Frasers Centrepoint Trust ups stake in PGIM ARF for $197.2m

The trust’s interest in ARF will be raised to 36.89% from 24.82%.

Frasers Centrepoint Trust’s (FCT) wholly owned subsidiary FCT Holdings (Sigma) is acquiring an additional 12.07% of the capital in PGIM Real Estate AsiaRetail Fund (ARF) for $197.2m, according to an announcement.

The deal is expected to be completed in July. This will increase FCT’s interest in ARF to 36.89% from 24.82%.

The acquisition is accretive to FCT’s distribution per unit (DPU), based on the assumption that it had been in effect at the beginning of FY2019. With the acquisition, FCT's pro forma gearing is 36.2% as at 30 September 2019.

This is said to be in line with the FCT’s manager’s principal investment strategy to acquire interests in quality income-producing properties used primarily for retail purposes, and to enhance FCT’s presence in the Singapore suburban retail sector.

FCT’s manager CEO Richard Ng said that this is a significant step forward in FCT’s growth strategy as ARF’s portfolio of suburban retail malls shares similar characteristics to FCT’s malls, which focuses on essential spending and F&B trades as well as their locations in populous residential areas and close proximity to transportation nodes.