Singapore REITs on the Love (and Take‑Private) Budget
Feel that buzz in the real estate market? Singapore’s $7 billion REIT scene is starting to shake up—private firms are looking to buy out their public counterparts, and the buzz is getting louder every day.
Frasers Property’s Bold Move
Just this week, Frasers Property Ltd (FPL) dropped a bombshell: we’re talking about pulling Frasers Hospitality Trust off the stock exchange with a $1.35 billion valuation. That’s a hefty splash for a unit that’s been skating around for a while.
Why This Matters
- Singapore’s REITs have a big fan base of retail investors who love those juicy dividends.
- Hospitals, hotels and retail spaces are dropping their assets in bulk—it’s a consolidation frenzy.
- And with COVID‑19 still dampening travel, the industry’s under a tough squeeze.
Take‑Private This, Take‑Private That
Travis Lundy at Quiddity Advisors isn’t shy: “Right now, small hospitality and retail REITs—those trading at a big discount to their net asset value—are the real targets.”
Why? Because their low NAVs and limited scale make them easy pickings for opportunistic power players like FPL. Take-privates aren’t just about numbers—they’re about strategic gameplay in a high‑interest race.
Singapore’s REIT Landscape
- 44 REITs and property trusts, collectively worth S$117 billion.
- Frasers Hospitality Trust (FHT) sits as the second smallest among the five listed hospitality trusts.
- Old‑timer assets like Ascott, CDL and Far East Hospitality Trust are in the mix.
- OUE Commercial REIT mixes both commercial and hospitality—typical “one‑stop” diversifier.
Numbers That Matter
FHT’s net asset value has taken a hit since its 2014 debut—thanks to steady sector growth and a strengthening Singapore dollar. FPL’s offer: $0.70 per share, which is a 44% premium over a yearly average price before the review.
That’s a 1.07× NAV valuation—pretty neat compared to peers who’re trading at lower multiples.
What Analysts Say
- Brandon Lee at Citi expects a competitive reaction across hospitality REITs as the market realigns.
- Critics note that higher borrowing costs and fierce competition from Big PE players will make scale harder to grow.
Bottom line: As the take‑private wave builds, investors will need to stay sharp. The drama of these deals is only just beginning, but it’s soon to become a headline grabber—so keep your eyes and ears open!
