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ARA US Hospitality Trust debuts on SGX mainboard at US$0.875, just off IPO price

ARA US Hospitality Trust on Thursday made its trading debut on the Singapore Exchange's mainboard board at US$0.875 per stapled security, just slightly below its IPO (initial public offering) price of US$0.88.

The opening price represents a 0.6 per cent discount, or a 0.5 US cent difference from its IPO price. The Straits Times Index was trading down 0.3 per cent.

ARA US Hospitality Trust is a Singapore-based stapled trust comprising ARA US Hospitality Property Trust and ARA US Hospitality Management Trust.

Including six cornerstone investors who have subscribed for about 132.4 million stapled securities, a total of 565.9 million stapled securities were issued to raise gross proceeds of US$498 million.

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The IPO of some 379.8 million stapled securities comprise a public offer of 51.1 million stapled securities, which was 1.1 times subscribed, and a placement tranche of 328.6 million stapled securities that was fully subscribed.

Separately, 8.59 million reserved stapled securities were fully allocated, the managers said.

Lee Jin Yong, CEO of the managers, noted that the support received from both institutional and retail investors had been encouraging, and that the trust will focus on organic growth opportunities through active asset management, and accretive investments.

John Lim, ARA CEO, added that the successful IPO is a "reflection of the market confidence in an ARA sponsored trust", underpinned by a "quality portfolio and an experienced management team".

The SGX entrant is the first pure-play US upscale select-service hospitality trust to be listed on the Singapore bourse.

Its initial portfolio, valued at some US$719.5 million, comprises 38 upscale select-service hotels totalling 4,950 rooms. This includes 27 Hyatt Place hotels and 11 Hyatt House hotels, located across 21 states in the US. In addition, 36 out of the 38 properties have freehold land titles.