Another Singapore REIT bites the bullet.
Actually, I’m surprised the privatization offer is quite fair at 70 cents per unit.
Not that cheap. Not that expensive.
I’ll explain. Let’s dive in.
Background on Frasers Hospitality Trust (FHT)
FHT IPO-ed in 2014 with 12 properties across Singapore, Malaysia, Australia and the UK. These are high-quality properties leased to some of the most well-known global hotel operators, including InterContinental and Marriott. Today, FHT has 14 properties.
These hoteliers get into a long-term master lease arrangement with FHT.
For instance, both InterContinental Singapore and Novotel Darling Harbour 20 + 20 lease agreement — lease for 20 years with an option to renew for another 20 years.
FHT was hot stuff. Back then, FHT was 19 times subscribed with a projected 7% distribution yield.
What happened?
The problem, over the last 8 years, was FHT’s lessees were struggling to produce growing income in a highly-intense hospitality industry....
