Frasers Hospitality Trust falls to a confluence of headwinds – are more S-Reits at risk?

JUST a month shy of 8 years since its initial public offering (IPO), the managers of Frasers Hospitality Trust (FHT) are ready to call it quits.

FHT on Jun 13 announced a proposed privatisation by its sponsor group. Under the scheme of arrangement, the offeror – a wholly owned subsidiary of real estate giant Frasers Property Limited (FPL) – will pay S$0.70 in cash for each FHT stapled security that FPL and TCC Group Investments do not already hold.

The managers of FHT were candid about their reasons for the proposed privatisation, which comes 2 months after the Singapore-listed real estate investment trust (S-Reit) announced a strategic review.