Eagle Hospitality Trust lodges IPO prospectus

It plans to float its initial portfolio of 18 hotels across the US worth US$1.27b.

Eagle Hospitality Trust (EHT) lodged a prospectus for an initial public offering (IPO) in Singapore, an announcement revealed.

About 559.34 million shares at US$0.80-0.81 will be available in total for the offering. Cornerstone investors including DBS Bank, DBS Bank’s management clients, Gold Pot Developments, and Ji Qi have already subscribed to 139.50 million of shares.

EHT comprises a REIT and business trust. The Singapore-based EH-REIT has an initial portfolio with 18 full service properties, comprising nine Upper Upscale hotels, five Upscale hotels, and four Upper Midscale hotels with a total of 5,420 rooms and an aggregate valuation of US$1.27b. For its initial portfolio, it expects a yield of 8.1%-8.2% in 2020.

Some of the largest hotels that EH-REIT currently holds include Holiday Inn Resort Orlando Suites – Waterpark in Orlando, Florida with 777 rooms, and Crowne Plaza Dallas Near Galleria-Addison in Dallas, Texas with 428 rooms.

The REIT has spent US$174m of capex on the initial portfolio since 2013 and has refurbished 77.2% of it since 2018. Meanwhile, fixed rent accounts for 66% of rental income, whilst 71.3% of variable rent is based on gross operating revenue.

EHT also indicated that it has two pipeline assets with potential acquisition opportunities.

It is currently 51% owned by co-founder Howard Wu and 49% owned by co-founder Taylor Woods. Wu and Woods will own an aggregate stake of 18.3% in EHT after the IPO.

The trust has appointed DBS as its sole financial adviser and issue manager; DBS, Bank of America Merrill Lynch, UBS, and BNP Paribas as joint global coordinators; and DBS, BofAML, UBS, BNP Paribas, Deutsche Bank, and Jefferies as joint bookrunners and underwriters.