10 Key Things To Know About Frasers Hospitality Trust

Frasers Hospitality Trust (Frasers H-Trust) is an SGX-listed stapled group that invests specifically in hospitality based properties. Frasers H-Trust was listed on 14 July 2014 with an initial portfolio of 12 properties worth S$ 1.67 billion. Since then, it has grown its portfolio to 15 properties worth S$ 2.44 billion as at 30 September 2017.

In this article, I’ll list down 10 quick things you need to know about Frasers H-Trust before you invest.

Stock Symbol

Ticker Symbol: SGX: ACV
Market Capitalization: S$ 1.49 Billion (18 January 2018)

Share Price: S$ 0.81 (18 January 2018)

Industry: Reit

The Business

The properties owned by Frasers H-Trust are located in:

1. Singapore
   Frasers H-Trust has two properties in Singapore. They are:
   1. InterContinental Singapore
   2. Fraser Suite Singapore

Combined, they were valued at S$ 840 million, accounting for 34.4% of the value of its portfolio. In 2017, this segment has contributed S$ 31.0 million and $ 25.6 million in revenue and net property income to Frasers H-Trust.

1. Australia
   Frasers H-Trust has four properties in Australia. They are:
   1. Novotel Rockford Darling Harbour, Sydney
   2. Fraser Suites Sydney
   3. Sofitel Sydney Wentworth (Acquired in May 2015)
   4. Novotel Melbourne on Collins (Acquired in October 2016)

Combined, they were valued at S$ 843 million, accounting for 34.5% of the value of its portfolio. In 2017, this segment has contributed S$ 72.6 million and S$ 48.6 million in revenue and net property income to Frasers H-Trust.

1. United Kingdom
   Frasers H-Trust has six properties in the United Kingdom. They are:
   1. Best Western Cromwell London
   2. Park International London
   3. Fraser Place Canary Wharf London
   4. Fraser Suites Queens Gate London
   5. Fraser Suites Edinburgh
   6. Fraser Suites Glasgow

Combined, they were valued at S$ 331 million, accounting for 13.6% of the value of its portfolio. In 2017, the segment has contributed S$ 23.4 million and S$ 18.1 million in revenue and net property income to Frasers H-Trust.

1. Japan
   Frasers H-Trust owns the ANA Crowne Plaza Kobe. It was valued at S$ 189 million, accounting for 7.8% of the value of its portfolio. The property has contributed S$ 16.9 million and S$ 13.8 million in sales and net property income to Frasers H-Trust in 2017.
   
   
2. Malaysia
   Frasers H-Trust owns the Westin Kuala Lumpur. It was valued at S$ 138 million, accounting for 5.7% of the value of its portfolio. In 2017, the Westin has contributed S$ 8.4 million and S$ 7.0 million in sales and net property income to Frasers H-Trust.
3. Germany
   Frasers H-Trust has acquired the Maritim Hotel Dresden, Germany in June 2016. It was valued at S$ 98.2 million, accounting for 4.0% of the value of its portfolio. In 2017, the property has made $ 6.4 million and S$ 6.4 million in revenue and net property income to Frasers H-Trust.
   

#3: The Financials

Since its IPO listing, Frasers H-Trust has acquired the following properties:

No.	Property	Time	Costs
1	Sofitel Sydney Wentworth	May 2015	A$ 224 mil
2	Maritim Hotel Dresden	Jun 2016	Euro 58.4 mil
3	Novotel Melbourne on Collins	Oct 2016	A$ 237 mil

These acquisitions had contributed to higher sales and net property income to Frasers H-Trust. Quarterly sales had increased from the S$ 20 – 25 million levels in 2015 to hitting above S$ 40 million in Q4 2017. Since June 2016, the trust has gradually increased its quarterly distributable income from S$ 18.4 million to S$ 23.8 million in Q4 2017. In 2017, Frasers H-Trust has distributed 5.05 cents to its unitholders.

 

Source: Annual Reports of Frasers H-Trust

Source: Annual Reports of Frasers H-Trust

#4: Major Acquisitions

There is no major acquisitions or disposal of investment properties made by Frasers H-Trust.

#5: Sponsor Strength

Frasers Centrepoint Ltd is the sponsor of Frasers H-Trust. TCC Group is the strategic partner of Frasers H-Trust. Presently, Frasers H-Trust has access to acquire the following properties from both its sponsor and strategic partner:

1. Asia
   1. Capri by Fraser, Changi City, Singapore
   2. Fraser Place Robertson Walk, Singapore
   3. Fraser Place Manila, Philippines
   4. Fraser Residence Sudirman Jakarta, Indonesia
   5. Le Meridien Angkor, Siem Reap, Cambodia
   6. Crowne Plaza Hotel, Kunming, China
   7. Holiday Inn Hotel, Kunming, China
   8. Fraser Suites Beijing, China
2. Australia
   1. InterContinental, Adelaide, Australia
   2. Hyatt Hotel Canberra, Australia
   3. Fraser Place Melbourne, Australia
   4. Capri by Fraser, Brisbane, Australia
   5. Fraser Suites Perth, Australia
3. Europe
   1. Fraser Suites Kensington, London, the United Kingdom
   2. Capri by Fraser, Frankfurt
   3. Capri by Fraser, Barcelona
      
      
4. United States of America
   1. Plaza Athenee, New York

#6: Lease Profile

As at 30 September 2017, the weighted average lease expiry of all properties under Frasers H-Trust is 16.3 years. This is computed excluding the master lease for Novotel Melbourne on Collins as the master lease agreement is an internal agreement between Frasers Hospitality REIT (FH-REIT) and Frasers Hospitality Business Trust (FH-BT). As I write, none of the 15 master leases would be maturing in the next 5 years.

#7: Valuation

As I write, Frasers H-Trust is trading at S$ 0.805 a unit.

As at 30 September 2017, Frasers H-Trust has reported having S$ 0.816 in net asset value a unit. Thus, its current P/NAV works out to be 0.99.

Frasers H-Trust adopts a distribution policy to declare and pays out at least 90% of its distributable income on a quarterly basis. The trust has declared and paid 5.05 cents in DPU is 2017. If Frasers H-Trust is able to maintain its DPU at 5.05 cents over the next 12 months, its expected gross dividend yield is 6.27%.

#8: Debt Profile

As at 30 September 2017, Frasers H-Trust has S$ 810.9 million in borrowings. Its gearing ratio is 32.1%. The effective cost of borrowings is 2.6% a year and its weighted average debt maturity stands at 2.07 years.

#9: Investor Relations

For further enquiries or to request for additional investment information on Frasers H-Trust’s Investors Relation matters, you may contact:

Sandy Leng

Head, Investor Relations

Telephone: +65 6349 0423

Email: ir@frasershospitality.com

#10: Major Shareholders

As at 29 November 2017, the substantial shareholders of Frasers H-Trust are:

– FCL Investments Pte Ltd: 21.58%

– TCC Group Investments Limited: 38.00%

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