Frasers Property (formerly: Frasers Cpt (FCL))

[CityFarmer]

The book value is based on freehold status of the properties. The divestment valuation is based on 75 year lease granted to the REIT on the injection.

GG

Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?

How would FCL accounts the divestment? What I do understand is that FCL remains as the ultimate owner of the land, but not the building. So any land appreciation should be recognised by FCL and not the Reit right? And assuming that the buildings do exist after end of 75 years lease, will FCL took over the ownership of the buildings without having to pay anything? It's is rather a confusing and complicated transaction for me being an outdated accounting graduate.

Its like Singapore govt and 99 leasehold properties - from public to private.

Anyway, such deals are not deal as most sponsors have been doing such deals - CDL pioneered it with their freehold industrial property at Lor Chuan to Sabana, hospitality reits as well.

To add-on. The SPH Reits's Paragon was also done with the same approach.