Frasers Centrepoint looks to raise $365 mil from Singapore hospitality trust IPO

Singapore real estate company Frasers Centrepoint (FCL) , backed by Thai billionaire Charoen Sirivadhanabhakdi, plans to raise $365 million by listing its hospitality real estate investment trust (REIT) in Singapore, IFR reported.

The listing would mark the first step in merging the property assets of Charoen’s business empire, which includes Singapore-listed FCL and his TCC Group, after the Thai tycoon won control of the drinks-and-property conglomerate Fraser and Neave in an US$11 billion deal last year.

FHT comprises six serviced residences controlled by FCL and six hotels, such as Singapore’s InterContinental Hotel. The REIT is looking to sell 415 million units at a fixed price of $0.88 a unit, IFR reported.

Six ‘cornerstone’ investors including Fortress Capital and DBS Private bank, a unit of DBS Group Holdings , will buy $205 million worth of units, IFR reported.

The presence of cornerstone institutions who have committed to take part in initial public offerings is designed to encourage other investors to join in. REITS and business trusts have seen robust demand from high net-worth individuals and institutions hungry for strong dividends.

Singapore has emerged as a popular listing venue for REITs. In January, Singapore property firm Overseas Union Enterprise raised US$272 million through the listing of a commercial real estate investment trust.

However 2014 has been a relatively slow year for new listings in Singapore. In the period up to June 20, proceeds from Singapore IPOs tumbled nearly three-quarters to US$773.6 million compared with the same period a year earlier, according to Thomson Reuters data. An external spokeswoman for Frasers Centrepoint declined to comment. DBS , Morgan Stanley, Standard Chartered and United Overseas Bank are the main advisers on the deal, IFR reported.