As part of its overseas expansion, the Frasers Centrepoint has acquired four business parks in the United Kingdom for about S$1.2 billion.
The group announced that the acquisition comprises 4.9 million square feet of the built area across four assets. These include Winnersh Triangle, Reading; Chineham Park, Basingstoke; Watchmoor Park, Camberley; and Hillington Park, Glasgow.
According to the Frasers Centrepoint Chief Executive Officer Panote Sirivadhanabhakdi, the acquisition is in line with the group's strategy to grow overseas presence and recurring income sources.
"The Group has been in the UK and Europe for over 15 years, and we now extend our presence from the residential, hospitality, industrial and logistics sectors to include the commercial and business park sector," Sirivadhanabhakdi said.
The said properties are situated near London and Glasgow, enabling easy access to the respective city centres.
Additionally, the group noted that the said properties are strategically located in micro-markets with strong economic fundamentals.
"The Properties are highly defensive with growth prospects. From a tenancy perspective, the rental income from the Properties are underpinned by long term leases to a diversified base of over 400 tenants," the chief executive said.
More so, he explained that each of the Properties was designed with a well-thought out master plan of integrated communities with retail amenities and residential catchments, which serve as a key differentiator, resulting in the Properties enjoying high occupancy rates of over 85% and high retention rates of around 80 – 85%.
After the acquisition, the group will have around S$4.2 billion of assets in the UK and Europe, and commercial properties as a proportion of FCL's S$26.8 billion of total assets will increase to around 30%.
"We can also potentially benefit from the 'network effect', given that we are already in the industrial, logistics, commercial and business park sectors in Australia, Germany, the Netherlands, Singapore and Thailand," Sirivadhanabhakdi stated.
He furthered that the UK is one of the largest economies globally and the acquisition will further help the group grow its business.
"Favourable supply-demand dynamics, driven by the desire for integrated lifestyle and community-based business space with a live-work-play proposition; demand for cost-efficient alternatives to city centre locations; and historical low vacancies, make the UK business park sector a very attractive market to further extend our platform," he concluded.