Frasers Group tightens grip on PGIM Asia Retail Fund

It may benefit from its growing stake in the fund if more assets continue to be sold.

The combined stake of Frasers Centrepoint Trust (FCT) and Frasers Property (FPL) in PGIM Real Estate Asiaretail Fund Limited (PGIM Retail fund) hit 87.93% from 74.87%, according to an analyst report by DBS Research.

FCT raised its stake in the fund from 21.13% to 24.82% last 30 September, whilst FPL’s stake grew from 53.74% to 63.11% the day after. These moves came due to a redemption of 69,714 shares by the fund.

Furthermore, both firms are also expected to benefit from the reported sale of 1st Avenue Mall, one of the three retail malls under the PGIM Retail Fund, as it is likely to further kick-start a winding down of the fund with proceeds being returned to the remaining investors.

The property has a consideration of about $51m (RM153m).

Following this sale, the report also noted that the fund’s continuous efforts in divesting its non-core assets could also be a boon for its remaining investors as they are likely to have their stakes redeemed in subsequent liquidity events going forward.

“We see this as the key catalyst for both FPL and FCT if the group is able to gain further control of the properties and convert its stake into actual physical asset ownership,” said Derek Tan, analyst at DBS Research.

Last March, Frasers Property raised its stake in PGIM Retail Fund from 29.99% to 47.82% for $601.5m, marking as the second acquisition of the fund. Meanwhile, a subsidiary of Frasers Centrepoint Trust, FCT Holdings (Sigma), has completed the acquisition of 17.13% stake in the fund for $342.5m last April.