Frasers Hospitality to expand units to 30,000 by 2019

This could boost FPL’s growth for the year.

DBS Research Limited reported that Frasers Hospitality is expected to expand its footprint to 30,000 managed units by 2019, potentially boosting Frasers Property Limited (FPL) growth for the year.

DBS Research also sees potential upturn from the acquisition of Malmaison Hotel du vin Group (MHDB), which has a portfolio of 29 boutique lifestyle hotels and 2,082 keys within 25 regional cities in the UK.

Further, FPL’s commercial portfolio is expected to increase earnings this year, specifically from the completions of Waterway Point, Northpoint City and Frasers Towers, whilst the acquisition of Golden Land Property Development PCL could grow its real estate market in Thailand.

Meanwhile, FPL has unrecognised revenues of about $3b in its Australian industrial property division, with over 20m sq ft of development space to be realised.

Here’s more from DBS Research:

Expectations of policy relaxation (especially cyclical measures like the buyers’ and sellers’ stamp duties) may improve sentiment for property buyers, and spark a revival in transaction volumes in the Singapore residential market. This would also lift sentiment on property stocks, which we believe will enable FPL to close the gap between its stock price and NAV.

Recycling activities are perceived positively by investors as FPL is able to free up capital by selling its matured assets to its listed REITs, which will improve the group’s balance sheet position and recycle capital to projects with higher returns.