The offer price, which values the trust at S$1.37 billion, implies a premium of 11% over its NAV

 

[SINGAPORE] A second attempt to privatise Frasers Hospitality Trust (FHT) succeeded on Friday (Aug 15), after stapled security holders approved the privatisation offer at a scheme meeting.

 

Of the 718 stapled security holders present and voting, 618 &ndash with a total of 321.2 million units, or 99.2 per cent of all units represented at the meeting &ndash voted in favour of the proposed scheme. The remaining 100 stapled security holders, with an aggregate of 2.6 million units, voted against.

 

For the scheme to be passed, the resolution had to be approved by a majority of stapled security holders, representing at least 75 per cent of the total number of units held by those present and voting, either in person or by proxy.

 

Real estate giant Frasers Property had proposed to privatise FHT at S$0.71 per stapled security on May 14, citing the trust&rsquo s inability to improve its distribution and growth in the face of macroeconomic headwinds.

 

The offer price values the trust at S$1.37 billion. It implies a premium of 11 per cent over its net asset value (NAV) this exceeds the implied average premium over NAV of 1.04 times for Singapore real estate investment trust privatisations since 2020. 

 

Various parties, including the offeror &ndash a wholly owned subsidiary of Frasers Property &ndash the sponsor of FHT and its concert parties, substantial stapled security holders of FHT, and the managers of FHT abstained from voting on the scheme.

 

This is the second time in three years that Frasers Property has attempted to privatise the stapled group. It tried to do so in September 2022 for S$0.70 per stapled security, though the attempt narrowly failed. 

 

Eric Gan, chief executive officer of FHT&rsquo s managers, said: &ldquo As the managers of FHT, it has been our objective to maximise and realise value for our stapled security holders&hellip We will now focus on taking the necessary steps to complete the transaction so that stapled security holders can receive their funds in a timely manner.&rdquo

 

The offer price of S$0.71 per stapled security represents an 11.1% premium over its net asset value

 

[SINGAPORE] Frasers Property is proposing to privatise Frasers Hospitality Trust : ACV +3.01% (FHT) at S$0.71 per stapled security, due to FHT&rsquo s inability to improve the distribution and growth of FHT in the face of macroeconomic headwinds.

 

This is the second time in three years that Frasers Property has attempted to privatise the stapled group. It tried to do so in September 2022 for S$0.70 per stapled security, though the privatisation attempt failed then after being voted down by shareholders. 

 

In a statement on Wednesday (May 14), FHT&rsquo s manager said the decision followed a strategic review of FHT amid a worsening macroeconomic environment. It said a weaker foreign exchange rate against the Singapore dollar and a higher interest rate environment, among other factors, have made it more difficult for the managers of FHT to grow its distribution and net asset value (NAV).

 

The current offer price of S$0.71 apiece implies a 1.11 times, or 11.1 per cent, premium over its NAV, and exceeds the implied average premium over NAV of former Singapore real estate investment trust (Reit) privatisations since 2020 of 1.04 times.

 

As at the time of the announcement, FHT has issued about 1.9 billion stapled securities.

 

&ldquo We have put forward an offer for FHT which safeguards the interests of Frasers Property&rsquo s shareholders. The arm&rsquo s length offer was arrived at after taking into consideration the financial and business effects of the privatisation to Frasers Property, both over the short and long term, in addition to a number of FHT financial reference points,&rdquo said Loo Choo Leong, group chief financial officer of Frasers Property.

 

During a briefing to the media on Wednesday afternoon, Eric Gan, chief executive of FHT&rsquo s manager, said the macroeconomic environment has gone &ldquo further south&rdquo since the last attempt to privatise FHT in 2022.

 

&ldquo Foreign exchange has continued to weaken further. Interest rate has risen, further impacting us,&rdquo he said.

 

The Covid-19 pandemic has also had a &ldquo significant, lasting impact&rdquo on FHT&rsquo s valuation. While FHT was trading at 0.95 times its NAV prior to the pandemic, the trust&rsquo s valuation has become &ldquo worse&rdquo after the pandemic, trading at 0.73 times its NAV, said Gan.

 

FHT has faced challenges attracting capital flow due to its scale and size. As a small Reit and small float, it is unable to attract institutional investors to grow meaningfully. It also does not have as much debt headroom as its peers to engage in acquisitions.

 

Privatisation route offers &lsquo certainty&rsquo

During FHT&rsquo s strategic review last month, the board considered several options to unlock the trust&rsquo s potential value, said Gan.

 

These include keeping FHT listed, but potentially divesting selected assets or rebalancing its portfolio. The manager also considered selling the entire platform to a third party and distributing the net proceeds to securityholders.

 

However, the board eventually agreed that privatisation was the best way forward, as it would allow stapled securityholders to immediately realise their investment at a premium to NAV. It would also offer certainty as it will be executed by the sponsor, which has obtained the financial resources to conduct the privatisation exercises.

 

Gan was optimistic that the manager would be successful in its bid to privatise FHT this time around.

 

In 2022, Frasers Property attempted to privatise the stapled group for S$0.70 per stapled security. However, the resolution narrowly missed the minimum approval level of votes representing 75 per cent of units required for it to be passed at the September 2022 scheme meeting. It attained favourable votes representing 74.88 per cent of units from around 70.91 per cent of stapled securityholders.

 

Gan was of the view that the latest offer price of S$0.71 is &ldquo a lot higher&rdquo than S$0.70 when compared in terms of the premium it offers on the NAV. While the previous offer of S$0.70 was at a 7 per cent premium to NAV, the latest offer is higher at 11 per cent.

 

Said Gan: &ldquo Don&rsquo t just look at one cent, but look at the percentage. I think that speaks volumes, because 11.1 per cent is a lot higher than any of the other metrics.&rdquo

 

On May 6, FHT reported a 6 per cent drop in its distribution per stapled security to S$0.010257 for its first half year ended Mar 31, from S$0.01091 in the corresponding year-ago period, in light of lower net property income (NPI) and higher finance costs.

 

NPI for the period fell 2.5 per cent on the year to S$43.5 million from S$44.7 million, while revenue rose 0.9 per cent to S$63.8 million from S$63.3 million in H1 FY2024, due to increased contributions from Koto no Hako &ndash the retail component of ANA Crowne Plaza Kobe &ndash and higher other income.

 

The scheme is expected to be effective by end-August 2025, subject to the approval of the scheme stapled securityholders and various other conditions being fulfilled. The scheme meeting for stapled securityholders is expected to be in late July.

The offer price of S$0.71 per stapled security represents an 11.1% premium over its net asset value in S$1.37 billion deal

 

[SINGAPORE] Frasers Property is proposing to privatise Frasers Hospitality Trust : ACV +3.01% (FHT) at S$0.71 per stapled security, due to FHT&rsquo s inability to improve the distribution and growth of the trust in the face of macroeconomic headwinds.

 

This is the second time in three years that Frasers Property has attempted to privatise the stapled group. It tried to do so in September 2022 for S$0.70 per stapled security, though the privatisation attempt failed then after being voted down by shareholders. 

 

In a statement on Wednesday (May 14), FHT&rsquo s manager said the decision followed a strategic review of FHT amid a worsening macroeconomic environment. It said a weaker foreign exchange rate against the Singapore dollar and a higher interest rate environment, among other factors, have made it more difficult for the managers of FHT to grow its distribution and net asset value (NAV).

 

The current offer price of S$0.71 apiece values the trust at S$1.37 billion. The price implies a 1.11 times, or 11.1 per cent, premium over its NAV, and exceeds the implied average premium over NAV of former Singapore real estate investment trust (Reit) privatisations since 2020 of 1.04 times.

 

As at the time of the announcement, FHT has issued about 1.9 billion stapled securities.

 

&ldquo We have put forward an offer for FHT which safeguards the interests of Frasers Property&rsquo s shareholders. The arm&rsquo s length offer was arrived at after taking into consideration the financial and business effects of the privatisation to Frasers Property, both over the short and long term, in addition to a number of FHT financial reference points,&rdquo said Loo Choo Leong, group chief financial officer of Frasers Property.

 

During a briefing to the media on Wednesday afternoon, Eric Gan, chief executive of FHT&rsquo s manager, said the macroeconomic environment has gone &ldquo further south&rdquo since the last attempt to privatise FHT in 2022.

 

&ldquo Foreign exchange has continued to weaken further. Interest rate has risen, further impacting us,&rdquo he said.

 

The Covid-19 pandemic has also had a &ldquo significant, lasting impact&rdquo on FHT&rsquo s valuation. While FHT was trading at 0.95 times its NAV prior to the pandemic, the trust&rsquo s valuation has become &ldquo worse&rdquo after the pandemic, trading at 0.73 times its NAV, said Gan.

 

FHT has faced challenges attracting capital flow due to its scale and size. As a small Reit and small float, it is unable to attract institutional investors to grow meaningfully. It also does not have as much debt headroom as its peers to engage in acquisitions.

 

Privatisation route offers &ldquo certainty&rdquo

During FHT&rsquo s strategic review last month, the board considered several options to unlock the trust&rsquo s potential value, said Gan.

 

These include keeping FHT listed, but potentially divesting selected assets or rebalancing its portfolio. The manager also considered selling the entire platform to a third party and distributing the net proceeds to securityholders.

 

However, the board eventually agreed that privatisation was the best way forward, as it would allow stapled securityholders to immediately realise their investment at a premium to NAV. It would also offer certainty as it will be executed by the sponsor, which has obtained the financial resources to conduct the privatisation exercises.

 

Gan was optimistic that the manager would be successful in its bid to privatise FHT this time around.

 

In 2022, Frasers Property attempted to privatise the stapled group for S$0.70 per stapled security. However, the resolution narrowly missed the minimum approval level of votes representing 75 per cent of units required for it to be passed at the September 2022 scheme meeting. It attained favourable votes representing 74.88 per cent of units from around 70.91 per cent of stapled securityholders.

 

Gan was of the view that the latest offer price of S$0.71 is &ldquo a lot higher&rdquo than S$0.70 when compared in terms of the premium it offers on the NAV. While the previous offer of S$0.70 was at a 7 per cent premium to NAV, the latest offer is higher at 11 per cent.

 

Said Gan: &ldquo Don&rsquo t just look at one cent, but look at the percentage. I think that speaks volumes, because 11.1 per cent is a lot higher than any of the other metrics.&rdquo

 

On May 6, FHT reported a 6 per cent drop in its distribution per stapled security to S$0.010257 for its first half year ended Mar 31, from S$0.01091 in the corresponding year-ago period, in light of lower net property income (NPI) and higher finance costs.

 

NPI for the period fell 2.5 per cent on the year to S$43.5 million from S$44.7 million, while revenue rose 0.9 per cent to S$63.8 million from S$63.3 million in H1 FY2024, due to increased contributions from Koto no Hako &ndash the retail component of ANA Crowne Plaza Kobe &ndash and higher other income.

 

The scheme is expected to be effective by end-August 2025, subject to the approval of the scheme by stapled securityholders and various other conditions being fulfilled. The scheme meeting for stapled securityholders is expected to be in late July.

Net property income declines 2.5% on the year to S$43.5 million

 

[SINGAPORE] Frasers Hospitality Trust : ACV 0% (FHT) on Tuesday (May 6) posted a 6 per cent drop in distribution per stapled security (DPS) to S$0.010257 for its first half year ended Mar 31, from S$0.01091 in the corresponding year-ago period.

 

The decline was attributed to lower net property income (NPI) and higher finance costs arising from the refinancing of borrowings in a higher interest rate environment.

 

NPI for the period fell 2.5 per cent on the year to S$43.5 million from S$44.7million, while revenue rose 0.9 per cent to S$63.8 million from S$63.3 million in H1 FY2024.

 

The higher revenue was supported by increased contributions from Koto no Hako, the retail component of ANA Crowne Plaza Kobe, and higher other income.

 

However, the managers of the stapled group noted that it was &ldquo largely offset by the absence of one-off income adjustments that had boosted performance&rdquo in H1 FY2024.

 

The revenue per available room (RevPAR) of ANA Crowne Plaza Kobe improved by 17.6 per cent year-on-year. This was driven by an 11.3 percentage point increase in occupancy, supported by robust domestic demand and sustained growth in international tourism. This is in addition to a favourable exchange rate.

Income available for distribution fell 6.1 per cent to S$21.9 million from S$23.4 million in the same year-ago period.

 

The distribution will be paid on Jun 27, after the record date on May 15.

 

In Singapore, RevPAR for H1 FY2025 declined by 1.8 per cent year on year, as an 8.2 per cent year-on-year decrease in average daily rate (ADR) was partially offset by a 4.8 percentage point increase in occupancy.

The softer ADR was mainly attributed to weaker performance in the transient segment, which refers to travellers who book individual stays, often for shorter periods, without being part of a larger group or corporate agreement, particularly in Q2 FY2025.

 

The managers of the stapled group note that the decline was most pronounced in March due to a high base effect from major concert events in the same period last year.

 

Despite lower rooms revenue, gross operating revenue rose by 2 per cent year on year, supported by stronger food and beverage performance at InterContinental Singapore. FHT&rsquo s gross operating profit for the Singapore portfolio also increased by 3.1 per cent year on year.

 

The stapled group&rsquo s gearing stood at 34.8 per cent as at Mar 31, with a weighted average debt maturity of 2.7 years. Its interest coverage ratio was at three times.

 

The effective cost of borrowing rose to 3.6 per cent for the period, from 3.4 per cent as at Mar 31, 2024, due to refinancing at higher interest rates. 

 

Eric Gan, chief executive officer of the managers of the stapled group, said: &ldquo While cost pressures persist and the market environment remains challenging, performances across our portfolio remained relatively stable... The addition of Koto no Hako also further strengthened our income base.&rdquo

 

He added that FHT&rsquo s priorities remain anchored on prudent capital management, operational efficiency and sustainability, amid ongoing macroeconomic uncertainties and geopolitical tensions, as it positions its portfolio to benefit from the gradual recovery in global tourism.

 

FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust.

Net property income is down 1.3 per cent at S$44.7 million from S$45.2 million

 

FRASERS Hospitality Trust : ACV -1.09% (FHT) recorded a 13.7 per cent fall in distribution per stapled security (DPS) to S$0.01091 for its first half year ended Mar 31, 2024, from S$0.012649 in the corresponding year-ago period.

 

Gross revenue for H1 grew 1.7 per cent to S$63.3 million from S$62.2 million. This followed a slight improvement in FHT&rsquo s hospitality portfolio performance due to travel recovery in most of its operating markets, said its managers on Thursday (May 9).

 

Additionally, the managers noted that from Mar 1, FHT assumed the economic interest of Koto no Hako Kobe, the retail component of ANA Crowne Plaza Kobe. The property has a net lettable area of 22,431 square metres with a committed occupancy of 60.7 per cent. 

 

Net property income was down 1.3 per cent at S$44.7 million, from S$45.2 million. 

 

Income available for distribution declined 13.7 per cent to S$23.4 million, from S$27.1 million.

 

This came as the trust incurred higher finance costs. It refinanced its borrowings that matured in FY2023, amid a higher interest-rate environment, its managers said.

 

The distribution will be paid on Jun 28, after the record date on May 17. 

 

In Singapore, while FHT&rsquo s portfolio average daily rate (ADR) grew 3.4 per cent year on year, occupancy fell 7.5 percentage points. Overall, revenue per available room (RevPAR) declined 6.7 per cent from a year ago.

 

The managers noted that the demand that supported Fraser Suites Singapore&rsquo s strong performance in H1 FY2023 began to normalise in H1 FY2024, due to the easing of relocation demand and a slowdown in the long-stay market, impacted by a decline in the average length of stay.

 

&ldquo Despite an increase in tourism arrivals, a strong Singapore dollar caused Singapore to become a relatively more expensive destination for business and leisure, impacting price sensitive segments,&rdquo said the managers.

 

FHT&rsquo s Singapore portfolio gross operating revenue declined 4.4 per cent year on year and gross operating profit dropped 20.6 per cent, which the managers attributed to higher operating costs.

 

While the stapled group&rsquo s UK portfolio recorded a 4.4 per cent year-on-year fall in H1 RevPAR, weighed down by a dip in ADR, there were improvements across its Australia, Japan, Malaysia and Germany properties, following recovery in travel demand.

 

As at Mar 31, FHT&rsquo s gearing stood at 35.5 per cent, and its weighted average debt to maturity was 2.08 years. The trust has S$127 million in loans due for refinancing in FY2024, or 16.8 per cent of its total gross borrowings.

 

The managers said FHT has &ldquo ample headroom and adequate liquidity&rdquo to meet its operational needs and financial commitments. 

 

FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust.

 

Frasers Hospitality Trust has turned down an offer from its sponsor to acquire Capri by Fraser, Changi City.

 

According to FHT' s manager on March 19, Frasers Property TQ5 0.00% , the sponsor, has given its intention to sell the hotel to a third party.

 

Under an existing agreement, FHT has the first right of refusal over the property, which has a remaining lease of 45 years.

 

" The managers have considered the opportunity and is of the view that acquiring the property does not meet" FHT' s prevailing investment strategy. 

 

" As such, the managers have decided not to exercise the ROFR.

 

" The managers will continue to explore opportunities from both the sponsor and third parties which are in line with FHT' s investment strategy," says FHT.

 

FHT' s refusal is the second acquisition offer rejected by an S-REIT over the past month.

 

On Feb 29, Paragon REIT turned down an offer by Cuscaden Peak to buy the Seletar Mall for $550 million.

 

The mall was later sold to Allgreen Properties, part of Malaysian tycoon Robert Kuok' s empire.

 

FHT closed March 19 at 46 cents, unchanged for the day but down 9% year to date Frasers Property closed at 83 cents, unchanged for the day and down 7.78% year to date.

FRASERS Hospitality Trust : ACV +1.08% (FHT) saw an increase in revenue per available room (RevPAR) across its portfolios in the first quarter ended Dec 31, 2023, as tourism demand continued to show &ldquo remarkable resilience&rdquo .

 

FHT is a stapled group comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust.

 

The stapled group observed &ldquo sustained recovery&rdquo in its markets of Singapore, Australia, United Kingdom, Japan and Malaysia, the managers said in a business update on Thursday (Feb 1).

 

For its Singapore portfolio, FHT recorded year-on-year declines in all operating metrics due to the &ldquo competitive pressure and easing of pent-up travel demand&rdquo . RevPAR fell 16.6 per cent on year, while average daily rate (ADR) improved slightly, by 1.2 per cent on year, in the first quarter.

 

Meanwhile, its Australia portfolio continued to see sustained year-on-year improvements, with RevPAR growing 5.7 per cent. This was supported by growth in occupancy, which was buoyed by the recovery of corporate, MICE (meetings, incentives, conferences and exhibitions) and group segments.

 

As for its UK portfolio, RevPAR remained &ldquo relatively flat&rdquo year on year, despite the increase in competition citywide and the easing of pent-up travel, said the managers.

 

ANA Crowne Plaza Kobe in Japan saw RevPAR climb 12.9 per cent year on year, supported by growth in ADR and occupancy, which gathered pace in tandem with Kobe&rsquo s market recovery.

 

Meanwhile, the Westin Kuala Lumpur in Malaysia recorded &ldquo strong year-on-year rebound in all operating metrics&rdquo . RevPAR rose 22.1 per cent, supported by ADR and occupancy growth on the back of strong corporate and leisure demand.

 

The managers said Maritim Hotel Dresden in Germany saw performance further improve year on year, supported by the recovery in domestic travel and the return of MICE business.

 

Looking ahead, the managers said continued restoration of international flight capacity could see further recovery in China&rsquo s outbound tourism, which needs time to return to pre-pandemic levels.

 

They cited data from the United Nations World Tourism Organization, which stated that international tourism will fully recover to pre-Covid levels in 2024. Initial estimates point to 2 per cent growth above 2019 levels, said the managers.