Proposal for Frasers Property to take hospitality trust private may raise expectations for sponsors

Ben Paul

Published Wed, Jun 15, 2022 · 05:50 AM

SOME investors will almost certainly gripe about not being offered a high enough price. And, there could be some hand-wringing about the local market losing good listings because of pitifully low valuations.

Yet, the proposed privatisation of Frasers Hospitality Trust : ACV 0% (FHT) by its sponsor group is a positive development for holders of its stapled securities as well as Singapore’s real estate investment trust (Reit) sector.

On Jun 13, Frasers Property : TQ5 0% (FPL) said it plans to take FHT private at S$0.70 per stapled security.

The announcement of the deal included a frank acknowledgement that FHT – which owns 14 assets across 9 cities in Asia, Australia and Europe – has failed to perform well.

Despite a series of acquisitions and asset enhancement initiatives, FHT’s net asset value (NAV) and distributions per stapled security (DPS) have been in a steady decline – even before the pandemic beg…