Fraser Point Commercial Trust (FCOT) will sell its stake in its current commercial development Keypoint to Aspial Coporation (a joint venure between Fragrance Group and World Class Land) for $360 million. FCOT Spokesman advise that this is a premium for a valuation done for Keypoint at around $285 million. This valuation was done on September 2011. Fragrance Group comment that this will be built into a mixed development known as City Gate
City Gate En Bloc
Shareholders of Fraser Centrepoint cheers as the Keypoint transaction will mean that FCOT can encash its older value asset thereby creating equity for the unit trust holders. According to analysts, this represents a net gain of 72.8 million for its shareholders.
Based on the time where the property was acquired by FCOT, this represents a 3.11 percent return per year for the unit trust investors.
City Gate Bugis
Despite being a good plot of land and sale been monitored by many competitors, analyst note that the sale of keypoint as on the high side. However, Frangrance Group note that this is a good investment as the occupany rate for Keypoint has always been near perfect and that the rent for Keypoint is always increasing.
City Gates, now known as it is by Frangrance Group, will comprise of several residential units and retail shops. The land is zoned for commercial development and is able to yield a total Gross Floor area of 426,421sqft.