The manager says it will make announcements in due course

 

[SINGAPORE] Frasers Hospitality Trust (FHT) : ACV +0.83% is undergoing a strategy review, though there is currently no certainty if its existing business strategy will change.

 

This follows a failed privatisation bid made by managers of the stapled group in 2022 and a trading activity surge in November and December 2024, when the stapled security soared around 40 per cent as its trading volume hit highs. The manager said then that it was &ldquo not aware&rdquo of reasons for the surge.

 

&ldquo As part of this review, various options (including exploring options with the sponsor of FHT) are being considered to ensure alignment with the interests of stapled securityholders,&rdquo the manager said on Wednesday (Apr 23).

 

However, it added that &ldquo there is no certainty or assurance that any transaction in respect of the stapled securities will arise, and the managers may decide to continue with FHT&rsquo s existing business strategy&rdquo .

 

The manager added that it will make announcements in due course, should any material developments that warrant disclosure arise. It urged investors to exercise caution and refrain from taking action with respect to their FHT stapled securities that may be prejudicial to their interests.

 

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

 

Privatisation bid

In 2022, a bid to privatise the Singapore-listed real estate investment trust (S-Reit) fell through as it failed to garner sufficient approval from stapled securityholders.

 

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.

 

In June 2022, Frasers Property Hospitality Trust, a wholly owned subsidiary of FHT&rsquo s sponsor Frasers Property, proposed to acquire all FHT stapled securities aside from those held by itself, its subsidiaries and TCC Group Investments at a cash consideration of S$0.70 apiece.

 

Frasers Hospitality Trust privatisation bid falls shy of required 75% approval in scheme meeting

The proposed privatisation, which would have erased more than S$1.3 billion worth of value from the local bourse if it succeeded then, came after the hospitality-focused S-Reit announced a strategic review of its business earlier in April that year.

 

Challenges FHT faced included difficulty in improving its distribution per stapled security and net asset value amid subdued growth of the hospitality sectors of markets it operates in, alongside the Russia-Ukraine war compounding pandemic-induced supply chain disruptions and raising costs.

Its Japan portfolio posts the largest RevPAR improvement with an 18.3% rise

 

FRASERS Hospitality Trust (FHT) recorded an increase in revenue per available room (RevPAR) across its portfolio in the first quarter ended Dec 31, 2024, on the back of sustained travel demand in all its key markets.

 

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

 

The stapled group&rsquo s key markets all recorded improved RevPAR in the first quarter, with Japan posting the largest rise, data released in a business update on Wednesday (Feb 5) showed.

 

Its Japan portfolio recorded an 18.3 per cent rise in RevPar to 12,193 yen (S$107.63), from 10,310 yen in the year-ago period. Within the country, Tokyo and Osaka experienced significant growth driven by robust inbound travel Kobe observed a modest recovery, noted FHT.

 

For its Singapore portfolio, FHT&rsquo s RevPAR rose 4 per cent to S$256, from S$246 previously. While the average daily rates fell in the first quarter, occupancy rates improved.

 

&ldquo This is consistent with the broader Singapore market, where industry players have adjusted their pricing strategies to boost occupancy,&rdquo the group said.

 

In Australia, RevPAR increased 4.4 per cent to A$236 (S$199.95), from A$226 before. This was primarily driven by higher occupancy, especially in Melbourne, where stronger demand in the corporate and leisure segments supported recovery.

 

For its portfolio in the UK, FHT noted that recovery was better in the first quarter than in the year-ago period, when demand was weaker than expected. RevPAR rose 2.6 per cent to £ 127 (S$214.71), from £ 124.

 

FHT said this was driven by a moderate rise in occupancy, while average daily room rates remained flat. However, higher labour costs posed challenges to overall profitability.

 

In Malaysia, RevPAR grew 3.7 per cent on the year to RM489 (S$149.14), from RM471 in the corresponding period of the prior year.

 

FHT said the Malaysian market&rsquo s key feeder markets, such as Singapore and China, continued to see positive year-on-year growth, even as the Malaysian ringgit has strengthened gradually over the past year.

 

The managers expect global tourism demand to chart a full recovery, despite ongoing economic and climate challenges. By September 2024, global tourism had reached 98 per cent of pre-pandemic levels.