The launch of Frasers Hospitality Trust in Singapore could see a new portfolio of Australian hotels worth more than $500 million change hands.
The group has just raised $S365.2m ($313.5m) in a float that was billed as the largest by a Singaporean real estate investment trust this year. It ended up being 19 times oversubscribed, which was welcome news for lead managers DBS, Morgan Stanley, Standard Chartered and United Overseas Bank.
But it is the potential expansion of the trust’s 12-property portfolio in Australia that has analysts talking. The REIT will start with six hotels and six serviced residences in Singapore, Australia, Britain, Japan and Malaysia, and the strong demand for stock should allow it to quickly make acquisitions.
The fund already owns the Novotel Rockford Darling Harbour and Frasers Suites in Sydney. It has a right of first refusal to purchase six further hospitality assets in Australia held by Thai billionaire Charoen Sirivadhanabhakdi or his Singapore-listed Frasers Centrepoint.
The Australian properties include the Sofitel Sydney Wentworth, InterContinental Adelaide, Hyatt Hotel Canberra, Fraser Place Melbourne, Capri by Fraser in Brisbane and Fraser Suites Perth.
The Sydney property was just bought by Frasers for $202m, and the InterContinental Adelaide and the Hyatt in Canberra were picked up for about $75m apiece four years ago by TCC, so a large reshuffle of the Australian hotel landscape is looming.
Australia’s Perpetual Corporate Trust is trustee for the Singapore REIT and also acts as trustee for the hotels and serviced residences held across the region.
The firm’s general manager, corporate clients, Andrew Cannane, says Singapore continues to grow as a major regional hub for REITs and the Australian group is working on a number of other S-REITs slated to list in 2014.
The thriving Singapore IPO market stands in contrast to Australia’s reasonably quiet market for major property floats, as much of the action has been at the smaller end this year.
Cannane predicts that cross-border flows will continue to grow and says Perpetual is well-placed to help clients across Australia and Singapore.