Investment

ARA US Hospitality Trust plans $451 million Singapore IPO

SGX/Bloomberg

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The initial portfolio will comprise 38 hotels consisting of 27 Hyatt Place properties and 11 Hyatt House hotels located in the US, with a total of 4,950 rooms and an appraised value of about $720 million.

Wednesday 24, April 2019

(Bloomberg) --ARA US Hospitality Trust is seeking to raise $450.7 million in Singapore’s first main board initial public offering (IPO) this year.

The listing is a return to Singapore’s public markets for John Lim, the founder of ARA Asset Management. A group including Lim and New York-based private equity firm Warburg Pincus agreed to buy out the manager of real estate trusts in late 2016, valuing the firm at around SGD 1.8 billion ($1.3 billion). Lim had said earlier that year his company’s stock was undervalued relative to its earnings, peers and historical prices.

Singapore’s IPO market has been in the doldrums for some time. The ARA IPO will be the first IPO of size in Singapore this year, as companies have raised just $28 million from first-time share sales, according to data compiled by Bloomberg. In 2018 the money raised from the stock exchange’s 15 IPOs, excluding depositary receipts, fell more than 80 per cent to $535 million.

ARA US Hospitality Trust’s cornerstone investors will include Credit Suisse Group, ICH Capital as well as Singapore property investor Gordon Tang and his wife Chen Huaidan, Bank of Singapore, DBS Group Holdings and United Overseas Bank, which are subscribing on behalf of their wealth management and private banking clients.

A distribution yield of eight per cent is forecast for 2020 and trading is expected to start 9 May. Orders from institutional investors will be taken through 30 April and unit holders can opt to receive their distributions in either US dollars or Singapore dollars.

DBS is the sole issue manager while Oversea-Chinese Banking Corporation, UOB and Credit Suisse are also helping to arrange the sale.

 

TAGS : ARA US Hospitality Trust, John Lim, Warburg Pincus, John Lim, SGX IPO, Credit Suisse Group, ICH Capital, Gordon Tang, Chen Huaidan, Bank of Singapore, DBS Group Holdings, United Overseas Bank

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