Thai billionaire Charoen said to plan S$2b REIT

SINGAPORE — Thai billionaire Charoen Sirivadhanabhakdi is planning to inject some of his properties in Singapore — including serviced apartments owned by Frasers Hospitality, a wholly-owned unit of his newly acquired Singapore-listed Fraser and Neave (F&N) — into a real estate investment trust (REIT) that could be valued at more than S$2 billion, company sources said.

The proposed REIT is also expected to include Hotel InterContinental at Bugis Junction and the Suites @ Cairnhill condominium, and may be launched around the first quarter of next year.

With the Frasers Hospitality-owned properties said to be worth some S$1.4 billion, the total size of the proposed REIT with the two additional properties, will amount to more than S$2 billion, the sources said.

As an indication of the value of the properties in Frasers Hospitality, in October of last year, parent F&N received an unsolicited cash offer of S$1.4 billion for Frasers Hospitality from Overseas Union Enterprise, a property affiliate of Indonesia-based Lippo Group. This was in the midst of the takeover offer by Mr Charoen’s family holding company, TCC Assets.

According to the sources, Mr Charoen is also expected to turn the 48-apartment Suites @ Cairnhill condominium into a serviced apartment that will be run by Frasers Hospitality.

Demand for units at the Suites @ Cairnhill, where monthly rents range between S$6,500 and S$16,000, has not been encouraging, sources said, and Mr Charoen believes he can improve yields significantly by converting them into serviced apartments.

And with serviced apartment occupancy levels in Singapore currently running at more than 80 per cent, the proposed conversion makes obvious sense, they said.

As of end last year, Frasers fully owned 11 properties in Melbourne, Beijing, Jakarta, London, Edinburgh, Glasgow, Manila and Singapore, with some 1,900 apartments. It also has a 50-per-cent-stake in Singapore’s first hotel residence, the 313-suite Capri by Fraser in Changi, and an 81-per-cent interest in Fraser Suites Sydney, which has 201 apartments.

There is also talk that Mr Charoen might include some properties he owns in Thailand and elsewhere, such as Australia and the United States, into the proposed REIT. His private property arm, TCC Land, is the largest owner of Marriott International hotels in the Asia-Pacific region as well as landlord of Bangkok’s famous tech-mall Pantip Plaza and Hotel Plaza Athenee in Manhattan.

F&N already has two other REITS in its portfolio — Frasers Commercial Trust, which owns and manages high-end office properties with a combined appraised value of S$1.8 billion, and Frasers Centrepoint Trust, which owns a portfolio of five suburban shopping malls also valued at S$1.8 billion.