Frasers Hospitality Trust said to plan 7% yield in Singapore IPO

Frasers Hospitality Trust, backed by Thailand’s richest man, plans to offer a dividend yield of 7% for the 2015 financial year in its Singapore initial public offering, people with knowledge of the matter said.

The trust, which will be backed by six hotels and six serviced residences, is set to start selling units at 88 cents each next week, the people said, asking not to be identified as the process is private. Frasers Hospitality and its owners are seeking $396 million in the IPO, they said.

At 7%, Frasers Hospitality’s yield is higher than Ascott Residence Trust’s 12-month yield of 6.2% and Far East Hospitality Trust’s 6.4 percent. The offering would be only the third IPO of more than US$100 million ($125 million) this year in Singapore, after OUE Commercial REIT and Pacc Offshore Services Holdings.

First-time share sales in Singapore have raised US$694 million this year, down from US$3 billion for the same period a year earlier, according to data compiled by Bloomberg. Angeline Yang, a Singapore-based spokeswoman for Frasers Hospitality who works for Newgate Communications LLP, declined to comment.

The trust will include assets from Thai billionaire Charoen Sirivadhanabhakdi’s closely held TCC Land as well as Frasers Centrepoint, which was spun off from Fraser & Neavein January. Charoen won control of Fraser & Neave last year in a battle with Singapore’s OUE.