* Listing is first step in merging Charoen property assets
* Singapore bourse retains lure for trust listings
* Price of units fixed at S$0.88 apiece, listing July 14
(Adds details on pricing, assets and industry comment)
By Anshuman Daga and Saeed Azhar
SINGAPORE, June 23 A trust housing Thai
billionaire Charoen Sirivadhanabhakdi's hotels and hospitality
assets plans to raise nearly $300 million in a Singapore listing
cementing the bourse's status as a home for investments bearing
steady yields rather than the hot growth stocks popular in Hong
The listing of Frasers Hospitality Trust (FHT) marks the
first step in merging the property assets of Charoen's business
empire, including Frasers Centrepoint Ltd and his TCC
Group. Charoen acquired the operations when he took over
conglomerate Fraser and Neave in an $11 billion deal
last year, and will use proceeds from the sale for working
capital and property acquisitions.
The Singapore exchange says it is number two in Asia behind
Japan for real estate investment trusts (REITs) and property
trusts, with over 30 listings and retail portions of initial
public offerings heavily oversubscribed. Trusts continue to lure
investors, even as 2014 IPO proceeds overall trail last year's.
"It's a market that's very much focused on dividends and
yields whereas in Hong Kong it's all about growth," said
Philippe Espinasse, a former investment banker and author of
"IPO: A Global Guide".
Charoen's FHT comprises six serviced residences controlled
by Frasers Centrepoint in cities from Sydney to Edinburgh, and
six hotels, such as Singapore's InterContinental Hotel. The
business managed about 8,000 apartments as of the end of last
September and expects to manage over 15,000 apartments within
the next three years.
The trust is looking to sell 415 million units at a fixed
price of S$0.88 a unit to raise S$365 million ($292 million), it
said in its prospectus issued on Monday. The units will list on
July 14 and Charoen's companies will control 65 percent of the
trust, excluding an over-allotment option.
Six 'cornerstone' investors including Fortress Capital and
DBS Private bank, a unit of DBS Group Holdings, will
buy S$205 million worth of units in the FHT IPO, taking up more
than half of the deal. The IPO comprises both a REIT and a
business trust component.
The presence of cornerstone investors in IPOs is designed to
encourage other investors to join in. REITS and business trusts
have seen robust demand from conservative high net-worth
individuals and institutions hungry for strong dividends.
In January, Singapore property firm Overseas Union
Enterprise raised $272 million through the listing of
a commercial real estate investment trust.
However, 2014 has been a relatively slow year for new
listings in Singapore. In the period up to June 20, proceeds
from Singapore IPOs tumbled nearly three-quarters to $773.6
million compared with the same period a year earlier, according
to Thomson Reuters data.
Singapore's largest IPO this year was PACC Offshore Services
Holdings Ltd's sale, raising $376 million.
DBS, Morgan Stanley, Standard Chartered
and United Overseas Bank are the main
advisers on the FHT deal.
($1 = 1.2503 Singapore Dollars)
(Additional reporting by S. Anuradha of IFR; Editing by Kenneth