Frasers Centrepoint readies ship for Singapore float
Singapore-listed property heavyweight Frasers Centrepoint is stepping up sales from its local office portfolio as its residential division continues to perform and it edges closer to floating a swath of its Australian logistics and industrial assets on Singapore Exchange.
The group’s local arm, Frasers Property Australia, is looking to dispose of some of elements of its $2.59 billion commercial and industrial portfolio, with parts of the $1.59 billion industrial property portfolio earmarked for the float and select towers in the $990 million office holdings to to be sold. The proceeds are to be pumped back into developing new funds.
Frasers is bringing a complex in the Sydney suburb of Mascot to market, with its offer of 197-201 Coward St, via Rob Sewell and Paul Noonan of JLL and Scott Gray-Spencer of CBRE, to reap about $140 million.
The complex near Mascot Railway Station boasts tenants including TNT, Qantas and Moet Hennessy, has a weighted average lease term of over five years, and is tipped to have wide appeal as suburban properties are rerated.
Frasers and listed property group GPT are also selling a tower in Melbourne’s Southbank district via Colliers International with hopes of $300 million.
On Monday, reports also emerged that Frasers Centrepoint would look to launch a new real estate investment trust that could be worth $800 million to $900 million, seeded with Australian industrial properties.
Frasers Property Australia chief executive Rod Fehring declined to comment on the prospect of a float in Singapore but says the industrial book is running a little bit ahead of expectations.
We think in the foreseeable future we can manage the issues we’ve identified by allowing more time to allow the processes to work through
The contribution from the Australian unit in Frasers Centrepoint’s first half results was slightly down as most of the company’s residential development sales are skewed towards the second half.
Frasers sold 1457 units in the first half, mainly from projects in NSW and Victoria, and had unrecognised residential revenue of $1.9 billion at the end of March. More than 750 units were completed and settled in the first half and over 2000 units are planned for the rest of the financial year.
“We’ve not experienced any increase in default rates or non-performance,” Fehring says.
“We think in the foreseeable future we can manage the issues we’ve identified by allowing more time to allow the processes to work through.”
He acknowledges that tighter bank lending and FIRB assessment means buyers are taking longer to get organised. The company is still expanding with Bahrs Scrub, a Queensland project with scope for 1350 units.
