US-BASED property trusts are expected to grace Singapore's IPO scene this year, and the first of the beauty parades has begun.
Eagle Hospitality Trust, backed by Los Angeles-based property investor and developer Urban Commons, has begun gauging investor interest ahead of a planned initial public offering (IPO) that could raise up to US$575 million.
That would make it the first pure-play US hospitality trust to list here, with a market cap of US$750 million upon its debut.
Based on Eagle's indicative timeline, the IPO prospectus was to be lodged in mid-March, ahead of a listing in mid-April. Roadshows will be held from next week.
The stapled hospitality trust is promising an indicative dividend yield in the high 7 per cent or 8 per cent range for 2019.
Eagle's portfolio of 18 hotels is valued at US$1.27 billion, according to deal terms seen by The Business Times. With 5,420 rooms, that works out to around US$234,317 per key for a full service hotel portfolio.
Eagle's hotels are branded by global hotel franchisors. Its Holiday Inn Resorts Orlando Suites, a 777-room freehold upper midscale hotel and waterpark, sits next to Disney World in Florida.
In California, it owns the Sheraton Pasadena, a 311-room freehold upper upscale hotel.
Also in California, aboard a retired British ocean liner docked on the shores of Long Beach, sits The Queen Mary, Eagle's iconic 347-room hotel with 64 years left on its lease.
Eagle's assets span the 11 US markets of Los Angeles, Denver, Orlando, New York, San Francisco, Dallas, Houston, Atlanta, San Bernardino, Sacramento and Salt Lake City.
Portfolio occupancy was 73.6 per cent in 2018, above the US lodging market average of 66.1 per cent.
Revenue per available room (RevPAR) is projected to grow by 14.5 per cent in 2019 and 2.9 per cent in 2020, pre-marketing materials show.
Asset enhancements are expected to drive growth. Major refurbishments have been completed on some 77.2 per cent of the portfolio since 2018.
Eagle's sponsor Urban Commons has spent US$189 million of capex to undertake major refurbishments on 90.4 per cent of the portfolio since 2013.
Distributable income is projected to grow by 4.1 per cent between 2019 and 2020.
Urban Commons is wholly-owned by founders Howard Wu and Taylor Woods. Mr Wu and Mr Woods together acquired and built Urban Commons' portfolio over a decade.
The sponsor will own a 25 to 30 per cent stake in Eagle Hospitality Trust post-listing.
DBS Bank, Bank of America Merrill Lynch and UBS are the joint global coordinators for the IPO. DBS is the issue manager.
The trust's listing and reporting currency will be in US dollars.