Saturday, November 30, 2019

What If The Two Frasers REITs Merge?

The Business Times reported on 29 Nov 2019 that two of Fraser’s REITs, Frasers Commercial Trust (FCOT) and Frasers Logistics & Industrial Trust (FLIT), are making plans to merge, according to sources familiar with the matter1. With both counters halted for trading since the morning of 28 Nov 2019, and not much news forthcoming, the merger issue at this point would be at best, a conjecture.

However, with the slew of trust mergers such as the Viva and ESR one last year and the combination of the OUE hospitality and commercial trusts just a few months ago, the possibility of a merger involving these two seems plausible. FCOT and FLIT are two out of the four trusts in the Frasers family listed in the local Singapore Exchange (SGX).

If (and a very big IF) it is a merger, let us take a look at the numbers before and an implied after:

Total Asset Value
SGD 2,226.9 mil2
AUD 3,554.1 mil3
SGD 5,514.4 mil (AUDSGD 0.925 as at 30 Nov 2019)
Net Asset Value Per Unit
SGD 1.612
SGD 0.953
SGD 2.56
(as at 29 Nov 2019)
1.18 (averaged)
31% (averaged)
Dividend Yield (trailing, as at 30 Nov 2019)
5.7% (averaged)
No. of Properties
95% (committed)2
97.3% (averaged)
Weighted Average Lease Expiry (by gross rental income)
4.9 years (committed)2
6.31 years3
5.61 years (averaged)

Note: The above figures may be asynchronous due to the different “as at” information being presented from the reference sources. It also provides a very simplistic and assumptive point of view should the merger event occur, which may or may not materialize in the future.

At a combined asset value of SGD 5.5 billion, it sits between the current ESR REIT (SGD 3.3 billion as at 30 September 20196) and OUE Commercial REIT (SGD 6.8 billion as at 30 September 20197). Therefore, the asset value is comparable to the two mentioned post-merger REITs.

According to SGX rules, a trading halt cannot exceed three market days8, hence we may know the actual news earliest this coming Monday.


The Bedokian’s portfolio contains FCOT.

1 – Frasers Logistics, Frasers Commercial Trust make plans to merge: sources. The Business Times. 29 Nov 2019. (accessed 30 Nov 2019)

2 – Frasers Commercial Trust. 4QFY19 and FY19 Financial Results. 22 October 2019. (accessed 30 Nov 2019)

3 – Frasers Logistics & Industrial Trust. 4QFY19 Results Presentation. 6 November 2019. (accessed 30 Nov 2019)

4 – Based on last closing price on 29 Nov 2019.

5 – Based on data from Reit Oracle. (accessed 30 Nov 2019)

6 – ESR REIT Financial Results Presentation. 3Q19. 25 Oct 2019. (accessed 30 Nov 2019)

7 – OUE Commercial REIT. Financial Results for 3rd Quarter 2019. 13 November 2019. (accessed 30 Nov 2019)

8 – SGX Rulebook. Mainboard Rules > Chapter 13 Trading Halt, Suspension and Delisting > Part II Trading Halt and Voluntary Suspension > 1302. 30 Nov 2019)

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