Frasers Property (formerly: Frasers Cpt (FCL))

[greengiraffe]

http://infopub.sgx.com/Apps?A=COW_CorpAn...5.4.14.pdf

http://www.hotel-portamarina.com/

http://www.sofitelsydney.com.au/

This is a second hotel foray that FCL made in less than 2 weeks. However, Sydney Sofitel Wentworth is a significant purchase in terms of absolute purchase price. As FCL's forte lies in the service residence market, some may be wondering if they have the core competence in running hotels. The skepticism should be laid to rest as one reviewed the hotel portfolio belonging to parent TCC Land:

http://www.tccland.com/hotel.html

In Australia, TCC Land owns 3 hotels:

i) Sydney - 230 rooms 4.5 stars http://novotelrockforddarlingharbour.com.au/

ii) Adelaide - 367 rooms 5 stars http://www.icadelaide.com.au/

iii) Canberra - 5 stars http://www.canberra.park.hyatt.com/en/ho...hotel.html

Based on a recent article on Herald Sun, FCL is likely to have done their due diligence and its my personal view that the purchase is a prelude to the recycling of capital from the eventual injection of Fraser Suites Perth and Sydney into soon to be listed FHT:

http://www.heraldsun.com.au/travel/austr...6838535913

Record hotel occupancy rates in Sydney and Melbourne set to push room prices higher
JULIAN SWALLOW ESCAPE FEBRUARY 27, 2014 12:00AM
Grab a bed while you can - hotel occupancy rates are at record highs.

HOTEL occupancy rates in Australia’s southeast have hit record highs in a move expected to push room prices higher.

Sydney and Melbourne, in particular, are recording their highest room occupancy rates in more than two decades, with city hotels nearing capacity several nights a week and demand predicted to increase, says Deloitte Access Economics’ latest Tourism and Hotel Market Outlook report.

Overall, Australian hotel demand is set to more than double available supply over the next three years, a situation that will only push room prices higher.

“As the Australian economy transitions from a growth phase underpinned by resource sector construction to a more diversified one, travel patterns are gradually shifting away from the big mining states,” Deloitte Access Economics’ Lachlan Smirl said.

“At the same time, improved conditions for leisure travel — both inbound and domestic — are underwriting robust demand growth across several regions.

“These trends have been mirrored across our hotel markets, with Brisbane and Perth receding from their resource boom highs, and Sydney and Melbourne recording their highest occupancy rates in more than two decades.”

Sydney occupancy rates reached an average 86.5 per cent in 2013, with Melbourne topping 90 per cent during November’s Melbourne Cup Carnival.

Nationally, average occupancy rates reached 66.8 per cent for the year and are expected to climb to 68.9 per cent by the end of 2016 on the back of a 4.3 per cent increase in international visitors.

“It’s been some time since conditions have been this favourable for Australian tourism,” Mr Smirl said.

“There are genuine signs of economic recovery in the US and Europe coupled with sustained strength throughout emerging Asia and a currency that’s fallen from its highs and is expected to depreciate further over coming years.”

This will see a corresponding jump in room prices, with the cost to customers forecast to continue to grow at 3.4 per cent per year to December 2016

However, the situation will vary around the country, Deloitte Access Economics says.

In Sydney, where growth in international visitors is expected to remain robust, room rates are forecast to grow 4 per cent to December 2016, to an average $228.

Despite softening domestic corporate travel, in Perth the residual strength of the mining sector will see room rates grow an average 4.6 per cent, to an average $220.

Canberra, by contrast, is experiencing stagnating demand for short-stay accommodation as the Federal Government tightens its belt, and will see only 2.8 per cent growth to an average $174.

‎Tourism and Transport Forum chief executive Ken Morrison said the results showed “an industry in a growth mode”.

He said more accommodation was being built to cope with demand and that major city hotel prices remained “a lot lower” than their overseas counterparts.

Vested
GG

Now they confirmed Sydney Wentworth acquisition.....

http://infopub.sgx.com/FileOpen/Sofitel_...eID=296496

[greengiraffe]

http://www.deloitte.com/assets/Dcom-Aust...202014.pdf

Extracts From Deloitte Sydney Hotel Outlook Pg 14:

Sydney
The upswing in the Sydney city hotel market that began in the first part of 2013 turned into a surge in the second half of the year, with occupancy rates averaging 86.5% for the year. This growth in occupancy was accompanied by room rate growth of 4.4% for the year to December 2013, with average room rates reaching $203. The combination of rates and occupancy growth pushed RevPAR to grow 6.7% – three times faster than the preceding 12 month period.
The rebound has been led by 14% growth in international visitor nights during the year to September 2013 – growth which was strongest for the leisure segment of the market (VFR and holidaymakers). Collectively, these two account for 36% of nights in paid accommodation in Sydney. While domestic nights continued their decline in 2013, the decline was much slower – around 2.3%, relative to 14.5% in 2012.
Looking forward, the demand outlook for Sydney remains strong. As discussed above, forecast growth in international arrivals remains robust and Sydney is among the most significant beneficiaries of this. While a number of high profile projects are underway in Sydney, the net addition to the city’s room stock remains modest. The three largest developments in Sydney – the Crown development at Barangaroo,
the International Convention Centre hotel (now scaled back to 600 rooms) and the Four Points Sheraton expansion – represent almost 1,200 rooms between them. That said, none of these will come online in 2014 and only 230 rooms, or 1.2% of the current stock, are scheduled to come online over the next 12 months. As a result, Sydney’s occupancy – already the nation’s highest – is likely to push further into record territory, increasing to 88.8% by year end December 2016.
These market dynamics will place further pressure on room rates, which are forecast to grow 4.0% over the three years to December 2016 when they will reach $228. Reflecting the combined strength of room rate and occupancy growth, RevPAR is forecast to grow 4.9% p.a. over the forecast horizon.
Interestingly, Sydney has not experienced the same room rate levels as other destination cities around the world (such as Hong Kong, New York, London, Singapore, Dubai), despite higher occupancies and operating costs. These international comparisons suggest scope for further growth.

http://infopub.sgx.com/Apps?A=COW_CorpAn...5.4.14.pdf

http://www.hotel-portamarina.com/

http://www.sofitelsydney.com.au/

This is a second hotel foray that FCL made in less than 2 weeks. However, Sydney Sofitel Wentworth is a significant purchase in terms of absolute purchase price. As FCL's forte lies in the service residence market, some may be wondering if they have the core competence in running hotels. The skepticism should be laid to rest as one reviewed the hotel portfolio belonging to parent TCC Land:

http://www.tccland.com/hotel.html

In Australia, TCC Land owns 3 hotels:

i) Sydney - 230 rooms 4.5 stars http://novotelrockforddarlingharbour.com.au/

ii) Adelaide - 367 rooms 5 stars http://www.icadelaide.com.au/

iii) Canberra - 5 stars http://www.canberra.park.hyatt.com/en/ho...hotel.html

Based on a recent article on Herald Sun, FCL is likely to have done their due diligence and its my personal view that the purchase is a prelude to the recycling of capital from the eventual injection of Fraser Suites Perth and Sydney into soon to be listed FHT:

http://www.heraldsun.com.au/travel/austr...6838535913

Record hotel occupancy rates in Sydney and Melbourne set to push room prices higher
JULIAN SWALLOW ESCAPE FEBRUARY 27, 2014 12:00AM
Grab a bed while you can - hotel occupancy rates are at record highs.

HOTEL occupancy rates in Australia’s southeast have hit record highs in a move expected to push room prices higher.

Sydney and Melbourne, in particular, are recording their highest room occupancy rates in more than two decades, with city hotels nearing capacity several nights a week and demand predicted to increase, says Deloitte Access Economics’ latest Tourism and Hotel Market Outlook report.

Overall, Australian hotel demand is set to more than double available supply over the next three years, a situation that will only push room prices higher.

“As the Australian economy transitions from a growth phase underpinned by resource sector construction to a more diversified one, travel patterns are gradually shifting away from the big mining states,” Deloitte Access Economics’ Lachlan Smirl said.

“At the same time, improved conditions for leisure travel — both inbound and domestic — are underwriting robust demand growth across several regions.

“These trends have been mirrored across our hotel markets, with Brisbane and Perth receding from their resource boom highs, and Sydney and Melbourne recording their highest occupancy rates in more than two decades.”

Sydney occupancy rates reached an average 86.5 per cent in 2013, with Melbourne topping 90 per cent during November’s Melbourne Cup Carnival.

Nationally, average occupancy rates reached 66.8 per cent for the year and are expected to climb to 68.9 per cent by the end of 2016 on the back of a 4.3 per cent increase in international visitors.

“It’s been some time since conditions have been this favourable for Australian tourism,” Mr Smirl said.

“There are genuine signs of economic recovery in the US and Europe coupled with sustained strength throughout emerging Asia and a currency that’s fallen from its highs and is expected to depreciate further over coming years.”

This will see a corresponding jump in room prices, with the cost to customers forecast to continue to grow at 3.4 per cent per year to December 2016

However, the situation will vary around the country, Deloitte Access Economics says.

In Sydney, where growth in international visitors is expected to remain robust, room rates are forecast to grow 4 per cent to December 2016, to an average $228.

Despite softening domestic corporate travel, in Perth the residual strength of the mining sector will see room rates grow an average 4.6 per cent, to an average $220.

Canberra, by contrast, is experiencing stagnating demand for short-stay accommodation as the Federal Government tightens its belt, and will see only 2.8 per cent growth to an average $174.

‎Tourism and Transport Forum chief executive Ken Morrison said the results showed “an industry in a growth mode”.

He said more accommodation was being built to cope with demand and that major city hotel prices remained “a lot lower” than their overseas counterparts.

Vested
GG

Now they confirmed Sydney Wentworth acquisition.....

http://infopub.sgx.com/FileOpen/Sofitel_...eID=296496

[greengiraffe]

Fraser Sofitel deal to boost plans for trust
BEN WILMOT THE AUSTRALIAN MAY 12, 2014 12:00AM

SINGAPORE’S Frasers Centre­point is pushing ahead with plans for a hotel real estate investment trust after picking up the Sofitel Sydney Wentworth for $202.7 million in a deal finalised over the weekend.

The five-star hotel was sold by fund manager LaSalle Investment Management, which picked up the 436-room property for $130m four years earlier from Tourism Asset Holdings.

The sale was brokered by Sam McVay of McVay Real Estate and Craig Collins of JLL’s Hotels & Hospitality Group. The premium price achieved is expected to be repeated in a number of other Sydney hotel deals, notably as US group Starwood brings its Sheraton on the Park property on Elizabeth Street to market for about $450m through JLL.

Frasers Hospitality owns and operates hotels around the world and already has a local presence with a $252m portfolio, including the Fraser Suites Perth and Sydney and Fraser Place Melbourne, but the group is now buying other properties ahead of the float in Singapore.

Frasers has been bidding for hotels across Asia as it attempts to find high-profile landmark properties to anchor the fund.

Thai billionaire Charoen Siri­vadhanabhakdi won control of Fraser Centrepoint last year.

[greengiraffe]

Charoen is a fantastic planner and always an early bird - egm notice for proposal to set up Fraser Hospitality Trust out this morning. Also aim to double rooms globally over next 5 years following purchase of Sydney Sofitel Wentworth

http://infopub.sgx.com/FileOpen/FCL-Circ...eID=296508

http://infopub.sgx.com/FileOpen/FH_Group...eID=296509

[greengiraffe]

Thai Towkay's accretive contribution to FCL apart from the 6 hotels that is being injected for the establishment of the REIT is allowing FCL full ownership of the Reit manager and trustee-manager of FHT.

The main highlights of the deal to FCL:

- Slight increase in book value of S$7m from S$6.121bn to S$6.129bn
- net earnings raised by S$18m based on last reported accounts - tax efficiency of REIT and likely full fees from REIT ownership of 6 hotels to be injected by TCC Land
- gearing lowered substantially from 40% to 33%.

FCL will end up with 22% of FHT alongside with TCC's more than 40% based on the EGM circular details. Given that TCC and Inter Bev currently controls 87.93% of FCL, TCC and Inter Bev's effective interests in FHT will be at least 57.17% (probably one of the highest amongst listed Singapore H Reit). Charoen's commitment in FHT will remain aligned with minority interests due to the effective controlling interests.

To recap, FCL's short 4 month old track record as a listed company has already seen well planned and executed milestones as follows:

- maiden final dividend shortly after listed that translated into a payout of 50% for FY9/13;
- maiden interim dividend of 2.4 cents (equivalent to 30% payout of attributable earnings before fair value adjustments and one-offs). The interim dividends positioned FCL as a dividend yielder amongst developers with established multi-real estate platforms. HKLand is the only other listed big cap property counter that consistently pays an interim dividend on SGX;
- FCL's ability to recycle matured assets into REITs to enhance the productivity of capital employed. Its proposed sale of 50% stake in Changi City Point to FCT and the upcoming establishment of FHT are important milestones;
- decent discount to book value of $2.17 with substantial locked in presales in Singapore, Australia and China to be progressively booked over the next 3 years.

The next important event for FCL is likely to be Thai Towkay's moves to streamline his holdings of F&N and FCL between TCC and Inter Bev (Thai Bev). Concrete plans to increase free float of FCL and good reception to an intended placement for an established property group with multi-platforms is likely to see FCL included in major indices that will attract more institutional interests especially those passively track indices.

Vested
GG

BT Article - FCL unveils details of new trust
Hospitality trust will have an initial portfolio of six serviced residences and six hotels

BYLYNETTE KHOO
lynkhoo@sph.com.sg @LynetteKhooBT

The setting up of Frasers Hospitality Trust is in line with Frasers Centrepoint Limited's ongoing strategy to optimise capital productivity.

THE hospitality trust to be listed by Frasers Centrepoint Limited (FCL) will have an initial portfolio of six serviced residences and six hotels spanning key cities in Australia, the UK, Japan and Malaysia as well as Singapore.
FCL is expected to raise gross proceeds of at least $651.7 million from the sale of six serviced residences to the new Frasers Hospitality Trust (FHT), which is slated to list in June.
Part of the gross proceeds will come in the form of stapled securities, giving FCL a 22 per cent stake in FHT - a stapled instrument comprising a Reit and a dormant business trust.
The six hotels will be injected by FCL's majority shareholder TCC Group, controlled by Thai billionaire Charoen Sirivadhanabhakdi, chairman of Frasers & Neave.
TCC is expected to own more than 40 per cent of FHT upon listing.
Details of the hospitality trust were unveiled in a circular to FCL shareholders yesterday, when FCL also announced that it had acquired another hotel in Australia for A$202.7 million (S$237.5 million).
FCL on March 12 received a letter of eligibility from the Singapore Exchange for the listing and quoting of up to 500 million stapled securities.
The eligibility-to-list letter is valid for three months, suggesting that FHT will be listed by June 12.
FCL said it will convene an extraordinary general meeting (EGM) on May 28 for shareholders to vote on FHT's listing.
PricewaterhouseCoopers Corporate Finance is the independent financial adviser to independent directors and the audit committee.
"The setting up of FHT is in line with our ongoing strategy to optimise capital productivity and strengthen our income base through Reit platforms," said FCL chief executive Lim Ee Seng.
FCL will use the cash balance of the gross proceeds to pay off bank loans and transaction-related costs as well as fund working capital and future business plans.
Mr Lim also said at FCL's first- quarter results briefing yesterday that there was no need for FCL to hold a bigger stake in FHT given that FCL will fully own the Reit manager and trustee-manager of FHT. This already allows the group to drive strategic decisions for FHT, Mr Lim said.
FHT has right of first refusal to income-generating hospitality assets of FCL and TCC Group outside of Thailand.
Its initial six serviced residences - Frasers Suites Singapore, Fraser Suites Sydney, Fraser Place Canary Wharf, Fraser Suites Queens Gate, Fraser Suites Glasgow and Fraser Suites Edinburgh - have an appraised value of $620.4 million on a 75-year leasehold basis.
The six hotels - InterContinental Singapore, Novotel Rockford Darling Harbour, Park International London, Best Western Cromwell London, ANA Crowne Plaza Kobe and Westin Kuala Lumpur - have a total of 1,928 rooms.
FCL said it had acquired the iconic Sofitel Sydney Wentworth, marking its fifth hospitality asset in Australia.
The hotel, a close distance to the Opera House and Sydney Harbour Bridge, enjoys occupancy of above 85 per cent. It will continue to be run by Accor Asia Pacific under the Sofitel brand.
"We bought this asset because it fits FCL's investment criteria perfectly," said Fraser Hospitality chief executive Choe Peng Sum, adding that the hospitality arm was on track to double its inventory to 30,000 rooms over the next five years.

[greengiraffe]

FCL, cimb maintain ADD:

Strategic hospitality trust listing
FCL has announced its acquisition of Sofitel Sydney Wentworth and proposed
the listing of a hospitality trust. In our view, this is a strategic move, to
consolidate TCC’s and its hospitality assets and expand its
asset/room-management platform. Financial impact is marginally positive,
adding 0.7% to its RNAV and 0.2-0.5% to its FY14-16 EPS. FCL remains
attractive for its valuations and strong fundamentals. We expect its FHT
(Frasers Hospitality Trust) listing to speed up its capital recycling and boost
its rooms under management. We maintain our Add rating with a higher
target price (30% discount to RNAV) after raising our forecasts.
What Happened
FCL announced its proposed listing of FHT and acquisition of the 436-room
Sofitel Sydney Wentworth for A$202.7m (S$237m). FHT will own an initial 12
assets, six serviced apartments (SAs) from FCL plus six hotels from TCC. FCL
will sell its six SAs with 75-year leases for a minimum S$652m, below their
current freehold book value of S$687m but above an independent valuation of
S$620m for the 75-year leases. FCL will be the master lessee of the assets and
FHT’s REIT Manager and Trustee Manager; it is expected to own 22% of FHT.
What We Think
Marginally positive financially. FCL is essentially swapping the capital
stuck in six SAs (S$652m) for an Australian hotel (S$237m) and a 22% stake in
FHT (S$286m assuming S$2b asset size and 35% gearing for FHT). Selling
down the SAs below their book value is a mild negative for our RNAV but that
is more than compensated by a RNAV-accretive Australian acquisition and
enlarged asset-management platform. Overall, we estimate that the transaction
will add 0.7% to its RNAV and 0.2-0.5% to its FY14-16 EPS.
We see this move as a strategic one, to consolidate FCL’s and TCC’s
hospitality assets and increase rooms under management. We estimate the
GAV for its SA portfolio before FHT at S$1.9bn, less than the S$3.7bn under
ART which also holds SAs. However, with TCC’s over 40 hotels, FHT can be the
biggest hospitality REIT in the future. This should not only give FCL a ready
platform for future divestments but enlarge its asset-management business.
The move is also in line with management’s aim of doubling rooms under
management to 30,000 within the next five years.
What You Should Do
Stay invested for attractive valuations and strong fundamentals.

[greengiraffe]

Actually, TCC Land only has 13 overseas hotel that was "mandated" for FROR for FCL and of which 6 of the hotels has already been earmarked for FHT.

On a bigger macro picture in view of the prolong political uncertainties in Thailand, Charoen's move for F&N and the subsequent spinoffs from F&N could well be his foresight to mitigate the sovereign risks for his Thai based business empire.

His plans for FHT - a pipeline that he continue to have effective control will help him to recoup capital tied down in the assets, achieved tax efficiency, optimal gearing and domiciled the ownership of his overseas assets in a politically stable Singapore base.

For FCL, the most direct impact will be the extra fees earned from the 100% ownership of trustee and asset manager.

Vested
GG

FCL, cimb maintain ADD:

Strategic hospitality trust listing
FCL has announced its acquisition of Sofitel Sydney Wentworth and proposed
the listing of a hospitality trust. In our view, this is a strategic move, to
consolidate TCC’s and its hospitality assets and expand its
asset/room-management platform. Financial impact is marginally positive,
adding 0.7% to its RNAV and 0.2-0.5% to its FY14-16 EPS. FCL remains
attractive for its valuations and strong fundamentals. We expect its FHT
(Frasers Hospitality Trust) listing to speed up its capital recycling and boost
its rooms under management. We maintain our Add rating with a higher
target price (30% discount to RNAV) after raising our forecasts.
What Happened
FCL announced its proposed listing of FHT and acquisition of the 436-room
Sofitel Sydney Wentworth for A$202.7m (S$237m). FHT will own an initial 12
assets, six serviced apartments (SAs) from FCL plus six hotels from TCC. FCL
will sell its six SAs with 75-year leases for a minimum S$652m, below their
current freehold book value of S$687m but above an independent valuation of
S$620m for the 75-year leases. FCL will be the master lessee of the assets and
FHT’s REIT Manager and Trustee Manager; it is expected to own 22% of FHT.
What We Think
Marginally positive financially. FCL is essentially swapping the capital
stuck in six SAs (S$652m) for an Australian hotel (S$237m) and a 22% stake in
FHT (S$286m assuming S$2b asset size and 35% gearing for FHT). Selling
down the SAs below their book value is a mild negative for our RNAV but that
is more than compensated by a RNAV-accretive Australian acquisition and
enlarged asset-management platform. Overall, we estimate that the transaction
will add 0.7% to its RNAV and 0.2-0.5% to its FY14-16 EPS.
We see this move as a strategic one, to consolidate FCL’s and TCC’s
hospitality assets and increase rooms under management. We estimate the
GAV for its SA portfolio before FHT at S$1.9bn, less than the S$3.7bn under
ART which also holds SAs. However, with TCC’s over 40 hotels, FHT can be the
biggest hospitality REIT in the future. This should not only give FCL a ready
platform for future divestments but enlarge its asset-management business.
The move is also in line with management’s aim of doubling rooms under
management to 30,000 within the next five years.
What You Should Do
Stay invested for attractive valuations and strong fundamentals.

[jianjian]

Actuallly, it looks like im investing my $ in mr. Chaoren directly. Able to engineer such big deals.

No wonder he is 1 of the richest. Really a true businessman.

If there is a CHAOREN fund or chaoren ETF. I might put my $ in it too.

[greengiraffe]

Charoen = 超人。。。so far so good. Following his successful LBO of F&N and Heineken's tilt to fully owned APB, Charoen has been able to help himself to F&N's near century of partnership with Heineken in APB - pay out the excessive cashhoard to himself and few hardcore loyal minorities. Given the continued listing of F&N, separate listing of FCL - a substantial contributor of F&N was a natural path.

As FCL is a property concern and was distributed free to F&N holders, it is inevitable that its true value wasn't well appreciated in the early days of listing.

I have previously listed milestones that FCL needed to roll out as a listed entity to reinforce to the investment community that it is a sizable property company with exposures to a full spectrum of the sector enhanced by multi-platforms globally and an established track record that was hidden under F&N for slightly over a decade.

All these milestones have already been achieved. However, Charoen at least from the perspective of Thai Bev still need to unlock value from FCL. I think between TCC and Thai Bev, Thai Bev's 28% stake in FCL is likely to be divested to satisfy future potential demand from institutions in FCL.

Hence, the story in FCL remains well alive even though it is less compelling for value hunters when share price was trading below $1.60.

There is no doubt that even a part of the 28% FCL stake from Thai Bev can be an overhang. However as we are dealing with a shrewd seasoned businessman, I think he is likely to charm and convince potential investors in FCL that upside remains even at the price that such a placement will be done. 9 Jul 14 is the important date to bear in mind but personally I think FCL share price will keep performing till it make its way into a major index inclusion.

Stay tuned
Vested
GG

[LLI]

I might be more careful with a Chaoren Fund though. lol

Actuallly, it looks like im investing my $ in mr. Chaoren directly. Able to engineer such big deals.

No wonder he is 1 of the richest. Really a true businessman.

If there is a CHAOREN fund or chaoren ETF. I might put my $ in it too.