Frasers Centrepoint Trust (FCT) announced the long-anticipated acquisition of Changi City Point last evening. The purchase consideration of S$305.0m was based on the valuations by two independent valuers and translates to S$1,471.74 psf NLA. According to management, the retail mall is strategically located in the heart of Changi Business Park and near to Singapore Expo, educational institutes, residential estates, and public transportation facilities, thus allowing it to benefit from strong shopper catchment.

FCT intends to finance the acquisition using a combination of debt and equity (via private placement), and expects the deal to be DPU-accretive. We understand the transaction is conditional on, among other terms, JTC and unitholders’ approval. A circular will be set out in due course to provide details on the financing structure and financial impact to FCT. We place our S$2.02 fair value and Buy rating under review pending more information on the asset injection.

Source: OCBC Research - 9 Apr 2014