Frasers Property (FPL), through its wholly-owned subsidiary, Lion (Singapore), has bought the 1,477-seat Golden Village cineplex in Yishun, formerly known as Yishun 10, for $48 million.

On June 2, FPL’s subsidiary entered into a sale and purchase agreement (SPA) with Golden Village Multiplex, an indirect wholly-owned subsidiary of Hong Kong-listed film production company Orange Sky Golden Harvest Entertainment.

The cineplex is located on the second to fourth floors at 51 Yishun Central 1, next to the Northpoint City mall. It has a carrying value of around $45.1 million.

Under the sale and purchase agreement, FPL’s unit will have to pay an additional $2 million with GST if it obtains or procures building permission for the redevelopment of the property within 12 months from the date of completion.

Golden Village Multiplex has agreed to help obtain the renewal of the fire certificate for the property by no later than June 29. The vendor will also appoint a “competent person” to inspect the building’s facade and submit the inspection report to the Building and Construction Authority of Singapore (BCA) by June 30.

The SPA is subject to Orange Sky’s shareholders approving the disposal and no objections from the Hong Kong bourse among other factors.

FPL is also entitled to rescind the SPA if there is a breach of warranties and representations on the title of the property

Upon the completion of the transaction, the cinema will be leased to Golden Village Multiplex. The lease agreement will take place for a term of 18 months from the date of completion.

The monthly rent payable will be 10% of Golden Village Multiplex’s monthly gross sales from its business operations on the property.

“Frasers Property has entered into a sale and purchase agreement to acquire the portion of Yishun 10 not currently owned by Frasers Centrepoint Trust. With an 18-month lease-back period as part of the agreement, operations at Yishun 10 will continue as usual following the acquisition. The acquisition of this strategic asset is in line with the group’s active portfolio management approach," says a FPL spokesperson.

As at 12.08pm, shares in FPL are trading flat at 81.5 cents. Shares in Orange Sky are trading 1.1 HK cents higher (0.18 cents) or 32.35% up at 4.5 HK cents on the HK bourse.