News Summary
Frasers Property is making another attempt to privatize its hospitality REIT, Frasers Hospitality Trust, with a proposed transaction valued at S$1.37 billion. The company aims to buy the outstanding shares it does not own for S$0.71 each, an increase from a previous failed bid. Given the ongoing challenges in the hospitality market, analysts believe this renewed offer may gain more traction among shareholders, positioning Frasers to navigate a changing economic landscape and maximize asset potential.
Singapore – Frasers Property, a prominent real estate company based in Singapore, is making a renewed effort to privatize its hospitality real estate investment trust (REIT), Frasers Hospitality Trust. The proposed transaction is valued at approximately S$1.37 billion, which translates to around $1.1 billion. This second bid comes with an offer of S$0.71 per share for the outstanding shares that Frasers does not currently own.
The company already holds over 60% of Frasers Hospitality Trust’s shares, positioning it well to proceed with this buyout. The renewed bid follows a previous attempt in 2022, which ultimately failed to gain the necessary shareholder support due to a lower offer price of S$0.70 per share. Analysts suggest that the current offer may stand a better chance of approval given its enhanced price amid a prevailing softening outlook for the hospitality sector, combined with the REIT’s manageable asset size.
Recent trends indicate that the hospitality market is experiencing challenges, which may be influencing shareholder sentiment in favor of Frasers’ offer. As the economic landscape evolves, property owners and investors are reevaluating asset values and potential returns on investment.
Related Developments in the Hospitality Sector
While Frasers Property navigates its privatization efforts, other notable activities are ongoing in the hospitality sector. In the U.S., Innisfree Hotels and RREAF Holdings secured $23.6 million for refinancing the Holiday Inn Resort located in Surfside Beach, South Carolina. This financing, arranged by Cronheim Hotel Capital, will support capital returns for improvements initiated post-acquisition. Innisfree and RREAF previously converted the property from an independent hotel into a Holiday Inn Resort in late 2023.
Meanwhile, American Liberty Hospitality has embarked on a new project in Texas, developing a dual-branded hotel featuring Fairfield by Marriott and TownePlace Suites by Marriott. This property will be part of a sprawling 75-acre mixed-use project, with ground-breaking expected later this year and completion targeted for early 2027.
In Connecticut, Waterford Hotel Group is set to operate two new venues: a 131-key Courtyard Atlanta in Norcross Peachtree Corners and a 216-key Embassy Suites hotel in Cleveland Beachwood. Other projects include Great Lakes Capital’s development of a full-service Marriott hotel and convention center in Cedar Park, Texas, featuring 297 rooms along with 30,000 square feet of event space, expected to wrap up by the first quarter of 2027.
International Hotel Expansion
On a global scale, Gulph Creek Hotels has taken over management of the Home2 Suites by Hilton in Middletown, New York, while Hilton is making strides in Vietnam. The hotel chain has launched the first four properties out of a planned 14 for its Tru by Hilton brand in collaboration with ROX Group, aspiring to grow its portfolio to 29 projects in Vietnam by 2025.
Additionally, Marriott International is teaming up with Miyar Alshati Real Estate Co., Telal Al Wadi Real Estate Co., and Saud Al Arifi Investment Group for the establishment of a St Regis hotel in Jeddah, Saudi Arabia, slated to open in 2030 along with 92 branded residences. In Laos, RJJ Hotels has signed its inaugural hotel management agreement with Sanher Investment & Development to operate a property under Jin Jiang Hotels’ Metropolo brand, with a target of 181 agreements across Southeast Asia over the next five years.
Lastly, Vivenio, based in Madrid, is enhancing its operational strategies by integrating the Lavanda proptech platform, aimed at refining its flexible rental strategy across an expansive portfolio of more than 6,400 homes in Spain.
As the global hospitality market continues to navigate fluctuations and challenges, Frasers Property’s efforts to privatize its REIT indicate a strategic response to current market conditions, potentially setting the tone for future investments in the sector.
Deeper Dive: News & Info About This Topic
- WSJ: Frasers Property Mulls Privatization of Hospitality REIT
- Wikipedia: Hospitality
- Bloomberg: Frasers Property Posts Higher Profit
- Google Search: Frasers Property privatization
- Fortune: Frasers Property Earnings Update
- Google Scholar: Frasers Property
- Reuters: Frasers Property to Take REIT Private
- Encyclopedia Britannica: Real Estate
- MSN: Frasers Property to Take REIT Private
- Google News: Frasers Property
