SINGAPORE – Real estate investment group ARA Group is spinning off US$719.5 million of US hotels under the Hyatt brand into a business trust that it wants to list on the Singapore Exchange (SGX).
If the listing is successful, it will be the first mainboard listing for SGX in almost a year, and will be the Singapore bourse’s first hospitality trust focused purely on the United States market.
The proposed ARA US Hospitality Trust will comprise US dollar-denominated stapled securities of ARA US Hospitality Property Trust (ARA H-Reit), which will hold the hotel properties; and ARA US Hospitality Management Trust (ARA H-BT), which will run the hotels, according to a preliminary prospectus that has been lodged with the Monetary Authority of Singapore. The pricing, amount to be raised and timing of the offering have not been set.
The business trust’s initial portfolio comprises 38 hotels, consisting of 27 Hyatt Place select-service hotels and 11 Hyatt House extended-stay hotels across the United States with an appraised value of US$719.5 million. The hotels have a total of 4,950 rooms, with net property income of US$53.2 million in fiscal 2018 on a weighted average revenue per available room of US$94.
For the eight-month period from May 1 to Dec 31, 2019, the trust is projected to post net property income of US$42.3 million and distributable income of US$26.1 million.
For 2020, the net property income is projected to be US$60.6 million, while the total distributable income is forecast at US$39.8 million.
There will be a concurrent cornerstone offering with the planned initial public offering, with cornerstone investors identified as SingHaiyi’s controlling shareholders Gordon Tang and Celine Tang; banks Bank of Singapore, DBS Bank, Credit Suisse AG and United Overseas Bank; and investment firm ICH Capital.
If the listing is successful, it will be the first new counter on SGX’s Mainboard since the July 2018 listing of foodcourt operator Koufu Group.