, the resulting REIT is also acquiring a 50% stake in Farnborough Business Park from a wholly owned subsidiary of Frasers Property for GBP90.1 million (SGD157.7 million).

FCOT holds the remaining stake in the property, and as such, the resulting REIT will wholly own the property once the merger and acquisition is complete.

Farnborough Business Park has a net lettable area of approximately 50,882 square metres, and is 99.1% occupied with a WALE of 6.8 years as at 30 September 2019.

Approval for the transactions will be sought from FCOT and FLT unitholders at extraordinary general meetings (EGMs) that will be held around February or March 2020.

Books closure date will also be announced in due course, and FCOT is expected to delist by April 2020.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.