ARA US Hospitality Trust has announced that it has successfully completed its Initial Public Offering (IPO) of 379,776,300 Stapled Securities at the Offering Price of US$0.88 per each for listing on the Singapore Exchange (SGX-ST).
John Lim, Group CEO of ARA, said, "The successful IPO of ARA US Hospitality Trust is a reflection of the market confidence in an ARA-sponsored Trust that is underpinned by a quality portfolio and an experienced management team. Given the ARA Group's strong track record in managing REITs and the Trust's unique investment proposition as the first pure-play US upscale select-service hospitality trust listed on the SGX-ST, we are very excited about its future potential."
The indications of interest received for the Placement Tranche of 328,640,300 Stapled Securities was fully subscribed. The valid acceptances for the Reserved Stapled Securities resulted in all 8,585,000 Reserved Stapled Securities being allocated. In addition, as at the close of the Public Offer there were 3,134 valid applications for 54,744,400 Stapled Securities. Based on the 51,136,000 Stapled Securities available to the public for subscription, the Public Offer was approximately 1.1 times subscribed.
Besides the six Cornerstone Investors who have subscribed 132,382,700 Stapled Securities, a total of 565,909,000 Stapled Securities were issued to raise US$498.0 million.
The first pure-play U.S. upscale select-service hospitality portfolio to be listed on the SGX-ST, ARA US Hospitality Trust's Initial Portfolio valued at US$719.5 million comprises 38 upscale select-service hotels totalling 4,950 rooms and is geographically diversified across 21 states in the US – the world's largest lodging market. In addition, 364 out of the total 38 Properties have freehold land titles.
Based on the Offering Price of US$0.88, ARA US Hospitality Trust offers an annualised distribution yield of 8.0% 5, 6 for Forecast Period 2019 and expected distribution yield growth of 2.1%7 in Projection Year 2020, representing a total return of 10.1% 8.
This is backed by the Initial Portfolio's stable operating performance between FY2016 and FY2018 and a gearing ratio of 33.4% at Listing Date.
Trading of Stapled Securities in ARA US Hospitality Trust on the Main Board of the SGX-ST will commence at 2.00 p.m. on Thursday, 9 May 2019.
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