NEX, an asset of Frasers Centrepoint TrustNEX, an asset of Frasers Centrepoint Trust

Retail REIT Frasers Centrepoint Trust (FCT) is jointly acquiring a 50% stake in suburban retail mall NEX with its sponsor, Frasers Property, for SGD652.5 million.

NEX is the largest retail mall in north-east Singapore, and it features more than 630,000 square feet of net lettable area.

The asset is situated above the Serangoon mass rapid transit (MRT) station and it is 99.9% occupied by tenants such as Cold Storage Supermarket, Isetan, and Shaw Theatres.

Under the acquisition arrangement, FCT and Frasers Property will jointly acquire a 50% interest in Gold Ridge Pte Ltd - the entity that holds NEX, from a Mercatus co-operative subsidiary.

“NEX is a complementary fit to FCT’s existing suburban retail property portfolio”, said Richard Ng, CEO of FCT’s manager, in a statement to mark the acquisition.

“This acquisition will further enhance FCT’s portfolio diversification and strengthen its performance”, he added.

After the acquisition, FCT will indirectly hold a 25.5% interest in Gold Ridge through NEX Partners Trust, while Frasers Property will hold a 24.5% interest via the same entity.

The acquisition consideration translates to an agreed property value of SGD2.078 billion for NEX on a 100% basis.

FCT was last done on the Singapore Exchange at SGD2.20, which presently implies a distribution yield of 5.56% according to data on the Singapore REITs table.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.