Tag Archive | "Far East Hospitality Trust"

Retail Tranche results of Far East H-trust is out

FAR East Hospitality Trust’s (Far East H-Trust) retail tranche of 50 million stapled securities was 14.6 times subscribed at the close of its initial public offering yesterday.

The first and only Singapore-focused hotel and serviced residence hospitality trust, which priced sale of its stapled securities at $0.93 apiece, said it had received applications for a total of 732.3 million stapled securities.

The 11.8 million stapled securities reserved for subscription by the directors, management, and employees of the sponsor and the Reit manager were also fully subscribed.

Including a placement tranche of 267.6 million stapled securities – which was approximately 30 times subscribed – the total demand of some 8.8 billion stapled securities under the placement tranche and the public offer (excluding the reserved stapled securities) is about 27.6 times the 317.6 million stapled securities available for subscription (excluding the reserved stapled securities and assuming the over-allotment option is not exercised), or approximately $8.2 billion.

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Singapore 2012 biggest IPO: Far East Hospitality Trust

RIDING on the hospitality sector’s robust growth, Far East Organization is set to offer investors a bite off its assets via the group’s first hospitality trust listing – Far East Hospitality Trust (Far East H-Trust).

The listing of the hospitality stapled group, which comprises both Far East H-Reit and Far East H-BT, is expected to raise some $656 million (excluding an over-allotment option of about $60 million).

Notably, each stapled security will be priced in the range of 86 cents to 93 cents, translating to a forecast yield of around 6 per cent to 6.5 per cent.

And despite its size, Far East H-Trust, which is said to be Singapore’s largest deal over a 12-month period, seems to have garnered strong interest bagging numerous cornerstone investors including names such as Aberdeen Asset Management Asia Limited, AIA Group Limited, JF Asset Management Limited and NTUC Income Co-operative Limited

Unlike Ascendas Hospitality Trust, this offering will comprise purely properties in Singapore. Far East is the largest developer in Singapore, with many serviced residences, meaning that the trust has a large pipeline of assets that could potentially be injected later and it should not face the problem of exhausting its sponsor portfolio.

Ascendas’ trust has struggled to stay above the IPO price of S$0.88 since listing on July 27. One week after listing, stabilising manager Nomura had used 9.65m of the 73.4m greenshoe shares to support the price.

Cornerstone investors will take up 376.3m shares, around half of Far East’s offering, equal to a 23.5% stake in the trust. The 10 cornerstones include Aberdeen, AIA, Lion Global, Jardine Fleming, NTUC and are subject to a 180-day lock-up.

The trust is essentially a REIT, but like its largest peer CDL Hospitality Trust, will comprise stapled securities of the REIT and its management company.

Bookbuilding will run from August 6–14, with pricing and registration on August 16.

Company’s balance sheet has been leveraged efficiently and it has been able to improve its profit performance from 7.42% in 2008 to whopping 34.21% in FY11 which is quite remarkable considering the challenging environment across the world. Company also paid a dividend of 9% to it’s share holders in FY11

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