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Frasers Hospitality share placement 21 times subscribed

Strong demand from institutional investors for Frasers Hospitality Trust's initial public offering.

SINGAPORE: Frasers Hospitality Trust on Monday (June 30) provided more details about its S$367.9 million initial public offering (IPO), saying the offer has seen strong demand from institutional investors.

The hotels and serviced residences real estate investment trust (REIT) said its international placement of 139.6 million stapled securities at S$0.88 apiece attracted interests valued around S$2.5 billion - which translates to a subscription rate of around 21 times.

A group of cornerstone investors, including DBS and Fortress Capital Asset Management, had subscribed for another 232.9 million stapled securities, also priced at S$0.88 each.

The public portion of its IPO, aimed at ordinary retail investors, will comprise 45.5 million stapled securities priced at S$0.88 apiece.

The public offer opens at 9am on Tuesday and closes at 12pm on July 10, Frasers Hospitality said. The stapled securities will begin trading on the Singapore Exchange on July 14.

Frasers Hospitality - which is sponsored by Singapore property giant Frasers Centrepoint Ltd - will have an initial portfolio of six hotels and six serviced residences valued around S$1.7 billion.

The six hotels, which came from Frasers Centrepoint's Thai parent TCC Group, are the InterContinental Singapore, Novotel Rockford Darling Harbour, Park International London, Best Western Cromwell London, ANA Crowne Plaza Kobe and Westin Kuala Lumpur.

The six serviced residences are Fraser Suites Singapore, Fraser Suites Sydney, Fraser Place Canary Wharf, Fraser Suites Queens Gate, Fraser Suites Glasgow and Fraser Suites Edinburgh.

Frasers Hospitality also has first right of refusal to buy another 18 properties from its parent companies.

The REIT offers investors an indicative yield of 7 per cent for the full financial year from 1 October 2014 to 30 September 2015.

Frasers Centrepoint and TCC Hospitality, an associate of TCC Group, will together hold around 65 percent of Frasers Hospitality after the IPO.

 

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