SINGAPORE (May 9): ARA US Hospitality Trust has completed its initial public offering (IPO) of about 379.8 million offer shares at 88 US cents per share.
See: ARA US Hospitality Trust selling shares at US$0.88 each to raise US$498 mil in IPO
Based on the approximately 51.1 million stapled securities available to the public for subscription, the public offer was approximately 1.1 times subscribed.
ARA US Hospitality Trust is the first pure-play US upscale select-service hospitality portfolio to be listed on SGX. The trust’s initial portfolio is valued at US$719.5 million, comprising 38 upscale select-service hotels with 4,950 rooms across 21 states in US.
Alongside commitments from the six cornerstone investors who have subscribed for an aggregate of about 132.4 million stapled securities, around 565.9 million stapled securities were issued to raise gross proceeds of approximately US$498 million ($679 million).
The trust will be listed on the Mainboard of Singapore Exchange (SGX) and trading in its units will commence today at 2pm.
Based on the offering price of 88 US cents, the trust offers an annualised distribution yield of 8.0% for forecast period 2019 and an expected distribution yield growth of 2.1% in projection year 2020, representing a total return of 10.1%.
Lee Jin Yong, CEO of the managers, says, “The support we’ve received from both institutional and retail investors really encourages us. We now forge ahead, embarking on a new chapter for the Trust. We will diligently focus on organic growth opportunities through active asset management and thoughtfully expand the portfolio through accretive investments, always keeping a clear focus on providing stable cash flows and enhancing value for our security holders.”
