Ascendas Hospitality Trust

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Ascendas Hospitality Trust to launch S'pore IPO worth at least US$770m
By Janice Wu | Posted: 09 July 2012 2208 hrs

SINGAPORE: Singapore is set to see the launch of its largest initial public offering (IPO) for the year, with Ascendas Hospitality Trust lodging its preliminary prospectus with the Monetary Authority of Singapore (MAS) to list on the SGX Mainboard.

The trust, which comprises a real estate investment trust and a business trust, plans to sell between 506 million and 530 million stapled securities in its IPO to raise between S$770 million about S$823 million. The trust seeks to price the IPO at between S$0.88 and S$0.94.

According to the preliminary prospectus, it has secured three cornerstone investors, one of which is hospitality chain Accor Asia Pacific.

Based on the minimum offering price, Accor has agreed to take up S$50 million worth of stapled securities.

The other two investors are Splendid Asia Macro Fund and Lianhe Investments Pte Ltd.

Ascendas Hospitality Trust has been forecast to yield between 7.4 per cent to 7.8 per cent in 2013 and 7.7 per cent to 8.0 per cent in 2014.

The trust will have an initial portfolio of 11 hotels located in major cities in Australia, China, Japan and South Korea.

Singapore business space developer Ascendas Group is the sponsor for the IPO.

- CNA/wm

The south korea property has been taken out, and Ascendas is now left with 10 hotels.

For a track record of Ascendas,

Ascendas REIT IPO 88cts in 2002, now $2.21
Ascendas India Trust IPO $1.18 in 2007, now $0.79

I just wonder base on what, they have so high of forecast of 2014?

(21-07-2012, 08:04 AM)freedom Wrote: I just wonder base on what, they have so high of forecast of 2014?

Forecast Period 2013 is for 27-Jul-12 to 31-Mar-13, ~8mths. The figures looks ok when projected to Projection Year 2014 for 1 full year.

Ibis Beijing Sanyuan is expected to be acquired only after IPO, so contributions for FY14 is projected to be a lot more than FY13.

I only did a quick look. You see something not right in the breakdown on Pg 52/53 of IPO Prospectus?

thanks KopiKat. did not know FY13 only 8 months.

Noticed under risk factors that there are potential issues with regard to the land use rights of the prc hotels. Is anyone familiar with such issues and it's likelihood of turning into a real problem?

(21-07-2012, 09:05 AM)KopiKat Wrote:

(21-07-2012, 08:04 AM)freedom Wrote: I just wonder base on what, they have so high of forecast of 2014?

Forecast Period 2013 is for 27-Jul-12 to 31-Mar-13, ~8mths. The figures looks ok when projected to Projection Year 2014 for 1 full year.

Ibis Beijing Sanyuan is expected to be acquired only after IPO, so contributions for FY14 is projected to be a lot more than FY13.

I only did a quick look. You see something not right in the breakdown on Pg 52/53 of IPO Prospectus?

hi kopikat, i find the revenue contribution from the china hotels very low, is that what you feel too?

(23-07-2012, 10:21 AM)money Wrote:

(21-07-2012, 09:05 AM)KopiKat Wrote:

(21-07-2012, 08:04 AM)freedom Wrote: I just wonder base on what, they have so high of forecast of 2014?

Forecast Period 2013 is for 27-Jul-12 to 31-Mar-13, ~8mths. The figures looks ok when projected to Projection Year 2014 for 1 full year.

Ibis Beijing Sanyuan is expected to be acquired only after IPO, so contributions for FY14 is projected to be a lot more than FY13.

I only did a quick look. You see something not right in the breakdown on Pg 52/53 of IPO Prospectus?

hi kopikat, i find the revenue contribution from the china hotels very low, is that what you feel too?

I was looking at Net Property Income (pg 53) and divided by Purchase Price / Appraised Price (Australia hotels) (pg 11-14) for each hotel and Novotel Beijing Sanyuan and Ariake Sunroute were the lowest at 5%+. I didn't check further (maybe later) but may be due to other factors like lower occupancy rate (potential to increase), AEI, interest rate (for borrowings),... The rest gives 7.81% (Ibis Beijing Sanyuan) and average 8%+ for the Aussie ones.

For Australia Hotels, I used Appraised Price as the Purchase Price may not be suitable (the whole deal come with debts).

In the end, I gave it a miss. Better to stick to my personal criteria for REITs strictly, one of which is not to pay above it's NAV.

(24-07-2012, 12:53 PM)momoeagle Wrote: In the end, I gave it a miss. Better to stick to my personal criteria for REITs strictly, one of which is not to pay above it's NAV.

I decided to give it a try. Always been a sucker for Yield..
At most, if successful, I doubt I'll get more than 5 lots (total <$5k), just about enough to keep me interested to monitor this stock.

The NAV is just a valuation figure. I bet you in the coming quarters, they can easily 'improve' on that figure by doing AEIs + Improving Occupancy Rate. Yes, I also don't like to pay a premium to NAV but for now, I think I can live with a 8.15% premium, especially since the closest comparable, CDL H-Trust (has higher class hotels + mostly in Singapore ie. lower FOREX risk) is going for 25% premium to NAV..