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SINGAPORE (Apr 25): Eagle Hospitality Trust (EHT) has lodged its preliminary prospectus for a listing on the Singapore Exchange, seeking to raise gross proceeds of around US$453 million ($619 million).
This comes a day after another US hospitality REIT -- ARA Hospitality Trust -- lodged its prelim IPO prospectus on Wednesday to raise some US$450.7 million.
Like ARA Hospitality Trust, EHT is a stapled group comprising Eagle Hospitality REIT, a real estate investment trust, and Eagle Hospitality business trust, a registered business trust.
EHT’s initial portfolio of property assets comprises 18 full-service hotel properties valued at US$1.27 billion ($1.37 billion) with a total of 5,420 rooms. These include Queen Mary Long Beach (main image), a decommissioned ocean liner that has now been converted into a 347-room hotel; Sheraton Pasadena; Hilton Houston Galleria Area and The Westin Sacramento.
According to the prospectus, EHT is planning to sell between 559.3 million and 566.2 million stapled securities at a price range of US$0.80-0.81.
The pro forma NAV per stapled security is US$0.89.
Cornerstone investors include DBS Bank who is also the issue manager; Ji Qi, founder and executive chairman of Nasdaq-listed China hotel chain Huazhu Group and Gold Pot Developments, a multi-asset family fund owned by Gordon Tang who also has a controlling stake in Singapore-listed property developer SingHaiyi.
EHT’s sponsor is Urban Commons, LLC is a privately-held real estate investment and development firm with a specific emphasis on hotels. The manager of EH-REIT is Eagle Hospitality REIT Management which is indirectly 51% owned by Howard Wu and 49% owned by Taylor Woods who also each own a 50% stake in the sponsor.
EHT’s manager is forecasting a distribution yield of 7.9-8% for 2019 and 8.1-8.2% for 2020.
In FY2018, EH-REIT, which comprises 12 properties, reported revenue of US$59.5 million and a net property income of US$47.4 million on a pro forma basis. Amount of distribution came in at US$31.6 million, also on a pro forma basis.
For the period from May 1 to Dec 31, EH-REIT is forecasting income available for distribution to holders of the stapled securities of about US$37.2 million depending on the offering price.
Although hotel revenue continues to grow, industry watchers say the US is not fully cashing in on the opportunity due partly to the strong US dollar that don’t favour tourists from the emerging middle classes of India and China.