Singapore Stocks News Of The Week: Frasers Logistics & Industrial Trust, Frasers Commercial Trust, Parkway Life REIT, And More

Here’s a selection of Singapore-listed companies that released noteworthy announcements this week (in chronological order).

Frasers Logistics & Industrial Trust and Frasers Commercial Trust Plan To Merge

Early this week, Frasers Logistics & Industrial Trust (SGX: BUOU) and Frasers Commercial Trust (SGX: ND8U) jointly announced a proposed merger.

Frasers Logistics & Industrial Trust is planning to buy over Frasers Commercial Trust in a S$1.54 billion deal. Frasers Logistics & Industrial Trust will pay S$1.68 per unit of Frasers Commercial Trust through cash and new units. The logistics REIT is also looking to buy over a 50% interest in Farnborough Business Park from its sponsor, Frasers Property Ltd (SGX: TQ5), for some £90.1 million.

The merger and acquisition will improve distribution per unit (DPU) and net asset value of Frasers Logistics & Industrial Trust, among other things.

Parkway Life REIT Acquiring Three Nursing Rehabilitation Facilities In Japan

Parkway Life REIT (SGX: C2PU) will be buying three nursing rehabilitation facilities in Japan for a total sum of JPY3.7 billion (around S$46.3 million).

The acquisition is expected to generate a net property yield of 6.8% and deliver immediate DPU growth to Parkway Life REIT. The deal is expected to be completed by the end of this year.

Yong Yean Chau, executive director and chief executive of the REIT’s manager, commented on the purchase:

“The strong ageing demographics of Japan continue to position PLife REIT favourably as we acquire aged care properties to fortify the resiliency and quality of our portfolio. Working in collaboration with one of our key partners in Japan, K. K. Habitation, we have further deepen our presence in Japan, which represents one of PLife REIT’s growth engines.”

Japan’s life expectancy is projected to increase from 84.2 in 2018 to 87.9 years by 2050, leading to high demand for senior care.

Mapletree North Asia Commercial Trust’s Unitholders Could See Lower Distributions 

Mapletree North Asia Commercial Trust (SGX: RW0U), which owns Festival Walk in Hong Kong, said that its DPU for the six-month period from 1 October 2019 to 31 March 2020 (2H FY19/20) is expected to be significantly lower compared to 2H FY18/19 and 1H FY19/20.

Festival Walk, a retail mall with an office component, was badly damaged during “various incidents on the night of 12 November 2019”, as announced by the REIT last month. The mall has been shuttered since 13 November.

To lessen the impact on the distributable income payable to unitholders, the REIT’s manager will implement a top-up to the distributable income for the quarter from 1 October to 31 December 2019 (3Q FY19/20) to the quarter from 1 April to 30 June 2020 (1Q FY20/21).

Mapletree North Asia Commercial Trust is looking to re-open Festival Walk in the first quarter of next year.

Festival Walk contributed to the majority of the REIT’s net property income in 1H FY19/20 at 62%. To diversify its business, the REIT’s manager is also looking to acquire two freehold, multi-tenanted office properties in Greater Tokyo, Japan. Mapletree North Asia Commercial Trust will own 98.47% of the properties, and the total acquisition cost is S$482.5 million (around JPY37.9 billion).

Fraser and Neave Limited’s New Food & Beverage Facility To Expand Company’s Capabilities 

F&N Foods, a wholly-owned subsidiary of Fraser and Neave Limited (SGX: F99), celebrated the groundbreaking of its purpose-built integrated facility in Singapore. The new property will cost over S$80 million and is expected to be ready in late-2021.

The facility will expand F&N Singapore’s capabilities across all aspects, from production and warehousing to research and development. It will also allow F&N to consolidate most of its Singapore non-alcoholic beverages operations under one roof, resulting in operational synergies and economies of scale.

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