Singapore's Frasers Centrepoint plans REIT IPO

Singapore-based property developer Frasers Centrepoint is preparing to establish a real estate investment trust (REIT) to hold onto its hotel assets, according to The Straits Times. A general meeting is scheduled for May 28 to seek shareholder approval to move its hospitality properties to the Frasers Hospitality Trust (FHT), and make an initial public offering of some of its residences and hotel interests.

Channel NewsAsia reported that FHT will have a portfolio 12 properties, including the InterContinental Singapore and Westin Kuala Lumpur hotels. Frasers Centrepoint currently manages the Frasers Centrepoint Trust and Frasers Commercial Trust, and will also manage FHT.

"The setting up of FHT is in line with our ongoing strategy to optimize capital productivity and strengthen our income base through REIT platforms," Lim Ee Seng, CEO of Frasers Centrepoint Group, said in a statement.

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The six serviced residences to be injected into FHT are the Fraser Suites Singapore, Fraser Suites Sydney, Fraser Place Canary Wharf, Fraser Suites Queens Gate, Fraser Suites Glasgow, and Fraser Suites Edinburgh, which have an appraised value of $495 million based on a 75-year leasehold.

FHT's other six properties will come from Frasers Centrepoint's Thai parent TCC Group. These properties include the InterContinental Singapore, Novotel Rockford Darling Harbour, Park International London, Best Western Cromwell London, ANA Crowne Plaza Kobe and Westin Kuala Lumpur.

People with knowledge of the deal told the Wall Street Journal that the REIT IPO could raise as much as $500 million, and that the company may plan for a listing either late in the second quarter or early in the third quarter.

This would also mark the first REIT listing in Singapore since property developer OUE Commercial REIT raised nearly $300 million in an IPO for its offices and shopping mall properties.

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