News Summary
Frasers Property, a Singapore-based real estate company, has proposed a S$1.37 billion buyout of Frasers Hospitality Trust, seeking to take the REIT private. This second attempt follows an unsuccessful bid in 2022 and aims to appeal to shareholders amidst changing market conditions. Analysts suggest that the deal may be more attractive now due to the smaller asset size of the hospitality trust and the current economic climate affecting the hospitality sector.
Singapore
Frasers Property, a prominent real estate company based in Singapore, is attempting its second buyout of Frasers Hospitality Trust, a real estate investment trust (REIT) focusing on the hospitality sector. The acquisition deal is valued at S$1.37 billion (approximately $1.1 billion) and aims to take the REIT private, as Frasers Property currently owns over 60% of the shares in the hospitality trust.
Under the terms of the new offer, Frasers Property has proposed to buy the remaining shares it does not already own at a price of S$0.71 each. This offer comes after a failed attempt in 2022 when the company proposed S$0.70 per share but did not receive enough support from shareholders to move forward with the buyout.
The current bid is seen as more enticing to shareholders due to changing conditions in the hospitality market, which has been experiencing a downturn. Analysts suggest that the smaller asset size of Frasers Hospitality Trust may also contribute to making the buyout more appealing this time around, potentially facilitating a smoother approval process.
Broader Industry Context
The hospitality sector has faced challenges recently, with economic fluctuations impacting travel and accommodation trends. As a result, many firms are reassessing their operations and strategies. Frasers Property’s efforts to privatize its hospitality arm signal a strategic pivot, aiming to consolidate operations and streamline management in response to market conditions.
In a related sector activity, Innisfree Hotels and RREAF Holdings secured $23.6 million to refinance the Holiday Inn Resort located in Surfside Beach, South Carolina. The financing was arranged by Cronheim Hotel Capital, which helped the partners capitalize on improvements made since they acquired the property in late 2023.
Additionally, American Liberty Hospitality is advancing its plans to develop a dual-branded hotel in Bastrop, Texas. This project will feature both Fairfield by Marriott and TownePlace Suites by Marriott within a 75-acre mixed-use development, with construction expected to commence later this year and operations projected to start by early 2027.
New Developments and Management Changes
Further developments in the hospitality industry include the Waterford Hotel Group, which will operate two new hotels: a 131-key Courtyard Atlanta Norcross Peachtree Corners in Georgia, and a 216-key Embassy Suites Cleveland Beachwood in Ohio.
On the construction front, Great Lakes Capital, along with partners Nebraska Furniture Mart and Cedar Park, Texas, has broken ground on a full-service Marriott hotel and convention center. This project will include 297 guest rooms and a spacious 30,000 square feet of event space.
In the New York area, Gulph Creek Hotels has taken over management of the 95-key Home2 Suites by Hilton in Middletown, marking its second property in that market.
On an international scale, Hilton has opened the first four of 14 planned Tru by Hilton properties in Vietnam, contributing to a total of 29 hotels under development in the region. Moreover, Marriott International is collaborating with Miyar Alshati Real Estate and other stakeholders to launch a 191-key St. Regis hotel in Jeddah, Saudi Arabia, along with 92 branded residences anticipated to launch in 2030.
RJJ Hotels has also made strides with its first hotel management agreement in Luang Prabang, Laos, under the Metropolo brand, with an ambitious goal of managing five brands across Southeast Asia in the next five years.
In Spain, Vivenio, a Madrid-based REIT, has adopted the Lavanda proptech platform to enhance its flexible rental strategy, impacting a portfolio of over 6,400 homes across the country. The adoption of technology in property management reflects a growing trend within the industry to leverage innovation for operational efficiency.
As Frasers Property moves forward with its strategic initiatives, the industry will be closely watching how these developments unfold amidst the ongoing shifts in the hospitality market.
Deeper Dive: News & Info About This Topic
- Wall Street Journal
- Wikipedia: Real estate in Singapore
- Bloomberg
- Google Search: Frasers Property
- Fortune
- Encyclopedia Britannica: Hospitality industry
- Reuters
- Google News: Frasers Hospitality
- Frasers Property Press Release
- Google Scholar: Frasers Property
