ML Hospitality Trusts, the owner of
Australia’s biggest hotel, may seek a listing in the country
after abandoning its initial stock sale in Singapore last year.
The trust, with $1 billion of hotels in five nations, may
add more properties before its next listing attempt, said
Michael Kum, the chairman of the Singapore-based ML. The owner
of the Four Points by Sheraton overlooking Sydney’s Darling
Harbour dropped plans to raise as much as S$463 million ($373
million) in April 2012 because demand was weaker than targeted,
two people with knowledge of the matter said at the time.
“Whenever the market recovers, we’ll look at a listing
seriously, whether it’s Australia or Singapore,” Kum said in an
interview in Singapore yesterday. “We’ll continue to look at
Australia, at Brisbane, Perth” for acquisitions, he said of the
state capitals of Queensland and Western Australia.
Capital values of hotels in Australian city centers are
expected to rise 2.7 percent over the next two years, the
strongest growth of any commercial property asset class,
according to a second-quarter survey of real estate
professionals by National Australia Bank Ltd.
Companies have raised $4.8 billion through initial public
offerings in Singapore in the past year, with REITs and business
trusts accounting for the majority of fundraising, according to
data compiled by Bloomberg. In Australia, they raised $2
billion, the data show.
Kum declined to give more details on the next listing
attempt. ML owns two hotels each in Melbourne and Sydney, where
its 683-room Four Points was cited by the New South Wales state
government as the biggest in the country. The property, along
with assets including Japan’s Hilton Nagoya, the Swissotel in
Sydney and the Ibis in Singapore, were among the hotels in the
earlier share sale in the city-state.
ML last week said it had received government approval to
expand its Sydney Four Points by adding a third tower and 230
rooms. The company is also spending about A$6 million ($5.8
million) to upgrade its Citigate Hotel in Melbourne from an
“economy” to a “mid-scale” property, Kum said.
The decision to consider the Australian stock market also
came after the Singapore benchmark Straits Times Index (FSSTI) posted
the smallest gain among the world’s developed markets. The
Australian benchmark stock gauge has climbed 15 percent this
year, compared with the Straits Times Index’s 1.2 percent
advance, according to data compiled by Bloomberg.
The Singapore dollar has increased 1.5 percent this year
against the U.S. currency, while the Australian dollar fell 7.4
percent, the most among developed markets.
“In the case of Singapore and Australia, both are quite
developed markets, so the risk capital is not going to diverge
that much,” said Alan Richardson, a Hong Kong-based money
manager at Samsung Asset Management Ltd. “This is a good time
for opportunistically listing REITs right now because the risk-free rates have peaked over the next three to six months, so
there is this window of opportunity.”
ML is also considering the stock offering as hotel-property sales increased. Asia-Pacific hotel sales more than
doubled to $2.8 billion in the third quarter, with Australia,
Singapore and Japan accounting for 83 percent of the
investments, property broker Savills Plc said in a report on
Oct. 7. Hotel sales will rise about 30 percent in the fourth
quarter, it added.
The SP/ASX 200 A-REIT Index that tracks property trusts in
Australia trades at a 5.4 percent yield, while a similar gauge
of REITs in Singapore offers 4.8 percent. Still, the valuations
are higher in Australia, where the REIT index trades at 18 times
earnings, or twice the multiple for Singapore.
“Wherever there’s good opportunity, that’s where we go,”
To contact the reporters on this story:
Nichola Saminather in Sydney at
Pooja Thakur in Singapore at
To contact the editor responsible for this story:
Andreea Papuc at