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Is Frasers Centrepoint Ltd Planning To List Yet Another REIT?

Frasers Centrepoint Ltd (SGX: TQ5) currently manages three real estate investment trusts that are listed on Singapore’s stock market. The company, which was spun off from Fraser and Neave Limited (SGX: F99) back in 2014, is the sponsor and manager of:

  • Frasers Centrepoint Trust (SGX: J69U), a retail REIT that owns six suburban malls across Singapore.
  • Frasers Commercial Trust (SGX: ND8U), a billion-dollar REIT that owns commercial properties in Singapore and Australia.
  • Frasers Hospitality Trust (SGX: ACV), a stapled trust that manages 13 hospitality assets in seven cities around the world.

There may soon be a fourth to add to the list. In 2014, Frasers Centrepoint acquired Australian real estate company Australand for over A$2.6 billion. Australand is one of the largest commercial and industrial property owners in Australia.

Now, it seems that Frasers Centrepoint plans to use some of Australand’s properties to form a logistics and industrial REIT that will be listed in Singapore.

According to a news report this morning, the REIT could be worth up to S$900 million and might be listed as early as next month.

If this listing is successful, the REIT will be the first pure-play Australia-focused industrial REIT to be listed in Singapore. An existing REIT that has similarities would be Ascendas Real Estate Investment Trust (SGX: A17U), which has a significant Australia portfolio after making a billion-dollar acquisition back in 2015.

At the end of 2015, Frasers Centrepoint had a net debt to equity ratio of close to 85% and an interest coverage ratio (earnings before interest and taxes divided by interest expense) of just 4.3. If the new REIT were to list, it should benefit Frasers Centrepoint as it gives the company an opportunity to realize some of the value of its assets and possibly pay off some debt with the proceeds. Shares of Frasers Centrepoint have been halted from trading since 9.32 am this morning.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns shares in Frasers Centrepoint Ltd.