Thai tycoon plans Singapore REIT listing

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frasersA trust holding Thai billionaire Charoen Sirivadhanabhakdi’s hotels and hospitality assets plans to raise nearly $300 million in a Singapore listing, cementing the bourse’s status as a home for investments bearing steady yields rather than the hot growth stocks popular in Hong Kong, Reuters reported.

The listing of Frasers Hospitality Trust (FHT) marks the first step in merging the property assets of Charoen’s business empire, including Frasers Centrepoint Ltd and his TCC Group. Charoen acquired the operations when he took over conglomerate Fraser and Neave in an $11 billion deal last year, and will use proceeds from the sale for working capital and property acquisitions.

The Singapore exchange said it was number two in Asia behind Japan for real estate investment trusts (REITs) and property trusts, with over 30 listings and retail portions of initial public offerings (IPO) heavily oversubscribed. Trusts continue to lure investors, even as 2014 IPO proceeds overall trail last year’s.

“It’s a market that’s very much focused on dividends and yields whereas in Hong Kong it’s all about growth,” said Philippe Espinasse, a former investment banker and author of IPO: A Global Guide.

Charoen’s FHT comprises six serviced residences controlled by Frasers Centrepoint in cities from Sydney to Edinburgh, and six hotels, such as Singapore’s InterContinental Hotel. The business managed about 8,000 apartments as of the end of last September and expects to manage over 15,000 apartments within the next three years.

Six ‘cornerstone’ investors including Fortress Capital and DBS Private bank, a unit of DBS Group Holdings, will buy S$205 million worth of units in the FHT IPO, taking up more than half of the deal. The IPO comprises both a REIT and a business trust component.

The presence of cornerstone investors in IPOs is designed to encourage other investors to join in. REITS and business trusts have seen robust demand from conservative high networth individuals and institutions hungry for strong dividends.

In January, Singapore property firm Overseas Union Enterprise raised $272 million through the listing of a commercial real estate investment trust.

However, 2014 has been a relatively slow year for new listings in Singapore. In the period up to June 20, proceeds from Singapore IPOs tumbled nearly three-quarters to $773.6 million compared with the same period a year earlier, according to Thomson Reuters data.

Singapore’s largest IPO this year was PACC Offshore Services Holdings Ltd’s sale, raising $376 million. DBS, Morgan Stanley, Standard Chartered and United Overseas Bank are the main advisers on the FHT deal.

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Reading Time: 2 minutes

A trust holding Thai billionaire Charoen Sirivadhanabhakdi’s hotels and hospitality assets plans to raise nearly $300 million in a Singapore listing, cementing the bourse’s status as a home for investments bearing steady yields rather than the hot growth stocks popular in Hong Kong, Reuters reported.

Reading Time: 2 minutes

frasersA trust holding Thai billionaire Charoen Sirivadhanabhakdi’s hotels and hospitality assets plans to raise nearly $300 million in a Singapore listing, cementing the bourse’s status as a home for investments bearing steady yields rather than the hot growth stocks popular in Hong Kong, Reuters reported.

The listing of Frasers Hospitality Trust (FHT) marks the first step in merging the property assets of Charoen’s business empire, including Frasers Centrepoint Ltd and his TCC Group. Charoen acquired the operations when he took over conglomerate Fraser and Neave in an $11 billion deal last year, and will use proceeds from the sale for working capital and property acquisitions.

The Singapore exchange said it was number two in Asia behind Japan for real estate investment trusts (REITs) and property trusts, with over 30 listings and retail portions of initial public offerings (IPO) heavily oversubscribed. Trusts continue to lure investors, even as 2014 IPO proceeds overall trail last year’s.

“It’s a market that’s very much focused on dividends and yields whereas in Hong Kong it’s all about growth,” said Philippe Espinasse, a former investment banker and author of IPO: A Global Guide.

Charoen’s FHT comprises six serviced residences controlled by Frasers Centrepoint in cities from Sydney to Edinburgh, and six hotels, such as Singapore’s InterContinental Hotel. The business managed about 8,000 apartments as of the end of last September and expects to manage over 15,000 apartments within the next three years.

Six ‘cornerstone’ investors including Fortress Capital and DBS Private bank, a unit of DBS Group Holdings, will buy S$205 million worth of units in the FHT IPO, taking up more than half of the deal. The IPO comprises both a REIT and a business trust component.

The presence of cornerstone investors in IPOs is designed to encourage other investors to join in. REITS and business trusts have seen robust demand from conservative high networth individuals and institutions hungry for strong dividends.

In January, Singapore property firm Overseas Union Enterprise raised $272 million through the listing of a commercial real estate investment trust.

However, 2014 has been a relatively slow year for new listings in Singapore. In the period up to June 20, proceeds from Singapore IPOs tumbled nearly three-quarters to $773.6 million compared with the same period a year earlier, according to Thomson Reuters data.

Singapore’s largest IPO this year was PACC Offshore Services Holdings Ltd’s sale, raising $376 million. DBS, Morgan Stanley, Standard Chartered and United Overseas Bank are the main advisers on the FHT deal.

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