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Frasers Property Makes Second Attempt to Privatize Frasers Hospitality Trust

Frasers Hospitality Trust

News Summary

Frasers Property is attempting to privatize Frasers Hospitality Trust with a S$1.37 billion bid, offering S$0.71 per share, slightly above last year’s failed offer. Holding over 60% of shares, Frasers aims to consolidate its ownership amidst softening hospitality market conditions. The renewed offer may appeal to investors concerned about sector performance. Concurrently, various developments in the hotel industry highlight ongoing investments despite market fluctuations, such as new hotel projects and management changes.

Singapore – Frasers Property, a Singapore-based real estate company, is making its second attempt to privatize Frasers Hospitality Trust, a real estate investment trust (REIT), with a deal valued at S$1.37 billion (approximately $1.1 billion). This move comes as the company seeks to acquire shares it does not currently own at a price of S$0.71 per share, which is slightly higher than the previous offer of S$0.70 that failed to gain sufficient shareholder support in 2022.

Frasers Property already holds over 60% of Frasers Hospitality Trust’s shares. The proposed acquisition aims to consolidate its ownership and streamline operations, aligning with growing trends in the market. Analysts suggest that the current offer is appealing, especially given the softening outlook for the hospitality sector and the relatively small asset size of the REIT, which could sway shareholder sentiment in favor of the buyout.

This renewed effort follows a lack of investor interest during Frasers Property’s previous attempt last year. Shareholders at that time were not convinced by the S$0.70 offer, reflecting broader concerns regarding the valuation and market conditions affecting the hospitality industry. The low performance potential of the sector may make this increased offer appear more viable and attractive to investors.

In addition to the ongoing developments with Frasers Hospitality Trust, the wider hotel industry is also seeing movements elsewhere. Innisfree Hotels and RREAF Holdings have secured $23.6 million to refinance their conversion project for a Holiday Inn Resort located in Surfside Beach, South Carolina. This financing was arranged through Cronheim Hotel Capital and provided by a regional bank, indicating ongoing investments in hospitality despite market fluctuations.

American Liberty Hospitality (ALH), another player in the hotel market, is set to develop a dual-branded hotel comprising Fairfield by Marriott and TownePlace Suites by Marriott in Bastrop, Texas. The project, which is part of a 75-acre mixed-use development, is expected to break ground this year, with the aim of opening in early 2027.

Meanwhile, Waterford Hotel Group has taken over the management of two significant hotels: a 131-key Courtyard in Atlanta Norcross and a 216-key Embassy Suites in Cleveland Beachwood. This shows the fluid nature of hotel management and ownership, where companies adapt to market needs.

Another noteworthy construction project is led by Great Lakes Capital, in collaboration with Nebraska Furniture Mart and others, which has initiated the development of a Marriott hotel and convention center in Texas. This hotel will feature 297 keys and 30,000 sq. ft. of event space, with an expected completion date in the first quarter of 2027.

In the realm of hotel operations, Gulph Creek Hotels has taken the helm at the 95-key Home2 Suites by Hilton in Middletown, New York, becoming the second property managed by the group in that market. This reflects a strategic focus on expanding their management portfolio in growing regions.

Internationally, Hilton is advancing its footprint in Vietnam by opening the first four of 14 planned Tru by Hilton properties. This initiative, in partnership with ROX Group, is expected to see additional establishments completed by the end of 2025.

Marriott International is also enhancing its presence in Saudi Arabia, collaborating with various real estate groups to create a 191-key St Regis hotel and 92 branded residences in Jeddah, scheduled to open in 2030.

Another international venture includes RJJ Hotels, formed from a partnership between Riyaz International and Jin Jiang Hotels, which has signed its initial hotel management agreement in Luang Prabang, Laos, for a property under the Metropolo brand. Their objective is to establish 181 hotel management agreements and manage 108 hotels across Southeast Asia within the next five years.

In Spain, REIT Vivenio has begun utilizing the Lavanda proptech platform to refine its flexible rental strategy across its portfolio of over 6,400 homes. This move emphasizes the ongoing digital transformation in the property management sector.