Valley Point could be the hidden gem in Frasers Property’s S$2.1 billion hospitality ‘asset-light’ proposal

​[SINGAPORE] Real estate giant Frasers Property’s review of Frasers Hospitality Trust’s (FHT) portfolio following its privatisation last year has finally culminated in a S$2.1 billion game of asset musical chairs.

Controlled by the family of Thai billionaire Charoen Sirivadhanabhakdi, the Singapore-listed property developer on Thursday (Jun 25) unveiled a “portfolio optimisation” plan that will see FHT’s assets separated into four groups.

• Stabilised assets, which refer to mature assets with lower yield. Frasers Property will divest all assets in this group. Doing so will let the property group unlock capital from stabilised assets. At the same time, it can continue managing those assets for third-party investors and earn recurring fee income.
• Assets with the potential to achieve higher yield through value-enhancement initiatives.
• Non-core assets, which will continue to be held under FHT for future opportunistic divestment.
• Asset for potential redevelopment, which will be divested to Frasers Property to enable any potential redevelopment. This means that Frasers Property can consolidate full ownership of Fraser Suites Singapore, facilitating a potential redevelopment of the Valley Point site.

The restructuring will reverse certain legacy arrangements previously put in place for FHT’s listing. These include the removal of minimum fixed rental and corporate guarantee obligations by Frasers Property.