Frasers Centrepoint and Frasers Commercial Trust acquire Farnborough Business Park for $314.8 mil
SINGAPORE (Dec 14): Frasers Commercial Trust (FCOT) has made the United Kingdom the first stop in expanding its investment mandate to Europe.
FCOT and controlling unitholder Frasers Centrepoint Limited (FCL) are jointly acquiring Farnborough Business Park (FBP) for GBP174.6 million ($314.8 million).
FBP is a 46.5ha freehold business park comprising 14 commercial buildings with a total net lettable area of 555,000 sq ft located in Thames Valley, west of London.
(Credit: CBRE, Hollis Hockley, DTRE, Ashdown Phillips, XLB Property)
The sale and purchase agreement for a 50% stake each in FBP was signed between seller HEREF Farnborough Holdco and FCL’s wholly-owned subsidiary Frasers Property International and FCOT.
The manager of FCOT intends to finance its proportion of the acquisition of $158.7 million through a combination of debt and equity fund raising.
FBP has been independently valued at GBP175.05 million. The business park is also supported by leases with a WALE of 8.3 years and a diversified base of 36 tenants including corporations such as Fluor, INC Research UK , Time Inc (UK), Aetna Global Benefits (UK) and a unit of Regus.
Designed as an integrated business campus with retail, hotel and other amenities, the property has 98.1% occupancy and a tenant retention rate of around 89%.
Following the completion of the acquisition, FCOT’s pro forma net property income (NPI) as at Sept 30 is expected to increase by 8.7% to $123.8 from $113.8 million.
FCOT’s pro forma DPU is also expected to increase by 1.6% to 9.97 cents from 9.82 cents for the financial year ended Sept 30.
Panote Sirivadhanabhakdi, group CEO of FCL, says, "The acquisition is in line with the group's strategy to grow overseas and recurring income sources in markets that we are familiar with, and FCL has been operating in the UK for over 15 years."
In support of FCOT’s expanded investment mandate, FCL has granted FCOT a right of first refusal over its assets in Europe including the UK.
The acquisition is expected to be completed by end January.
This story, written by PC Lee for The Edge Singapore, first appeared on Dec 14.
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