In its filing with the SGX yesterday, FCL said it had not decided whether to proceed with listing the REIT, which would hold assets including hotels and serviced residences owned by the company and its majority shareholder, Thailand’s TCC Group, also controlled by Mr Charoen. The potential size of the initial public offering and other deal terms also have not been finalised, FCL said.
Sources with direct knowledge of the matter said the IPO is likely to raise S$500 million to S$600 million and take place in the second quarter.
The listing would mark the first step towards the merging of the property assets of Mr Charoen’s business empire, operating under FCL and TCC Group, after the tycoon won control of drinks-and-property conglomerate Fraser and Neave (F&N) in a S$14 billion deal last year.
FCL has since split from F&N into a separately listed property company, with the latter returning S$4.7 billion to shareholders as part of a capital reduction last year. If dividends are included, Mr Charoen’s deal to take over F&N is profitable, especially after the split, which now reflects a better market value of its Singapore property business, one of the sources said.
FCL, which was listed on the SGX last month, has a portfolio of residential, commercial and hospitality properties worth more than S$10 billion. Its Frasers Hospitality arm owns serviced residences in Singapore, Europe, North Asia, South-east Asia, the Middle East and Australia, offering about 8,000 apartments in more than 30 cities, according to its website.
Singapore's Frasers Centrepoint Plans REIT Listing By P.R. VENKAT May 11, 2014 8:32 p.m. ET
SINGAPORE— Frasers Centrepoint Ltd. TQ5.SG +0.28% , a Singapore-based property company controlled by Thai billionaire Charoen Sirivadhanabhakdi, said Monday that it will seek approval from its shareholders later this month for an initial public offering of some of its local and overseas serviced residences and hotel properties.
Frasers Centrepoint, which is already listed on the Singapore Exchange, S68.SG 0.00% said that it will seek approval from the shareholders at the extraordinary general meeting on May 28. The statement from the company, however, didn't detail how much it intends to raise from the offering or the timing of the IPO. The listing will be in the form of a real estate investment trust, or REIT, that will initially hold six serviced residences and six hotel properties located in Singapore, Australia, the U.K, Japan and Malaysia.
People with knowledge of the deal have said earlier that the REIT IPO could raise as much as US$500 million and that the Mr. Chaoren's company may aim for a listing either late in the second quarter or early in the third quarter.
Mr. Chaoren's Frasers Centrepoint is the latest company to tap the REIT market in trust-heavy Singapore, which has been dominated by such listings. But in recent months, REIT offerings haven't done well as the U.S. Federal Reserve has begun to wind down its monetary stimulus program. Amid historically low interest rates, investors had flocked to Singapore IPOs of REITs and business trusts for their higher yields. But Fed policy is lifting rates in the U.S. and elsewhere, and leading many investors to demand lower prices on those assets.
SINGAPORE-- Frasers Centrepoint Ltd., a Singapore-based property company controlled by Thai billionaire Charoen Sirivadhanabhakdi, said Monday that it will seek approval from its shareholders later this month for an initial public offering of some of its residences and hotel interests, in the first trust listing in the city-state in five months.
Frasers Centrepoint, which is already listed on the Singapore Exchange, said that it will ask shareholders at an extraordinary general meeting on May 28 for approval to carve out its local and overseas serviced apartments and hotels. The statement from the company, however, didn't detail how much it intends to raise from the offering or the timing of the IPO. The listing will be in the form of a real-estate investment trust, or REIT, that will initially hold six serviced residences and six hotel properties located in Singapore, Australia, the U.K, Japan and Malaysia.
People with knowledge of the deal have said earlier that the REIT IPO could raise as much as US$500 million and that the Mr. Charoen's company may aim for a listing either late in the second quarter or early in the third quarter.
This would be the first REIT listing in Singapore since January, when property developer OUE Commercial REIT raised nearly US$300 million in an IPO of its shopping mall and office properties. The move also comes as the U.S. Federal Reserve winds down its monetary stimulus program, reducing the allure of trust listings. Fewer companies have been tapping trust-heavy Singapore for an IPO, with historically low interest rates that drove foreign investors to look for higher returns from trust listings a declining prospect. Recent trust candidates have been hit as investors demanded lower prices.
Earlier this month, South Korea's Lotte Shopping Co. said that it had postponed a Singapore REIT IPO of some of its shopping-mall assets, in a deal that could have raised as much as US$1 billion. The company cited volatile market conditions for the delay, and people familiar with the IPO said that investors were seeking a higher yield compared with what Lotte Shopping was willing to pay. Singapore Exchange, home to nearly 50 trusts with a combined market capitalization of about US$65 billion, dominated Asia's market for trust listings last year. REITs now offer yields close to 7%, higher than the 6% to 6.5% given in previous years.
Still, there are about US$2 billion of REIT IPOs in the Singapore pipeline. Singapore conglomerate Keppel Corp. is looking to list its data centers in a near US$500 million flotation. And Indian conglomerate Larsen & Toubro is aiming to list some of its India toll-road assets through a trust listing in the city-state that could raise as much as US$800 million, people with knowledge of these deals said.
According to Dealogic data, companies have so far this year raised US$707 million in Singapore compared with US$1.8 billion raised in the same period last year. In 2013, Singapore attracted a total of US$5.2 billion in IPOs of which 90% were in the form of trusts. However, the Singapore FTSE Straits Times Index is up 2.5% year to date and the FTSE REIT Index is up 5.8% for the same period, an indication that some trusts could find investors if yield is attractive.
Frasers Centrepoint has a portfolio of residential, commercial and hospitality properties valued at more than 10 billion Singapore dollars (US$7.9 billion). It was listed on SGX in January after being split from Singapore-listed conglomerate Fraser & Neave Ltd., which Mr. Charoen bought last year valuing the conglomerate at nearly US$11 billion. The serviced residences and hotel properties that would form the initial portfolio of the hospitality REIT include--Frasers Suites Singapore, Frasers Suites Sydney, Park International London, ANA Crowne Plaza Kobe in Japan and Intercontinental hotel in Singapore.
Frasers Enters Australand Battle With A$2.6 Billion Offer By Nichola Saminather and Pooja Thakur Jun 4, 2014 5:39 PM GMT+0800
Frasers Centrepoint Ltd. (FCL) offered to buy Australian developer Australand Property Group (ALZ) for A$2.6 billion ($2.4 billion) in the Singapore real-estate company’s biggest proposed acquisition, trumping a bid by Stockland.
Frasers offered A$4.48 per share, Sydney-based Australand said today in a regulatory filing, compared with Stockland’s A$4.43 all-share bid. Shares of Australand, whose board said it intends to recommend the offer in the absence of a superior proposal, posted their biggest gain since December 2012 in Sydney. Frasers shares had the biggest drop in four months in Singapore.
The acquisition would give Frasers control of Australand’s A$2.4 billion of office and industrial properties and A$9.3 billion of developments in Australia, where the Singapore company is already building the 2,000-apartment Central Park project in downtown Sydney. Frasers is seeking to boost its operations in faster-growing overseas markets, which contributed 38 percent of earnings as of March 31 from 10 percent a year earlier, and has flagged Australia and China as preferred destinations.
“Australia is a market that Frasers understands well,” said Goh Han Peng, a Singapore-based analyst at DMG & Partners Securities Pte.“This bid helps them diversify further out of the challenging Singapore market.”
Australand rose 5.6 percent to A$4.55 at the close of trading in Sydney. Frasers shares declined 3.9 percent to S$1.85, the biggest drop since Feb. 4. Home Prices
Private home prices in Singapore dropped by the most in almost five years in the first quarter following a campaign that started in 2009 to curb property speculation. Dwelling prices in Australia’s biggest cities rose 10.7 percent in May from a year earlier, according to the RP Data-Rismark Home Value index.
CapitaLand Ltd. (CAPL), formerly Australand’s biggest shareholder, sold its 39 percent stake in the company in March.
Australand was a financial investment for CapitaLand, which shifted its focus to Singapore and China after Chief Executive Officer Lim Ming Yan took over in January 2013, DMG’s Goh said. Australia is one of Frasers’s core markets, so an expansion is logical, he said. Stockland Offer
Stockland bought 19.9 percent of the Sydney-based company on CapitaLand’s exit, and followed that with an all-share bid equivalent to A$4.20 a share, which Australand rejected on April 23. It returned with a sweetened bid that equated to A$4.35 a share on May 28 and A$4.43 based on yesterday’s closing price, gaining access to Australand’s books.
Australand revoked that access today, saying it has granted Frasers a four-week period of exclusivity. Under Frasers’s offer, Australand shareholders would retain their expected first-half dividend of 12.75 Australian cents per share, the Sydney-based company said. They would also receive an additional payout equal to the same amount pro-rated from July 1 until the offer becomes unconditional, it said.
“The board concluded that the conditional proposal would deliver a compelling value outcome for Australand securityholders and is superior to the final and conditional proposal received from Stockland (SGP),” Australand Chairman Paul Isherwood said in the statement. Biggest Bid
Frasers’s offer is subject to approval by Australia’s Foreign Investment Review Board, and the backing of Frasers shareholders.
Stockland will consider its options and provide an update in due course, it said separately today.
Frasers’s offer “is a very full price so it’s a great outcome for Australand shareholders, but I would be surprised if Frasers gets much additional value out of it,” said Tony Sherlock, Sydney-based head of property research at Morningstar Australasia Pty. “In the context of Stockland, I would be very surprised if they kept raising, as they’d have to go a fair bit higher than their current offer to trump this.”
The bid is the biggest for Frasers Centrepoint, according to data compiled by Bloomberg, since it was spun off from Fraser & Neave Ltd. and began trading independently in January. The company, whose businesses include residential development, commercial property management and a hospitality unit, is seeking to expand in Australia and China as Singapore’s housing market slows, Lim Ee Seng, chief executive officer of Frasers Centrepoint, said in a May 9 statement.
“The proposal will catapult Frasers Centrepoint to being one of Australia’s leading real estate companies with a portfolio of scale and quality,” Lim said in a separate statement today. “We already have an established platform and good brand recognition in Australia, but real estate is a business where scale and depth matters.” GPT Offer
Australand’s board in December 2012 rejected a bid by GPT Group, Australia’s second-biggest property trust, to acquire Australand’s industrial and commercial property divisions. GPT dropped its pursuit in May last year after failing to agree on a price that would compensate Australand shareholders for being left with a standalone residential property developer.
Australand shares are up 18 percent this year, and 7.6 percent since Stockland’s sweetened bid on May 28. Frasers’s shares have gained 25 percent since they began trading Jan. 9.