Real estate investment group ARA Group is spinning off a raft of American hotels under the Hyatt brand into a business trust that it wants to list on the Singapore Exchange (SGX).
It would be the SGX's first hospitality trust focused purely on the United States market and the first new counter on the mainboard since foodcourt operator Koufu Group listed last July.
The pricing, amount to be raised and timing of the initial public offering have not been set.
There will be a concurrent offering for cornerstone investors - SingHaiyi controlling shareholders Gordon Tang and Celine Tang, Bank of Singapore, DBS Bank, Credit Suisse and United Overseas Bank and investment firm ICH Capital.
The ARA US Hospitality Trust will have an initial portfolio of 38 hotels - 27 Hyatt Place select-service outlets and 11 Hyatt House extended-stay inns across the US with an appraised value of US$719.5 million (S$978 million).
The hotels have a total of 4,950 rooms and had net property income of US$53.2 million in the 2018 financial year on a weighted average revenue per available room of US$94.
The trust is projected to post net property income of US$42.3 million and distributable income of US$26.1 million for the eight-month period from May 1 to Dec 31 this year.
Number of hotels in ARA US Hospitality Trust's initial portfolio.
Net property income is projected to be US$60.6 million next year with total distributable income forecast at US$39.8 million.
The hotels have undergone refurbishments with around US$55.2 million spent since 2015, the prospectus said. There are also plans for US$14.7 million of renovations and other capital expenditure expected this year, to be funded from existing cash balances.
The prospectus added that rising demand in the transient travel segment means hotels, such as those in the trust's portfolio that serve this sector, will benefit disproportionately. It noted that the portfolio derived 82 per cent of its occupied room nights from transient demand last year.
The overall leverage limit of ARA US Hospitality Trust is 45 per cent of its total deposited property.
The prospectus said that ARA H-Reit is expected to have an aggregate leverage of 33.4 per cent and gross borrowings of US$251.8 million at its listing date.
DBS Bank is the issue manager. The financial advisers and global coordinators are DBS, OCBC Bank and UOB, while the joint bookrunners and underwriters are DBS, OCBC, UOB and Credit Suisse (Singapore).