Following the announcement of the merger of portfolio between A-HTrust and Ascott Reit in October. Another merger was announced between Fraser Commercial Trust and Fraser Logistic and Industrial Trust. This signify another consolidation for this year.
Fraser Commercial Trust has seen much changes in recent years, making upgrades to China Square Central and Alexandra Technopark in Singapore. The moving out of a long term major tenant Hewlett Packard Singapore from Alexandra Technopark has been a huge impact. Although the management has been able to maintain consistent DPU, the challenges remain for such high concentration of portfolio in Singapore market. After the announcement of the merger, the price shot up and eventually closed at $1.68 on Friday.
Unlike Fraser Commercial Trust, Fraser Logistic and Industrial Trust currently do not own any property in Singapore. It has a diversify of portfolio in Australia and Europe (Germany and England). The merger would gives Fraser Logistic and Industrial Trust some exposure to Singapore market. This merge would turn this Reit into Singapore 9th biggest Reit.
More details can be known here Strait Times News.
I have some holdings for both Reits. Most of it was acquired during the small oil crisis in 2015-2016. This merge would combined my holdings in both Reits into one. Well, that gives me one less counter to monitor.
So what is going to happen to us as unit-holder?
Fraser Logistic and Industrial Trust will be buying over the entire portfolio of Fraser Commercial Reit at a sum of 1.54 billion. For Fraser commercial unit-holder, we would be getting as below:
This means for each Fraser Commercial Trust share, we would be getting a cash of S$0.151, in addition we would allocated 1.233 new FLT share.
Example: If ones owned 10,000 shares in FCOT, he would be getting 10,000 x S$0.151= S$1,510 cash and allocated 12,330 new FLT units.
This whole process would take an estimated 3-4 months to complete. So. We wait. :)
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