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Mercatus divests 50% indirect stake in Nex for $652.5 mil

Felicia Tan
Felicia Tan • 2 min read
Mercatus divests 50% indirect stake in Nex for $652.5 mil
The consideration was determined based on the adjusted net asset value of Gold Ridge, taking into account the agreed property value of $2.08 billion for Nex. Photo: Mercatus
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Mercatus Co-operative, the real estate arm of NTUC Enterprise, has divested its 50% indirect stake in Nex to Frasers Property Limited and Frasers Centrepoint Trust (FCT) for a consideration of $652.5 million.

The agreement was entered into by Mercatus’ subsidiary, Mercatus Tres, on Jan 26.

In line with the divestment, Mercatus Tres will sell its 50% interest in Gold Ridge, which owns, manages and operates Nex to Frasers Property and FCT.

The consideration was determined based on the adjusted net asset value of Gold Ridge, taking into account the agreed property value of $2.08 billion for Nex as at Dec 31, 2022.

The property was appraised by an independent valuer, Colliers International Consultancy & Valuation (Singapore) Pte. Ltd. Colliers International, who was appointed by FCT and Frasers Property. According to FCT and Frasers Property, the net property income (NPI) yield based on the property's NPI in the FY2022 is in the region of high 4%.

Richard Ng, CEO of FCT's manager, says, “Nex is a complementary fit to FCT’s existing suburban retail property portfolio. This acquisition will further enhance FCT’s portfolio diversification and strengthen its performance.”

See also: Mercatus divests two retail assets in Singapore for $2.16 billion

Soon Su Lin, Frasers Property Singapore's CEO, adds, “Retail is one of the five asset classes in Frasers Property’s multinational portfolio. This investment in Nex further strengthens our focus in the suburban retail segment where we already have an established platform and strong capabilities.”

Nex, which is one of Singapore's largest suburban retail properties and the largest suburban retail mall in the northeastern part of the country, is located within the Serangoon housing estate. It has a total net lettable area (NLA) of 634,631 sq ft over seven retail levels including two basement levels.

As at end-November 2022, the mall has a committed occupancy of 99.9% The property has a tenure of 99 years from 2008.

Units in FCT closed at $2.20 while shares in Frasers Property closed at 92.5 cents on Jan 26.

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