ARA US Hospitality Trust Raises $498m In Singapore IPO

ARA US Hospitality Trust (ARA H-Reit) has raised $498 million by selling 379.8 million stapled securities at $0.88 apiece in its initial public offering in Singapore, according to a company statement Thursday.

The public offer was 1.1 times subscribed with six cornerstone investors subscribing to an aggregate of 132.28 million stapled securities for $116.5 million.

The cornerstone investors include Celine Tang, who is the managing director at property firm SingHaiyi Group, her husband, Singaporean businessman Tang Gordon, as well as DBS Bank Ltd, Credit Suisse AG, and United Overseas Bank Ltd on behalf of their clients.

“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,” said Lee Jin Yong, CEO of ARA Trust Management.

The first pure-play US upscale select-service hospitality portfolio to be listed on the SGX-ST, ARA US Hospitality Trust’s Initial Portfolio valued at $719.5 million comprises 38 upscale select-service hotels totaling 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.

John Lim, Group CEO of ARA, said the IPO is “a reflection of the market confidence” in ARA-sponsored Trust that is underpinned by a quality of portfolio and experienced management team.

The ARA IPO is the first IPO of size in Singapore this year, as companies have raised just $28 million from first-time share sales, according to data compiled by Bloomberg. In 2018, the money raised from the stock exchange’s 15 IPOs, excluding depositary receipts, fell more than 80 per cent to $535 million.

ARA Asset Management Limited is a global integrated real assets fund manager. As of 31 December 2018, the gross assets managed by ARA Group and its associates stood at approximately S$80.1 billion ($58.8 billion) across over 100 cities in 23 countries.