SINGAPORE (May 2): ARA US Hospitality Trust on Thursday registered its prospectus with the Monetary Authority of Singapore in connection for the proposed listing on Singapore Exchange’s MainBoard.
This will be the first pure-play US upscale select-service hospitality portfolio to be listed on the SGX.
See: ARA US Hospitality Trust lodges prelim prospectus
The offering of about 379.8 million stapled securities consists of an offering of 51.1 million stapled securities to the public in Singapore and an international placement of 328.6 million stapled securities to investors outside the US – including 8.6 million stapled securities reserved for subscription by the directors, management, employees and business associates of ARA and its subsidiaries.
Based on the offering price of US$0.88 per stapled security, gross proceeds of US$498 million ($678 million) are expected to be raised from the offering, the issuance of cornerstone stapled securities, and the sponsor subscription stapled securities.
Investors can expect a distribution yield of 8.0% for forecast period 2019 and expected distribution yield growth of 2.1% in projection year 2020, representing a total return of 10.1%.
The public offer will open at 9pm on Thursday and closes 12 noon on May 7. Trading of the stapled securities in ARA US Hospitality Trust on the Mainboard is expected to start at 2pm on May 9.
ARA US Hospitality Trust’s initial portfolio has a total appraised value of US$719.5 million comprising 38 upscale select-service hotels totalling 4,950 rooms geographically diversified across 21 states in the US.
As at Dec 31 2018, 27 of the hotels in the initial portfolio are franchised under the Hyatt Place brand while the remaining 11 are franchised under the Hyatt House brand.
The initial portfolio is professionally managed by Aimbridge Hospitality, LLC, the largest independent hotel management company in the US.
In FY18, the initial portfolio reported an occupancy rate of 77%, compared to the national average of 66%. Its Revenue per Available Room (RevPAR) was US$94 in FY18 compared to the national average of US$868.
The sponsor, ARA Real Estate Investors 23, is an indirect wholly-owned subsidiary of ARA Asset Management (ARA), the premier global integrated real assets fund manager headquartered in Singapore. The gross assets under management by the ARA group and its associates is $80.1 billion and spans over 100 cities in 23 countries.
Concurrently, but separate from the offering, ARA US Hospitality Trust has also secured commitments of US$116.5 million from six cornerstone investors including Gordon Tang; Bank of Singapore; DBS Bank.; Credit Suisse AG; United Overseas Bank and ICH Capital.
The cornerstone investors have subscribed for an aggregate of 132.4 million stapled securities, representing 23.4% of the total number of stapled securities in issue immediately after completion of the offering and the redemption.
See also: Another US hospitality REIT lodges its prelim prospectus
