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42
Breakdown of Gross Rental Income by Hotels, Serviced Residences and the Initial Portfolio
Based on the unaudited pro forma financial information of FH-REIT for FY2013, the pro forma
Fixed Rent and Variable Rent as a percentage of the gross rental income for the Hotels, Serviced
Residences and the Initial Portfolio collectively is set out below.
Hotels
(S$million)
% of Gross
Rental
Income under
the Hotel
Master Lease
and Tenancy
Agreements
(FY2013)
Serviced
Residences
(S$million)
% of Gross
Rental
Income under
the Serviced
Residence
Master Lease
Agreements
(FY2013)
Initial
Portfolio
(S$million)
% of Gross
Rental
Income under
all Master
Lease and
Tenancy
Agreements
Pro Forma Fixed
Rent (FY2013)
28.7 47% 20.9 58% 49.6 51%
Pro Forma
Variable Rent
(FY2013)
33.0 53% 15.0 42% 48.0 49%
Total 61.7 100% 35.9 100% 97.6 100%
OPERATIONAL DATA OF THE INITIAL PORTFOLIO
Operational Data of the Hotels
The ADR, occupancy rate and RevPAR of the Hotels for FY2011, FY2012 and FY2013 are set out
below.
Hotel Currency
ADR
FY2011 FY2012 FY2013
InterContinental Singapore SGD 293 304 299
Novotel Rockford Darling Harbour AUD 151 155 164
Park International London
(1)
GBP 88 113 100
Best Western Cromwell London GBP 93 89 86
ANA Crowne Plaza Kobe JPY 11,429 11,193 11,530
The Westin Kuala Lumpur MYR 445 465 473
Hotel
Occupancy Rate (%)
FY2011 FY2012 FY2013
InterContinental Singapore 82 90 88
Novotel Rockford Darling Harbour 88 88 90
Park International London
(1)
43 59 70
Best Western Cromwell London 73 78 80
ANA Crowne Plaza Kobe 76 77 77
The Westin Kuala Lumpur 72 77 79
43
Hotel Currency
RevPAR
FY2011 FY2012 FY2013
InterContinental Singapore SGD 241 272 263
Novotel Rockford Darling Harbour AUD 133 137 147
Park International London
(1)
GBP 38 67 70
Best Western Cromwell London GBP 68 69 69
ANA Crowne Plaza Kobe JPY 8,686 8,589 8,865
The Westin Kuala Lumpur MYR 322 356 374
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
Guest Profile of the Hotels
The following charts set out a breakdown of the guest profile of the Hotels by market segment and
country of origin as of FY2013.
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
(1)
MICE
7.2%
Aircrew
3.2%
Corporate and
Government
19.6%
Retail /
Leisure /
Transient
50.0%
Wholesale
9.3%
Other
10.7%
Europe
11.9%
North
America
8.0%
South
America
1.5%
Africa and
Middle East
3.4%
North and
North East
Asia
37.5%
South Asia
1.3%
South East
Asia
16.7%
Oceania
17.6%
Others,
2.1%
Note:
(1) Excludes Best Western Cromwell London as that property does not collect data on room nights by geography.
44
Operational Data of the Serviced Residences
The ADR, occupancy rate and RevPAR for the Serviced Residences for FY2011, FY2012 and
FY2013 are set out below.
Serviced Residence Currency
ADR
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
SGD 271 307 327
Fraser Suites Sydney AUD 210 214 226
Fraser Place Canary Wharf
(2)
GBP 151 156 147
Fraser Suites Queens Gate
(3)
GBP
(4)
133 150
Fraser Suites Glasgow
(5)
GBP 69 62 67
Fraser Suites Edinburgh GBP 101 95 104
Serviced Residence
Occupancy Rate (%)
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
84 55 82
Fraser Suites Sydney 88 88 89
Fraser Place Canary Wharf
(2)
89 80 80
Fraser Suites Queens Gate
(3)
(4)
81 11
Fraser Suites Glasgow
(5)
70 73 78
Fraser Suites Edinburgh 74 81 84
Serviced Residence Currency
RevPAR
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
SGD 228 168 267
Fraser Suites Sydney AUD 184 188 201
Fraser Place Canary Wharf
(2)
GBP 134 125 118
Fraser Suites Queens Gate
(3)
GBP
(4)
108 17
Fraser Suites Glasgow
(5)
GBP 48 45 52
Fraser Suites Edinburgh GBP 75 77 87
Notes:
(1) Fraser Suites Singapore was partially closed in FY2012 for renovation.
(2) Fraser Place Canary Wharf was partially closed in FY2012 for renovation.
(3) Fraser Suites Queens Gate was closed in FY2013 for renovation.
(4) Fraser Suites Queens Gate was acquired in December 2011 and accordingly, there are no comparative results of
its operations for FY2011.
(5) Fraser Suites Glasgow was partially closed from August 2012 to March 2013 for renovation.
45
Guest Profile of the Serviced Residences
The following charts set out a breakdown of the guest profile of the Serviced Residences by
market segment and country of origin as of FY2013.
Guest Profile of the Serviced Residences by Market Segment as of FY2013
Corporate and
Government
57.0%
Leisure
34.8%
Groups
8.2%
Guest Profile of the Serviced Residences by Country of Origin as of FY2013
Europe 29.6%
North America
10.1%
North Asia 6.3%
South Asia
5.1%
South East Asia
9.5%
Oceania
27.9%
Others
11.5%
46
Length of Stay Profile for the Serviced Residences
The leases or licenses entered into for the serviced residence units in the Serviced Residences
may be for a week or up to several years. In line with normal commercial practice, renewals are
generally on the same terms and conditions as the original lease/licence agreements except for
the rental rate, which will be revised to the prevailing market rate.
The following chart sets out the length of stay profile of the Serviced Residences on a portfolio
basis, in terms of rental income generated from the serviced residence units for FY2013.
Length of Stay Profile for the Serviced Residences
Less than 1
month
57.0%
1 to Less than 6
months
24.6%
6 to Less than
12 months
9.7%
More than 12
months
8.7%
47
STRUCTURE OF FHT
The following diagram illustrates the relationship between, among others, FH-REIT, FH-BT, the
REIT Manager, the REIT Trustee, the Trustee-Manager and Stapled Securityholders as at the
Listing Date:
Stapling
Deed
Distributions
Holding of FH-BT
Units
Holding of FH-REIT
Units
Acts on behalf of the
FH-REIT Unitholders
Distributions
InterContinental
Singapore
FH-REIT FH-BT
(3)
Trustee-
Manager
REIT Manager
REIT Trustee
Stapled
Securityholders
Fraser Suites
Singapore
Intermediate companies/entities in
Singapore, Australia, Malaysia,
Jersey and Japan
Australian
Properties
(1)
UK
Properties
(2)
ANA Crowne
Plaza Kobe
The Westin Kuala
Lumpur
Acts on behalf of the
FH-BT Unitholders Management
Services
Notes:
(1) Australian Properties refer to Novotel Rockford Darling Harbour and Fraser Suites Sydney.
(2) UK Properties refer to Park International London, Best Western Cromwell London, Fraser Place Canary Wharf,
Fraser Suites Queens Gate, Fraser Suites Glasgow and Fraser Suites Edinburgh.
(3) Dormant as at the Listing Date. In the event that FH-BT is appointed as master lessee for any of the Properties, the
Trustee-Manager intends to appoint a professional hotel manager or serviced residence operator (as the case may
be) to manage and operate the Property.
(See Overview of the Acquisition of the Properties for further details on the holding structure of
the Properties.)
FHT
The FH-REIT Units and FH-BT Units are stapled together under the terms of the stapling deed
dated 20 June 2014 entered into between the REIT Manager, the REIT Trustee and the
Trustee-Manager (the Stapling Deed) and cannot be traded separately. FHT is regulated by the
Stapling Deed, the FH-REIT Trust Deed and the FH-BT Trust Deed (collectively, the Deeds) as
well as any legislation and regulations governing FHT, FH-REIT and FH-BT.
FH-REIT
FH-REIT is constituted by a trust deed dated 12 June 2014 (the FH-REIT Trust Deed). It is
principally regulated by the SFA, the CIS Code, including the Property Funds Appendix, other
relevant regulations as well as the Stapling Deed and the FH-REIT Trust Deed.
FH-BT
FH-BT is constituted by a trust deed dated 20 June 2014 (the FH-BT Trust Deed). It is principally
regulated by the BTA, the SFA, and other relevant legislation and regulations, as well as the
Stapling Deed and the FH-BT Trust Deed.
48
As at the Listing Date, FH-BT will be dormant. It will, however, become active if any of the
following occurs:
it is appointed by FH-REIT, in the absence of any other master lessee(s) being appointed, as
a master lessee of one of the Properties. FH-BT exists primarily as a master lessee of last
resort;
FH-REIT acquires hotels or serviced residences in the future, and, if there are no other
suitable master lessees, FH-REIT will lease these acquired hotels or serviced residences to
FH-BT. FH-BT will then become a master lessee for that hotel or serviced residence and will
appoint a professional manager to manage that hotel or serviced residence; or
it undertakes certain hospitality or hospitality-related development projects, acquisitions and
investments which may not be suitable for FH-REIT, other than:
activities which FH-BT is required to carry out under any applicable law, regulation, rule
or directive of any agency, regulatory or supervisory body;
the lending or use of the initial S$10,000 working capital raised from the Offering; or
equity fund-raising activities and issue of FH-BT Units carried out in conjunction with
FH-REIT which are solely for the purposes of funding FH-REITs business activities.
When FH-BT becomes active, the Trustee-Manager will monitor and, where appropriate, manage
the exposure arising from adverse market movements in interest rates and foreign exchange
through appropriate hedging strategies. The extent of the foreign exchange exposure would
depend on the jurisdictions in which FH-BT becomes active in and the extent of the interest rate
exposure would depend on the type of financing facilities, if any, to be obtained by FH-BT. FH-BT
is currently dormant but if it becomes active, the Trustee-Manager will put in place appropriate
internal controls to ensure that hedging activities will only be undertaken for risk management
purposes.
FH-REIT will not guarantee any debt of FH-BT, and vice versa. This will help to shield each entity
from the others financial obligations because each entitys creditors will not have recourse to the
other.
The Sponsor
The Sponsor is a full-fledged international real estate company headquartered in Singapore and
its principal activities are property development, investment and management of commercial
property, serviced residences and property trusts. It was listed on the Main Board of the SGX-ST
by way of introduction on 9 January 2014.
The property portfolio of FCL and its subsidiaries (the FCL Group) comprises properties located
in Singapore and overseas, ranging from residential and commercial developments to shopping
malls, serviced residences and office and business space properties, as represented by the
following four lead brands/divisions:
Frasers Centrepoint Homes (for Singapore residential development properties);
Frasers Property (for overseas development properties);
Frasers Centrepoint Commercial (for shopping malls, office and business space properties);
and
49
Frasers Hospitality (for serviced residences).
(See The Sponsor and the Strategic Partner for further details.)
The Strategic Partner
The TCC Group is among the largest businesses in Southeast Asia and is engaged in a variety
of businesses including real estate. The TCC Group invests in and develops a wide range of real
estate projects globally, including hotels, office towers, retail centres, residences, serviced
apartments, convention centres, golf courses and resorts. As at 31 December 2013, it owns,
among others, 17 retail shopping centres with approximately 500,000 sq m of retail space, seven
commercial offices with approximately 810,000 sq m of office space, 40 hotels with over 10,000
keys/rooms in Thailand and 10 countries worldwide and over 48,000 acres of land bank for
development.
(See The Sponsor and the Strategic Partner for further details.)
The REIT Manager: Frasers Hospitality Asset Management Pte. Ltd.
The REIT Manager was incorporated in Singapore under the Companies Act, Chapter 50 of
Singapore (the Companies Act) on 20 November 2013. It has an issued and paid-up capital of
S$1.0 million and its registered office is located at 438 Alexandra Road, #21-00, Alexandra Point,
Singapore 119958. The telephone and facsimile numbers of the REIT Manager are +65 6276 4882
and +65 6276 6328, respectively. The REIT Manager is a wholly-owned subsidiary of the Sponsor.
Save as disclosed in this Prospectus, the REIT Manager is not, directly or indirectly, owned or
controlled, whether severally or jointly, by any person or government.
The REIT Manager has been issued a capital markets services licence for REIT management (the
CMS Licence) pursuant to the SFA.
The REIT Manager has general powers of management over the assets of FH-REIT. The REIT
Managers main responsibility is to manage FH-REITs assets and liabilities for the benefit of the
holders of FH-REIT Units. The REIT Manager will set the strategic direction of FH-REIT and give
recommendations to the REIT Trustee on the acquisition, divestment, development and/or
enhancement of the assets of FH-REIT in accordance with its stated investment strategy.
(See The Formation and Structure of FHT, FH-REIT and FH-BT for further details.)
The REIT Trustee: The Trust Company (Asia) Limited
The trustee of FH-REIT is The Trust Company (Asia) Limited. The REIT Trustee is a company
incorporated in Singapore on 30 December 2005 and it is an indirect wholly-owned subsidiary of
The Trust Company Limited, which is ultimately owned by Perpetual Limited, one of the largest
trustees in Australia and is listed on the Australian Securities Exchange. The REIT Trustee is
registered as a trust company under the Trust Companies Act, Chapter 336 of Singapore (the
Trust Companies Act). It is approved to act as a trustee for authorised collective investment
schemes under the SFA and is regulated by the MAS. It also holds a capital markets services
licence for the provision of custodial services for securities. The REIT Trustee acts as trustee to
two Singapore listed REITs and several unit trusts, custodian to several private pension funds and
private equity funds, and bond trustee to institutional and retail bond issues and supervises over
S$12 billion of corporate assets. The ultimate parent company of the REIT Trustee, Perpetual
Limited and its controlled entities, currently has in excess of AUD420 billion of funds under
administration across its Corporate Trust fiduciary business.
50
As at the date of this Prospectus, the REIT Trustee has a paid-up capital of S$7,974,811. The
REIT Trustees registered address is 8 Marina Boulevard, #05-02, Marina Bay Financial Centre,
Singapore 018981. The telephone and facsimile numbers of the REIT Trustee are +65 6645 0830
and +65 6438 0255, respectively.
The REIT Trustee acts as trustee of FH-REIT and, in such capacity, holds the assets of FH-REIT
on trust for the benefit of the holders of FH-REIT Units, safeguards the rights and interests of the
holders of FH-REIT Units and exercises all the powers of a trustee and the powers accompanying
ownership of the properties in FH-REIT.
(See The Formation and Structure of FHT, FH-REIT and FH-BT for further details.)
The Trustee-Manager: Frasers Hospitality Trust Management Pte. Ltd.
The Trustee-Manager is incorporated in Singapore under the Companies Act on 13 January 2014.
As at the Latest Practicable Date, it has an issued and paid-up capital of S$1.00 and its issued
and paid-up capital will be increased to S$10,000 on or prior to the Listing Date. Its registered
office is located at 438 Alexandra Road, #21-00, Alexandra Point, Singapore 119958.The
telephone and facsimile numbers of the Trustee-Manager are +65 6276 4882 and +65 6276 6328
respectively. The Trustee-Manager is a wholly-owned subsidiary of the Sponsor. Save as
aforementioned, the Trustee-Manager is not, directly or indirectly, owned or controlled, whether
severally or jointly, by any person or government.
The Trustee-Manager has the dual responsibilities of safeguarding the interests of the holders of
FH-BT Units, and managing the business conducted by FH-BT. The Trustee-Manager has general
powers of management over the business and assets of FH-BT and its main responsibility is to
manage FH-BTs assets and liabilities for the benefit of the holders of FH-BT Units as a whole.
(See The Formation and Structure of FHT, FH-REIT and FH-BT for further details.)
The Vendors, Master Lessees and Tenant
The following table shows the vendors of the Properties (the Vendors) and the master lessees
(the Master Lessees) or tenant (the Tenant) of the Properties (as the case may be). The
Vendors of the Hotels are subsidiaries of the TCC Group while the Vendors of the Serviced
Residences are subsidiaries of the Sponsor. The Master Lessees and Tenant will be wholly-owned
subsidiaries of the Sponsor, except for the Master Lessee for the retail component of ANA Crowne
Plaza Kobe (the Retail Master Lessee), Y.K. Toranomon Properties, which is a wholly-owned
subsidiary of the TCC Group.
The Sponsor will acquire five entities
1
from the TCC Group and its associates to be the Master
Lessees and Tenant of the Hotels. As at Listing Date, only two such entities, namely PI Hotel
Management Limited and K.K Shinkobe Holding will be wholly-owned subsidiaries of the Sponsor,
while the acquisition by the Sponsor of BCH Hotel Investment Pte Ltd, JBB Hotels Sdn. Bhd. and
Viewgrand Trust C will be completed post-listing of FHT. BCH Hotel Investment Pte Ltd and JBB
Hotels Sdn. Bhd. will only become wholly-owned subsidiaries of the Sponsor post-listing of FHT
2
.
1
One of the entities, P I Hotel Management Limited, will be the Master Lessee of two of the Hotels.
2
BCH Hotel Investment Pte Ltd and JBB Hotels Sdn. Bhd. will only become wholly-owned subsidiaries of the Sponsor
post-listing of FHT as these entities are the direct owners of each of InterContinental Singapore and The Westin
Kuala Lumpur. Upon the sale of InterContinental Singapore and The Westin Kuala Lumpur to FH-REIT on the Listing
Date, a capital reduction process will need to be completed to upstream sales proceeds and prior period profits to
the TCC Group. In the case of Viewgrand Trust C, Viewgrand Trust C is the direct owner of the FF&E in connection
with Novotel Rockford Darling Harbour. Upon the sale of the FF&E to FH-REIT on the Listing Date, a distribution to
the unitholder of Viewgrand Trust C will need to be completed to upstream sale proceeds and prior period profits
to the TCC Group. Therefore, the Sponsor will only complete acquisition of these entities post-listing at their
respective net asset values only after the respective capital reduction and distribution processes are completed.
51
In addition to the five entities mentioned above, the Sponsor will also acquire the trustee of
Viewgrand Trust C, Golden Shower Development (PTC) Limited after the Listing Date.
Property Vendor Master Lessee or Tenant
Hotel
InterContinental Singapore BCH Hotel Investment
Pte Ltd
BCH Hotel Investment
Pte Ltd
Novotel Rockford Darling
Harbour
Viewgrand Trust B Viewgrand Trust C
Park International London Global-Link Investments Limited P I Hotel Management Limited
Best Western Cromwell London Global-Link Investments Limited P I Hotel Management Limited
ANA Crowne Plaza Kobe Excellence Prosperity
(Singapore) Pte. Ltd.
Hotel component: K. K.
Shinkobe Holding
Retail component:
Y.K. Toranomon Properties
The Westin Kuala Lumpur JBB Hotels Sdn. Bhd. JBB Hotels Sdn. Bhd.
Serviced Residence
Fraser Suites Singapore River Valley Apartments Pte
Ltd, River Valley Shopping
Centre Pte Ltd and River Valley
Tower Pte Ltd
River Valley Apartments
Pte Ltd
Fraser Suites Sydney Frasers Townhall Residences
Pty Ltd
Frasers Townhall Residences
Operations
Pty Ltd
Fraser Place Canary Wharf Fairdace Limited Fairdace Limited
Fraser Suites Queens Gate Queensgate Garden (C.I.)
Limited
39QGG Management Limited
Fraser Suites Glasgow Fairdace Limited Fairdace Limited
Fraser Suites Edinburgh Frasers (St Giles Street,
Edinburgh) Limited
Frasers (St Giles Street)
Management Limited
For the Hotels, the leasehold interest in each of Park International London and Best Western
Cromwell London (the UK Hotels) to be acquired by FH-REIT are in respect of a shorter
leasehold period than the length of the freehold titles held by the Vendor. Upon expiry of the
leasehold interests to be held by FH-REIT, title to the Hotels will revert to the Vendor.
For the Serviced Residences, the leasehold interest in each of the Serviced Residences is in
respect of a shorter leasehold period than the underlying title held by the relevant Vendor. Upon
expiry of the leasehold interest to be held by FH-REIT, title to the Serviced Residence will revert
to the relevant Vendor.
The Sale and Purchase Agreements
FH-REIT and its property-holding entities will each enter into a sale and purchase agreement to
acquire the Properties
1
(except for ANA Crowne Plaza and The Westin Kuala Lumpur) from the
Vendors (collectively, the Property Sale and Purchase Agreements).
1
In the case of Fraser Suites Sydney, this will be in the form of a lease agreement.
52
In relation to ANA Crowne Plaza Kobe, FH-REIT will acquire Excellence Prosperity TMK Pte. Ltd.
and a Singapore-incorporated subsidiary of FH-REIT will acquire Excellence Prosperity Japan
K.K. from Excellence Prosperity (Singapore) Pte. Ltd.
In relation to The Westin Kuala Lumpur, the special purpose vehicle incorporated in Malaysia
under the asset-backed securitisation (ABS) structure (the Malaysian SPV) will acquire The
Westin Kuala Lumpur from the Vendor. FHT Malaysia Pte. Ltd., a wholly-owned subsidiary of
FH-REIT, will subscribe for and hold Class B Junior MTNs and Class C Junior MTNs issued by the
Malaysian SPV.
FH-REIT (through its wholly-owned subsidiaries) will also acquire the FF&E in respect of each of
the Properties.
(See Overview of the Acquisition of the Properties for further details).
The Master Lease and Tenancy Agreements
Pursuant to the master lease agreement (the Master Lease Agreement) or tenancy agreement
(the Tenancy Agreement) to be entered into between FH-REIT and/or its property-holding entity
and the relevant Master Lessee or Tenant in respect of each of the Properties (collectively, the
Master Lease and Tenancy Agreements), FH-REIT or its property-holding entity will receive
rental payment for each Property from the relevant Master Lessee or Tenant comprising (i) a Fixed
Rent and (ii) a Variable Rent.
The term of the Master Lease and Tenancy Agreements for each of the Properties is set out in the
tables below:
Hotel Term of Master Lease or Tenancy (years)
InterContinental Singapore
20 + 20 years commencing from the Listing Date
(at the option of the Master Lessee)
Novotel Rockford Darling Harbour
Park International London
10 + 10 +10 +10 years commencing from the Listing
Date (at the option of the Master Lessee)
Best Western Cromwell London
ANA Crowne Plaza Kobe 10 years commencing from the Listing Date
(fixed and non-renewable)
The Westin Kuala Lumpur Three + three + three years commencing from the
Listing Date (at the option of the Tenant)
Serviced Residence Term of Master Lease (years)
Fraser Suites Singapore
20 + 20 years commencing from the Listing Date
(at the option of the Master Lessee)
Fraser Suites Sydney
Fraser Place Canary Wharf
Fraser Suites Queens Gate
Fraser Suites Glasgow
Fraser Suites Edinburgh
53
The Master Lease Agreements each has an initial term of 20 years from the Listing Date with an
option exercisable by the Master Lessee to obtain an additional lease for a further 20 years on the
same terms and conditions (save for amendments required due to any change in law), except in
respect of the following Hotels:
(i) the Master Lease Agreement in respect of ANA Crowne Plaza Kobe, which will be for a fixed
and non-renewable term of 10 years from the Listing Date; and
(ii) the Master Lease Agreement in respect of each of Park International London and Best
Western Cromwell London, which will be for an initial term of 10 years from the Listing Date
with an option exercisable by the Master Lessee to obtain an additional lease for a further
10-year term on the same terms and conditions as the initial 10-year term and including an
option to renew for two further successive 10-year terms.
In respect of The Westin Kuala Lumpur, the Tenancy will be converted into a lease with an initial
term of 20 years with an option for the lessee to obtain an additional lease for a further 20 years
on the same terms and conditions as the Tenancy Agreement (save for amendments required due
to any change in law)
1
. (See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the
Properties Agreements relating to The Westin Kuala Lumpur Tenancy Agreement for further
details.)
The Master Lessees or Tenant will appoint professional hotel managers or serviced residence
operators (as the case may be) to manage the day-to-day operations and marketing of the
Properties.
In respect of ANA Crowne Plaza Kobe, FH-REIT, through the ANA Crowne Plaza Kobe Trustee,
will on the Listing Date enter into a master lease with Y.K. Toranomon Properties in respect of the
retail component (the Retail Master Lease Agreement). The Retail Master Lease Agreement
has a perpetual lease term and cannot be unilaterally terminated by FH-REIT
2
. Pursuant to the
share purchase agreement between Excellence Prosperity (Singapore) Pte. Ltd. and the REIT
Trustee entered into on 23 June 2014 (the EPTMK Share Purchase Agreement) in respect of
the acquisition of the entire issued share capital of Excellence TMK Pte. Ltd.
3
, in the event of the
1
Within 14 business days from the commencement date of the Tenancy Agreement, JBB Hotels Sdn Bhd is obliged
to apply for the approval of the relevant state authority on the conversion of the tenancy into a lease for 20 years
with an option for the lessee to obtain an additional lease for a further 20 years. (See Certain Agreements Relating
to FHT, FH-REIT, FH-BT and the Properties Agreements Relating to The Westin Kuala Lumpur Tenancy
Agreement.)
2
The appraised value of ANA Crowne Plaza Kobe by both Colliers and CBRE and, accordingly, the purchase
consideration to be paid by FH-REIT, has excluded the retail component in light of the terms of the Retail Master
Lease Agreement (under which the master lessee assumes the economic benefits and losses attributable to the
retail component).
The retail component currently has a low occupancy rate, and the cashflows and the performance of the retail
component have yet to stabilise. In order to insulate Stapled Securityholders from the costs involved in the major
repositioning works required, operational uncertainty and unstable cashflows, FH-REIT has entered into the Retail
Master Lease Agreement pursuant to which the master lessee will reimburse FH-REIT for costs incurred by FH-REIT
arising from its legal ownership of the retail component, while the master lessee assumes both the economic
benefits and losses attributable to the retail component.
Given that the terms of the Retail Master Lease Agreement are beneficial to FH-REIT as well as any subsequent
purchaser and owner of the Property, the perpetual term should not adversely affect FH-REITs ability to sell the
Property subject to the Retail Master Lease Agreement. In the event that a purchaser proposes to acquire the
Property free of the Retail Master Lease Agreement, the master lessor and master lessee can agree to terminate
the Retail Master Lease Agreement.
Accordingly, the REIT Manager is of the view that the Retail Master Lease Agreement will not pose any material
adverse effect on the ability of FH-REIT to sell the Property whether subject to or without the Retail Master Lease
Agreement.
3
Excellence TMK Pte. Ltd. holds 49.5% of the preferred shares and 100.0% of the specified shares issued by Kobe
Excellence TMK. Kobe Excellence TMK holds the TBI in ANA Crowne Plaza Kobe.
54
termination of Retail Master Lease Agreement, the REIT Trustee shall pay to Excellence
Prosperity (Singapore) Pte. Ltd. a sum of a value to be mutually agreed between the parties and
the value shall take into consideration the discounted cash-flow valuation of the underlying retail
leases.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties for further
details.)
The Master Serviced Residence Management Agreement and Master Serviced Residence
Licence Agreement
1
The REIT Trustee and the Managers will enter into an agreement with the Sponsor and Frasers
Hospitality Pte. Ltd. (the Master Serviced Residence Management Agreement), whereby the
Managers may elect to pay the Serviced Residence Operators fees in cash, Stapled Securities or
a combination of both (as the Managers may in their sole discretion determine) for the services
rendered pursuant to the agreement and the individual serviced residence management
agreements entered into with the relevant master lessees and the Serviced Residence Operators
(collectively, the Serviced Residence Management Agreements).
The REIT Trustee and the Managers will enter into an agreement with the Sponsor and Frasers
Hospitality Pte. Ltd. (the Master Serviced Residence Licence Agreement), whereby the
Managers may elect to pay the Serviced Residence Operators fees for the licence of, inter alia,
the relevant marks in cash, Stapled Securities or a combination of both (as the Managers may in
their sole discretion determine) pursuant to the agreement and the individual serviced residence
licence agreements entered into with the relevant master lessees and the Serviced Residence
Operators (collectively, the Serviced Residence Licence Agreements).
FH-REIT is responsible for payment of the fees to the Serviced Residence Operators under the
Serviced Residence Management Agreements and the Serviced Residence Licence Agreements
as the payments due from the Master Lessees to FH-REIT under the respective Master Lease
Agreements in respect of the Serviced Residences are made gross of such fees because such
fees are not included as part of the Master Lessees operating expenses.
1
The Master Serviced Residence Management Agreement applies in respect of properties acquired by FHT if the
Sponsor group is to be appointed as the master lessee of such serviced residence. Accordingly, this applies to the
Serviced Residences which comprise the Initial Portfolio as well as future serviced residence assets to be acquired
by FHT post-listing. Accordingly, pursuant to the terms of the Master Serviced Residence Management Agreement,
an individual serviced residence management agreement will need to be entered into in respect of each serviced
residence asset that is owned by FHT and managed by the Sponsor group. Consequently, there will be six Individual
Serviced Residence Management Agreements for the six Serviced Residences comprising the Initial Portfolio. There
will be no double counting of fees, i.e. there will only be one set of fees payable under the individual serviced
residence management agreement in respect of one asset. The Master Serviced Residence Management
Agreement is intended to set out the cap on the fees payable to the Sponsor group appointed as the serviced
residence operator. However, parties are free to agree to any lower fee in the individual serviced residence
management agreement itself.
The Master Serviced Residence Licence Agreement applies in respect of properties acquired by FHT and if the
Sponsor group is appointed as the master lessee and serviced residence operator pursuant to the Master Serviced
Residence Management Agreement. Accordingly, this applies to the Serviced Residences which comprise the Initial
Portfolio as well as future serviced residence assets to be acquired by FHT post-listing and managed by the Sponsor
group. Accordingly, pursuant to the terms of the Master Serviced Residence Licence Agreement, an individual
serviced residence licence agreement will need to be entered into in respect of each serviced residence asset that
is owned by FHT and managed by the Sponsor group. Consequently, there will be six Individual Serviced Residence
Licence Agreements for the six Serviced Residences comprising the Initial Portfolio. There will be no double
counting of fees, i.e. there will only be one set of fees payable under the individual serviced residence licence
agreement in respect of one asset. The Master Serviced Residence Licence Agreement is intended to set out he cap
on the fees payable to the Sponsor group appointed as the serviced residence operator. However, parties are free
to agree to any lower fee in the individual serviced residence licence agreement itself.
55
The Master Technical Services Agreement
1
The REIT Trustee and the Managers will enter into an agreement with the Sponsor and Frasers
Hospitality Pte. Ltd. (the Master Technical Services Agreement), whereby the Serviced
Residence Operators will, pursuant to the agreement and the individual technical services
agreements entered into with the relevant master lessees and the Serviced Residence Operators,
advise the relevant master lessees on the conceptualising, planning, design, construction,
decoration, furnishing and equipping of each of the Serviced Residences in connection with any
development, re-development, refurbishment, retrofitting, addition and alteration and renovations
works (collectively, the Technical Services Agreements).
The Hotel Managers
The Hotel Managers will provide, among others and subject to the terms of the respective hotel
management agreements, the following services for the Hotels:
management services such as the daily running and managing of the Hotels and related
activities (e.g. the management of banquet and function rooms, food and beverage (F&B)
services, laundry services etc.);
marketing services, including the planning, preparation and conduct of marketing,
advertising, promotion, public relations, publicity and related activities for the purpose of
promoting the business and enhancing the reputation of each Hotel;
sales and distribution activities, including signing corporate accounts, running a central
reservation system, managing a booking engine on the internet, contracting with online travel
agents and wholesalers, and signing up with a global distribution system to make the hotel
room inventory available to agents worldwide;
development of programmes and policies to maximise patronage of the facilities of each
Hotel;
collecting charges, rents and other amounts due from guests, patrons and tenants;
employing, supervising and training the hospitality employees and staff required to operate,
manage, market and maintain the Hotel in accordance with the annual budget agreed with
each Master Lessee or Tenant;
establishing the details of the refurbishment plans for each Hotel, in consultation with each
Master Lessee or Tenant;
preparing the annual business plans of the Hotels, including the annual budget and
marketing strategy;
negotiating new or renewing lease/licence agreements;
1
The Master Technical Services Agreement applies in respect of all properties held by FHT for so long as the Sponsor
group is to be appointed as the master lessee of such serviced residence. Accordingly, this applies to the Serviced
Residences which comprise the Initial Portfolio, as well as future serviced residence assets to be acquired by FHT
post-listing. Consequently, it is currently intended that there will be six Individual Technical Services Agreements for
the six Serviced Residences comprising the Initial Portfolio. However, the technical services fees shall only be
payable when technical services are provided. There will be no double counting of fees, i.e. there will only be one
set of fees payable under the individual technical services agreement in respect of one asset. The Master Technical
Services Agreement is intended to set out the cap on the fees payable to the Sponsor group appointed as the
provider of such technical services. However, the parties are free to agree to any lower fee in the individual technical
services agreement itself.
56
establishing the cash management and banking arrangements for the Hotels;
establishing each Hotels policy regarding its association with any credit card system; and
allowing its existing brands to be used on the Hotels.
The Serviced Residence Operators
The Serviced Residence Operators will provide, among others, the following services for the
Serviced Residences:
management services such as the daily running and managing of the Serviced Residences
and related activities (e.g. the management of meeting rooms, F&B services, laundry
services etc.);
marketing services, including the planning, preparation and conduct of marketing,
advertising, promotion, public relations, publicity and related activities for the purpose of
promoting the business and enhancing the reputation of each Serviced Residence;
sales and distribution activities, including signing corporate accounts, running a central
reservation system, managing a booking engine on the internet, contracting with online travel
agents and wholesalers, and signing up with a global distribution system to make the
serviced residence inventory available to agents worldwide;
development of programmes and policies to maximise patronage of the facilities of each
Serviced Residence;
collecting charges, rents and other amounts due from guests, patrons and tenants;
employing, supervising and training the hospitality employees and staff required to operate,
manage, market and maintain the Serviced Residences in accordance with the annual
budget agreed with each Master Lessee;
establishing the details of the refurbishment plans for each Serviced Residence, in
consultation with each Master Lessee;
preparing the annual business plans of the Serviced Residences, including the annual
budget and marketing strategy;
negotiating new or renewed lease/licence agreements;
establishing the cash management and banking arrangements for the Serviced Residences;
establishing each Serviced Residences policy regarding its association with any credit card
system; and
allowing its existing brands to be used on the Serviced Residences.
57
CERTAIN FEES AND CHARGES
The following is a summary of the amounts of certain fees and charges payable by Stapled
Securityholders in connection with the subscription for the Stapled Securities (so long as the
Stapled Securities are listed):
Payable by Stapled Securityholders
directly Amount payable
(a) Subscription fee or preliminary charge N.A.
(1)
(b) Realisation fee N.A.
(1)
(c) Switching fee N.A.
(1)
(d) Any other fee Investors in the Placement Tranche may be
required to pay brokerage of up to 1.0% of the
Offering Price. For trading of the Stapled
Securities, investors will pay prevailing
brokerage commissions (if applicable) and CDP
clearing fee for trading of the Stapled Securities
on the SGX-ST at the rate of 0.04% of the
transaction value, subject to a maximum of
S$600.00 per transaction and Goods and
Services Tax (GST) chargeable thereon.
(2)
Notes:
(1) As the Stapled Securities will be listed and traded on the SGX-ST, and Stapled Securityholders will have no right
to request the REIT Manager or the Trustee-Manager to redeem their Stapled Securities (or, for that matter, any
corresponding FH-REIT Units and FH-BT Units) while the Stapled Securities are listed, no subscription fee,
preliminary charge, realisation fee or switching fee is payable in respect of the Stapled Securities.
(2) SGX-ST has announced a reduction in CDP clearing fee for trading of the Stapled Securities on the SGX-ST to
0.0325% of the transaction value, subject to applicable GST. The cap of S$600.00 per transaction will also be
removed. This revision has taken effect from 1 June 2014.
The following is a summary of certain fees and charges payable by FH-REIT in connection with
the establishment and on-going management of the operations of FH-REIT (see Management
and Corporate Governance for further details):
Payable by FH-REIT Amount payable
(a) The REIT Managers management fees Base Fee
0.3% per annum of the value of gross assets of
FH-REIT, including all the Authorised
Investments (as defined in the FH-REIT Trust
Deed and the Stapling Deed) of FH-REIT for
the time being held or deemed to be held by
FH-REIT under the FH-REIT Trust Deed (the
FH-REIT Deposited Property).
58
Payable by FH-REIT Amount payable
Performance Fee
5.5% per annum of the aggregate Distributable
Income of FHT in the relevant financial year
(calculated before accounting for the REIT
Performance Fee and the BT Performance Fee
but after accounting for the REIT Base Fee and
the BT Base Fee).
There should be no double-counting of fees. In
the event that both the REIT Manager and the
Trustee-Manager are entitled to the
Performance Fee, such fees payable to both
the REIT Manager and the Trustee-Manager
will be apportioned based on the respective
proportionate contributions of FH-REIT and
FH-BT in the Performance Fee
1
. For the
avoidance of doubt, the maximum Performance
Fee payable to both the REIT Manager and the
Trustee-Manager collectively is 5.5% per
annum of the aggregate Distributable Income of
FHT in the relevant financial year (calculated
before accounting for the Performance Fee but
after accounting for the Base Fee).
The REIT Manager may elect to receive the
Base Fee and the Performance Fee in cash or
Stapled Securities or a combination of cash and
Stapled Securities (as it may in its sole
discretion determine).
For Forecast Period 2014 and Projection Year
2015, the REIT Manager has elected to receive
100.0% of the Base Fee and 100.0% of the
Performance Fee in the form of Stapled
Securities.
For the purpose of calculating the Base Fee, if
FH-REIT holds only a partial interest in any
FH-REIT Deposited Property, such FH-REIT
Deposited Property shall be pro-rated in
proportion to the partial interest held.
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
59
Payable by FH-REIT Amount payable
(b) The REIT Trustees fee The REIT Trustees fee is presently charged on
a scaled basis of up to 0.015% per annum of
the value of the FH-REIT Deposited Property,
subject to a minimum of S$15,000 per month,
excluding out-of-pocket expenses and GST.
The actual fee payable will be determined
between the REIT Manager and the REIT
Trustee from time to time.
Under the FH-REIT Trust Deed, the maximum
fee which the REIT Trustee may charge is
0.015% per annum of the value of the FH-REIT
Deposited Property. Any increase in the REIT
Trustees fee beyond the current scaled basis
but subject to the maximum permitted amount
of up to 0.015% per annum of the value of the
FH-REIT Deposited Property will be subject to
agreement between the REIT Manager and the
REIT Trustee.
(c) Any other substantial fee or charge (i.e.
0.1% or more of the value of the FH-
REIT Deposited Property)
(i) Acquisition fee (payable to the
REIT Manager)
1
0.5% for acquisitions from Related Parties and
1.0% for all other cases (or such lower
percentage as may be determined by the REIT
Manager in its absolute discretion) of any of the
following as is applicable (subject to there
being no double-counting):
(i) the acquisition price of any real estate
purchased by FH-REIT, whether directly or
indirectly through a holding of shares,
units or any other interests in one or more
special purpose vehicles (SPVs), plus
any other payments
2
in addition to the
acquisition price made by FH-REIT or its
SPV to the vendor in connection with the
purchase of the real estate (pro-rated if
applicable to the proportion of FH-REITs
interest);
1
No acquisition fee is payable for the transfer of assets from FH-BT.
2
other payments refer to additional payments to the vendor of the real estate, for example, where the vendor has
already made certain payments for enhancements to the real estate, and the value of the asset enhancements is
not reflected in the acquisition price as the asset enhancements are not completed, but other payments do not
include stamp duty or other payments to third party agents and brokers.
60
Payable by FH-REIT Amount payable
(ii) the underlying value
1
of any real estate
which is taken into account when
computing the acquisition price payable
for the equity interests of any vehicle
holding directly or indirectly the real
estate, purchased by FH-REIT whether
directly or indirectly through a holding of
shares, units or any other interests in one
or more SPVs (plus any other payments
made by FH-REIT or its SPVs to the
vendor in connection with the purchase of
such equity interests) (pro-rated, if
applicable to the proportion of FH-REITs
interest); or
(iii) the acquisition price of any investment
purchased by FH-REIT, whether directly or
indirectly through one or more SPVs, in
any debt securities of any property
corporation or other SPV owning or
acquiring real estate or any debt securities
which are secured whether directly or
indirectly by the rental income from real
estate.
For the avoidance of doubt, the acquisition
price, or as the case may be, the acquisition
value, shall take into account any price or value
adjustment to be made post-completion (and
the acquisition fee payable to the REIT
Manager will be adjusted upwards or
downwards, as applicable).
No acquisition fee is payable for the acquisition
of the Properties.
The acquisition fee is payable to the REIT
Manager in the form of cash and/or Stapled
Securities or, as the case may be, FH-REIT
Units (as the REIT Manager may elect)
provided that in respect of any acquisition of
real estate assets from Related Parties, such a
fee should be in the form of Stapled Securities
or, as the case may be, FH-REIT Units at
prevailing market price(s) instead of cash.
1
For example, if FH-REIT acquires a special purpose company which holds real estate, such underlying value would
be the value of the real estate derived from the amount of equity paid by FH-REIT as purchase price and any debt
of the special purpose company.
61
Payable by FH-REIT Amount payable
The Stapled Securities or, as the case may be,
FH-REIT Units issued to the REIT Manager as
its acquisition fee should not be sold within one
year from the date of their issuance.
Any payment to third party agents or brokers in
connection with the acquisition of any assets of
FH-REIT shall be paid to such persons out of
the FH-REIT Deposited Property or the assets
of the relevant entity and not out of the
acquisition fee received or to be received by the
REIT Manager.
(ii) Divestment fee (payable to the
REIT Manager)
1
0.5% of each of the following as is applicable
(subject to there being no double-counting):
(i) the sale price of any real estate sold or
divested by FH-REIT, whether directly or
indirectly through one or more SPVs, plus
any other payments
2
in connection with
the sale or divestment of the real estate
(pro-rated if applicable to the proportion of
FH-REITs interest);
(ii) the underlying value
3
of any real estate
which is taken into account when
computing the sale price for the equity
interests in any vehicle holding directly or
indirectly the real estate, sold or divested
by FH-REIT, whether directly or indirectly
through one or more SPVs, plus any other
payments received by the FH-REIT or its
SPVs from the purchaser in connection
with the sale or divestment of such equity
interests (pro-rated if applicable to the
proportion of FH-REITs interest); or
1
No divestment fee is payable for the transfer of assets to FH-BT.
2
other payments refer to additional payments to FH-REIT or its SPVs for the sale of the real estate, for example,
where FH-REIT or its SPVs have already made certain payments for enhancements to the real estate, and the value
of the asset enhancements are not reflected in the sale price as the asset enhancements are not completed, but
other payments do not include stamp duty or other payments to third party agents and brokers.
3
For example, if FH-REIT sells or divests a special purpose company which holds real estate, such underlying value
would be the value of the real estate derived from the amount of equity received by FH-REIT as sale price and any
debt of the special purpose company.
62
Payable by FH-REIT Amount payable
(iii) the sale price of the investment sold or
divested by FH-REIT, whether directly or
indirectly through one or more SPVs, in
any debt securities of any property
corporation or other SPV owning or
acquiring real estate or any debt securities
which are secured whether directly or
indirectly by the rental income from real
estate.
For the avoidance of doubt, the sale price, or as
the case may be, the sale value, shall take into
account any price or value adjustment to be
made post-completion (and the divestment fee
payable to the REIT Manager will be adjusted
upwards or downwards, as applicable).
The divestment fee is payable to the REIT
Manager in the form of cash and/or Stapled
Securities or, as the case may be, FH-REIT
Units (as the REIT Manager may elect)
provided that in respect of any sale or
divestment of real estate assets to Related
Parties, such a fee should be in the form of
Stapled Securities or, as the case may be,
FH-REIT Units at prevailing market price(s)
instead of cash.
The Stapled Securities or, as the case may be,
FH-REIT Units issued to the REIT Manager as
its divestment fee should not be sold within one
year from the date of their issuance.
Any payment to third party agents or brokers in
connection with the acquisition of any assets of
FHT shall be paid to such persons out of the
FH-REIT Deposited Property or the assets of
the relevant entity and not out of the acquisition
fee received or to be received by the REIT
Manager.
63
Payable by FH-REIT Amount payable
(iii) Development management fee
(payable to the REIT Manager)
The REIT Manager is entitled to receive
development management fees equivalent to
3.0% of the Total Project Costs incurred in a
Development Project (each as defined herein)
undertaken by the REIT Manager on behalf of
FH-REIT. FH-REIT will only undertake
development activities within the limits of the
Property Funds Appendix (which currently
allows a REIT to commit no more than 10.0% of
its deposited property to development and
investment in uncompleted property
developments).
Development Project, in relation to FH-REIT,
means a project involving the development of
land, or buildings, or part(s) thereof on land
which is acquired, held or leased by FH-REIT,
including major development, re-development,
refurbishment, retrofitting, addition and
alteration and renovations works, provided
always that the Property Funds Appendix shall
be complied with for the purposes of such
development.
When the estimated Total Project Costs are
greater than S$200.0 million
1
, the REIT Trustee
and the REIT Managers independent directors
will first review and approve the quantum of the
development management fee, whereupon the
REIT Manager may be directed to reduce the
development management fee. Further, in
cases where the market pricing for comparable
services is, in the REIT Managers view,
materially lower than the development
management fee, the REIT Manager will have
the discretion to accept a development
management fee which is less than 3.0% of the
Total Project Costs incurred in a Development
Project undertaken by the REIT Manager on
behalf of FH-REIT.
No acquisition fee shall be paid when the REIT
Manager receives the development management
fee for a Development Project. For the avoidance
of doubt, as land costs will not be included in the
computation of Total Project Costs, the REIT
Manager shall be entitled to receive an acquisition
fee on the land costs.
1
The threshold of S$200.0 million is derived by the Managers based on industry estimates that the development costs
of hospitality real estate assets are generally greater than development costs compared to other types of real estate
asset class.
64
Payable by FH-REIT Amount payable
(d) Fees payable to other asset managers In the event that the REIT Manager appoints or,
the REIT Trustee or any entity which is held by
FH-REIT (whether wholly or partially) at the
recommendation of the REIT Manager,
appoints an asset manager, investment
managers or any other entities (including
related entities of the Managers) (the FH-REIT
Relevant Entity) to provide asset
management services or investment
management services in respect of any asset of
FH-REIT, the FH-REIT Relevant Entity shall be
entitled to receive out of the FH-REIT
Deposited Property, a fee for its services to be
paid either directly (by the REIT Trustee) or
indirectly (by the entity which is held by
FH-REIT) (the FH-REIT Relevant Fee),
provided that the relevant fee payable to the
REIT Manager shall be reduced by the FH-
REIT Relevant Fee to the extent that such
FH-REIT Relevant Fee relates to asset
management fee, acquisition fee, divestment
fee and development management fee.
The terms and mechanics for the payment of
the FH-REIT Relevant Fee shall be set out in
the agreement appointing the FH-REIT
Relevant Entity.
For the avoidance of doubt, any other relevant
fee not related to asset management fee,
acquisition fee, divestment fee and
development management fee shall not reduce
the fees payable to the REIT Manager. The fees
which reduce the fees payable to the REIT
Manager relate primarily to fees arising from
the performance of services which is within the
scope of duties of the REIT Manager so as to
prevent the double-charging of fees.
(i) The Australian Properties
(payable to FHT Australia
Management Pty Ltd and reducing
the fees paid to the REIT
Manager)
The fees payable to FHT Australia Management
Pty Ltd (the MIT Manager) under the
Investment Management Agreement for MIT
Australia comprises the following:
(i) a base fee of 0.3% per annum of the total
value of MIT Australias trust property;
(ii) a performance fee of 5.5% per annum of
MIT Australias earnings before interest,
taxes, depreciation and amortisation;
65
Payable by FH-REIT Amount payable
(iii) an acquisition fee of 0.5% of the
acquisition price or value of acquisitions of
real estate and certain other investments
(as applicable) acquired by MIT Australia
or a MIT Sub-trust from Related Parties
and 1.0% for all other cases;
(iv) a divestment fee of 0.5% of the sale price
or underlying value of any real estate and
certain other investments sold or divested
by MIT Australia or a MIT Sub-trust; and
(v) a development management fee of 3.0%
of the Total Project Costs incurred in a
Development Project undertaken on
behalf of MIT Australia or a MIT Sub-Trust.
Except for the development management fee
(which may only be paid in cash), the fees are
payable to the MIT Manager in the form of cash
and/or Stapled Securities (as the MIT Trustee
may elect subject to and in accordance with the
directions of the REIT Manager and the
Trustee-Manager).
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Agreements Relating to the Australian
Properties for further details.)
(ii) ANA Crowne Plaza Kobe (payable
to Secured Capital Investment
Management Co., Ltd. and (in the
case of the annual management
fee only) reducing the fees paid to
the REIT Manager)
The fees payable by Kobe Excellence TMK to
Secured Capital Investment Management Co.,
Ltd. in its capacity as the asset manager of ANA
Crowne Plaza Kobe (the Kobe Asset
Manager) in respect of the hotel component
under the Asset Management Agreement (as
defined herein) are as follows:
(i) an annual management fee of JPY14.0
million (exclusive of consumption tax);
and
66
Payable by FH-REIT Amount payable
(ii) where the disposition of ANA Crowne
Plaza Kobe (or any part thereof, directly or
indirectly, including the disposition of the
equity shares in Kobe Excellence TMK or
any restructuring involved in the
disposition) occurs, Kobe Excellence TMK
shall pay to the Kobe Asset Manager an
additional fee (Additional Fee), which
shall be determined at the time of the
disposition based on consultation
between the parties on good faith, for the
additional services rendered by the Kobe
Asset Manager for the disposition,
provided that no disposition fee is payable
to the Kobe Asset Manager for the
disposition of ANA Crowne Plaza Kobe as
part of the Listing; and
(iii) a brokerage services fee for brokerage
services (the Brokerage Services Fee)
rendered by the Kobe Asset Manager for
the disposition of ANA Crowne Plaza Kobe
(or any part thereof, directly or indirectly,
including the disposition of the equity
shares in Kobe Excellence TMK or any
restructuring involved in the disposition),
the amount of which shall be determined
at the time of the disposition based on
consultation between the parties on good
faith, payable separately from the
Additional Fee, upon the completion of the
disposition through the brokerage
services provided by the Kobe Asset
Manager.
For the avoidance of doubt, the Additional Fee
and the Brokerage Services Fee shall not
reduce or offset any fees payable to the REIT
Manager.
In respect of the retail component, the asset
management fees are paid directly by Y.K.
Toranomon Properties to the Kobe Asset
Manager and will not be paid out of the assets
of FH-REIT. (See Certain Agreements Relating
to FHT, FH-REIT, FH-BT and the Properties
Agreements Relating to ANA Crowne Plaza
Kobe for further details.)
67
Payable by FH-REIT Amount payable
(iii) The Westin Kuala Lumpur
(payable to the REIT Manager as
the servicer under the ABS
structure (Servicer) and
reducing the fees paid to the REIT
Manager by FH-REIT)
In connection with the ABS structure under
which The Westin Kuala Lumpur is held,
pursuant to a servicing agreement entered into
by the Malaysian SPV, the REIT Manager (as
the servicer under the ABS structure) and the
bond trustee (in its capacity as trustee for the
holders of the MTNs) (the ABS Servicing
Agreement), a Servicer fee of MYR360,000
per annum is payable to the REIT Manager for
the provision of its services as Servicer under
the ABS Servicing Agreement.
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Agreements Relating to The Westin Kuala
Lumpur for further details.)
For the avoidance of doubt, any fees paid by
FH-REIT or its subsidiary to the local asset
manager shall reduce the final amount of
the relevant fees received by the REIT
Manager, to the extent that such fees
relate to asset management fee, acquisition
fee, divestment fee and development
management fee.
(e) Fees payable to other third parties
(i) The Australian Properties
(payable to The Trust Company
(Australia) Limited)
The fee payable to The Trust Company
(Australia) Limited, which is the trustee of MIT
Australia (the MIT Trustee), under the trust
deed constituting MIT Australia (the MIT Trust
Deed) is AUD55,000 per annum plus goods
and services tax (to be adjusted annually by
reference to the Australian CPI).
The MIT Trustee is also entitled to recover from
the property of MIT Australia all out-of pocket
expenses reasonably and properly incurred in
the proper performance of its duties in relation
to MIT Australia and may also be entitled to
receive additional fees with respect to activities
outside the normal day-to-day role of acting as
trustee.
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Agreements Relating to the Australian
Properties for further details.)
68
Payable by FH-REIT Amount payable
(ii) The Australian Properties
(payable to The Trust Company
(PTAL) Limited)
The fee payable to The Trust Company (PTAL)
Limited, which is the trustee of each of the two
MIT sub-trusts (the MIT Sub-trustee), is
AUD15,000 per annum per sub-trust plus
goods and services tax (to be adjusted annually
by reference to the Australian CPI).
The MIT Sub-trustee is also entitled to recover
from the property of each MIT Sub-trust all
out-of pocket expenses reasonably and
properly incurred in the proper performance of
its duties in relation to the relevant MIT Sub-
trust and may also be entitled to receive
additional fees with respect to activities outside
the normal day-to-day role of acting as trustee.
As there are two MIT sub-trusts, the aggregate
fee payable to the MIT Sub-trustee is
AUD30,000 per annum plus goods and services
tax (subject to annual adjustments for
Australian CPI).
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Agreements Relating to the Australian
Properties for further details.)
(iii) ANA Crowne Plaza Kobe (payable
to Deutsche Trust Company
Limited Japan, (the ANA Crowne
Plaza Kobe Trustee)
The annual fees payable to the ANA Crowne
Plaza Kobe Trustee (which holds the legal title
to ANA Crowne Plaza Kobe in its capacity as
trustee), under a trust agreement dated 3
September 2009 (as amended and assigned)
between Kobe Excellence TMK and the ANA
Crowne Plaza Kobe Trustee (the Japan Trust
Agreement) is JPY5,400,000 per annum.
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Agreements Relating to ANA Crowne Plaza
Kobe for further details.)
(iv) The Westin Kuala Lumpur
(payable under the ABS structure
by the Malaysian SPV)
Under the ABS structure, certain other fees,
such as credit rating fees payable to the rating
agency, fees payable to parties such as the
bond trustee, the security trustee, the share
trustee, the facility agent, the central depository
and paying agent, and the administrator for the
respective services provided, amounting to an
aggregate of approximately MYR350,000 per
annum, are payable by the Malaysian SPV.
69
Payable by FH-REIT Amount payable
(f) Fees payable to Serviced Residence
Operators
(i) Management Services Fees
payable to Serviced Residence
Operators
The fees payable to the Serviced Residence
Operators under the Serviced Residence
Management Agreements are as follows:
(i) a base management fee of 1.0% per
annum of the gross operating revenue of
the Serviced Residences;
(ii) a marketing fee of 1.0% per annum of the
gross operating revenue of the Serviced
Residences; and
(iii) an incentive fee of 8.0% per annum of
gross operating profit of the Serviced
Residences.
The Serviced Residence Operators may
receive the Management Services Fees in cash
or Stapled Securities or a combination of cash
and Stapled Securities (as the Managers may
elect).
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties
Master Serviced Residence Management
Agreements for further details.)
(ii) Trademark Licence Fees payable
to Serviced Residence Operators
The trademark licence fee payable to the
Serviced Residence Operators under the
Serviced Residences Licence Agreement is
1.0% per annum of the gross operating revenue
of the Serviced Residences.
The Service Residence Operators may receive
the Trademark License Fees in cash or Stapled
Securities or a combination of cash and Stapled
Securities (as the Managers may elect).
For Forecast Period 2014 and Projection Year
2015, the Service Residence Operators have
elected to receive 100% of the Management
Services Fees and 100% of the Trademark
Licence Fees in the form of Stapled Securities.
70
Payable by FH-REIT Amount payable
(iii) Technical Services Fees payable
to Serviced Residence Operators
The technical services fees payable to Serviced
Residence Operators under the Master
Technical Services Agreements together with
the relevant Individual Technical Services
Agreement will be an amount to be mutually
agreed upon subject to a cap of US$1,500 per
serviced residence unit which is exclusive of
reimbursable expenses. The technical services
fees shall be payable when technical services
relating to conceptualising, planning,
designing, decorating, furnishing and equipping
serviced residences are provided in connection
with any development, re-development,
refurbishment, retrofitting, addition and
alteration and renovations works.
For the avoidance of doubt, the technical
services fees are not recurring fees and are
payable on a one-off basis when the above
services are provided.
Where a development management fee is
payable to the REIT Manager, there shall be no
technical services fees payable in respect of
the same project notwithstanding the technical
services provided.
(See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties Master
Technical Services Agreement for further
details.)
The following is a summary of certain fees and charges payable by FH-BT in circumstances where
FH-BT becomes active:
Payable by FH-BT Amount payable
(a) The Trustee-Managers management
fees
Base Fee
0.3% per annum of the value of the Trust
Property (as defined in the BTA) of FH-BT (the
FH-BT Trust Property).
Performance Fee
5.5% per annum of the aggregate Distributable
Income of FHT in the relevant financial year
(calculated before accounting for the REIT
Performance Fee and the BT Performance Fee
but after accounting for the REIT Base Fee and
the BT Base Fee).
71
Payable by FH-BT Amount payable
There should be no double-counting of fees. In
the event that both the Trustee-Manager and
the REIT Manager are entitled to the
Performance Fee, such fees payable to both
the Trustee-Manager and the REIT Manager
will be apportioned based on the respective
proportionate contributions of FH-REIT and
FH-BT in the Performance Fee
1
. For the
avoidance of doubt, the maximum Performance
Fee payable to both the Trustee-Manager and
the REIT Manager collectively is 5.5% per
annum of the aggregate Distributable Income of
FHT in the relevant financial year (calculated
before accounting for the Performance Fee but
after accounting for the Base Fee).
For the purpose of calculating the Base Fee, if
FH-BT holds only a partial interest in any
FH-BT Trust Property, such FH-BT Trust
Property shall be pro-rated in proportion to the
partial interest held.The management fee is
payable to the Trustee-Manager in the form of
cash and/or Stapled Securities or, as the case
may be, FH-BT Units (as the Trustee-Manager
may elect).
(b) The Trustee-Managers trustee fee 0.1% per annum of the value of the FH-BT Trust
Property subject to a minimum fee of S$10,000
per month, provided that the value of the FH-BT
Trust Property is at least S$50.0 million.
For the purpose of calculating the trustee fee, if
FH-BT holds only a partial interest in any of the
FH-BT Trust Property, such FH-BT Trust
Property shall be pro-rated in proportion to the
partial interest held.
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
72
Payable by FH-BT Amount payable
(c) Any other substantial fee or charge (i.e.
0.1% or more of the value of FH-BT
Trust Property)
(i) Acquisition fee (payable to the
Trustee-Manager)
1
0.5% for acquisitions from Related Parties and
1.0% for all other cases (or such lower
percentage as may be determined by the
Trustee-Manager in its absolute discretion) of
any of the following as is applicable (subject to
there being no double counting):
(i) in the case of an acquisition of real estate,
the acquisition price of any real estate
purchased by FH-BT, whether directly or
indirectly through one or more SPVs, plus
any other payments
2
in addition to the
acquisition price made by FH-BT or its
SPVs to the vendor in connection with the
purchase of the real estate (pro-rated if
applicable to the proportion of FH-BTs
interest);
(ii) in the case of an acquisition of the equity
interests of any vehicle holding directly or
indirectly the real estate, the underlying
value
3
of such real estate which is taken
into account when computing the
acquisition price payable for the equity
interests of any vehicle holding directly or
indirectly the real estate, purchased by
FH-BT, whether directly or indirectly
through one or more SPVs, plus any other
payments
4
made by FH-BT or its SPVs to
the vendor in connection with the
purchase of such equity interests (pro-
rated if applicable to the proportion of
FH-BTs interest); or
1
No acquisition fee is payable for the transfer of assets from FH-REIT.
2
other payments refer to additional payments to the vendor of the real estate, for example, where the vendor has
already made certain payments for enhancements to the real estate, and the value of the asset enhancements is
not reflected in the acquisition price as the asset enhancements are not completed, but other payments do not
include stamp duty or other payments to third party agents and brokers.
3
For example, if FH-BT acquires a special purpose company which holds real estate, such underlying value would
be the value of the real estate derived from the amount of equity paid by FH-BT as purchase price and any debt of
the special purpose company.
4
No divestment fee is payable for the transfer of assets to FH-REIT.
73
Payable by FH-BT Amount payable
(iii) the acquisition price of any investment
purchased by FH-BT, whether directly or
indirectly through one or more SPVs, in
any debt securities of any property
corporation or other SPV owning or
acquiring real estate or any debt securities
which are secured whether directly or
indirectly by the rental income from real
estate.
For the avoidance of doubt, the acquisition
price, or as the case may be, the acquisition
value, shall take into account any price or value
adjustment to be made post-completion (and
the acquisition fee payable to the Trustee-
Manager will be adjusted upwards or
downwards, as applicable).
The acquisition fee is payable to the Trustee-
Manager in the form of cash and/or Stapled
Securities or, as the case may be, FH-BT Units
as the Trustee-Manager may elect, and in such
proportion as may be determined by the
Trustee-Manager.
(ii) Divestment fee (payable to the
Trustee-Manager)
1
0.5% of any of the following as is applicable
(subject to there being no double-counting):
(i) the sale price of any real estate sold or
divested by FH-BT, whether directly or
indirectly through one or more SPVs, plus
any other payments
2
in connection with
the sale or divestment of the real estate
(pro-rated if applicable to the proportion of
FH-BTs interest);
1
No divestment fee is payable for the transfer of assets to FH-REIT.
2
Other payments refer to additional payments to FH-BT or its SPVs for the sale of the real estate, for example,
where FH-BT or its SPVs have already made certain payments for enhancements to the real estate, and the value
of the asset enhancements are not reflected in the sale price as the asset enhancements are not completed, but
other payments do not include stamp duty or other payments to third party agents and brokers.
74
Payable by FH-BT Amount payable
(ii) the underlying value
1
of any real estate
which is taken into account when
computing the sale price for the equity
interests in any vehicle holding directly or
indirectly the real estate, sold or divested
by FH-BT, whether directly or indirectly
through one or more SPVs, plus any other
payments
1
received by the FH-BT or its
SPVs from the purchaser in connection
with the sale or divestment of such equity
interests (pro-rated if applicable to the
proportion of FH-BTs interest); or
(iii) the sale price of the investment purchased
by FH-BT, whether directly or indirectly
through one or more SPVs, in any debt
securities of any property corporation or
other SPV owning or acquiring real estate
or any debt securities which are secured
whether directly or indirectly by the rental
income from real estate.
For the avoidance of doubt, the sale price, or as
the case may be, the sale value, shall take into
account any price or value adjustment to be
made post-completion (and the divestment fee
payable to the Trustee-Manager will be
adjusted upwards or downwards, as
applicable).
The divestment fee is payable to the Trustee-
Manager in the form of cash and/or Stapled
Securities or, as the case may be, FH-BT Units
as the Trustee-Manager may elect, and in such
proportion as may be determined by the
Trustee-Manager.
1
For example, if FH-BT sells or divests a special purpose company which holds real estate, such underlying value
would be the value of the real estate derived from the amount of equity received by FH-BT as sale price and any
debt of the special purpose company.
75
Payable by FH-BT Amount payable
(iii) Development management fee
(payable to the Trustee-Manager)
The Trustee-Manager is entitled to receive
development management fees equivalent to
3.0% of the Total Project Costs incurred in a
Development Project (as defined herein)
undertaken by the Trustee-Manager on behalf
of FH-BT.
Development Project, in relation to FH-BT,
means a project involving the development of
land, or buildings, or part(s) thereof on land
which is acquired, held or leased by FH-BT,
including major development, re-development,
refurbishment, retrofitting, addition and
alteration and renovations works.
When the estimated Total Project Costs are
greater than S$200.0 million
1
, the Trustee-
Managers independent directors will first
review and approve the quantum of the
development management fee, whereupon the
Trustee-Manager may be directed to reduce the
development management fee. Further, in
cases where the market pricing for comparable
services is, in the Trustee-Managers view,
materially lower than the development
management fee, the Trustee-Manager will
have the discretion to accept a development
management fee which is less than 3.0% of the
Total Project Costs incurred in a Development
Project undertaken by the Trustee-Manager on
behalf of FH-BT.
No acquisition fee shall be paid when the
Trustee-Manager receives the development
management fee for a Development Project.
For the avoidance of doubt, as land costs will
not be included in the computation of Total
Project Costs, the Trustee-Manager shall be
entitled to receive an acquisition fee on the land
costs.
1
The threshold of S$200.0 million is derived by the Managers based on industry estimates that the development costs
of hospitality real estate assets are generally greater than development costs compared to other types of real estate
asset class.
76
Payable by FH-BT Amount payable
(d) Fees payable to other asset managers In the event that the Trustee-Manager appoints
or, any entity which is held by FH-BT (whether
wholly or partially) at the recommendation of
the Trustee-Manager, appoints an asset
manager, investment managers or any other
entities (including related entities of the
Managers) (the FH-BT Relevant Entity) to
provide asset management services or
investment management services in respect of
any asset of FH-BT, the FH-BT Relevant Entity
shall be entitled to receive out of the FH-BT
Trust Property, a fee for its services to be paid
either directly (by the Trustee-Manager) or
indirectly (by the entity which is held by FH-BT)
(the FH-BT Relevant Fee), provided that the
relevant fee payable to the Trustee-Manager
shall be reduced by the FH-BT Relevant Fee to
the extent that such FH-BT Relevant Fee
relates to asset management fee, acquisition
fee, divestment fee and development
management fee.
The terms and mechanics for the payment of
the FH-BT Relevant Fee shall be set out in the
agreement appointing the FH-BT Relevant
Entity.
In the event that FH-BT puts into place a
managed investment scheme similar to that of
FH-REIT, any fees payable to the investment
manager will reduce the corresponding fees
payable to the Trustee-Manager.
For the avoidance of doubt, any other
relevant fee not related to asset
management fee, acquisition fee,
divestment fee and development
management fee shall not reduce the fees
payable to the Trustee-Manager. The fees
which reduce the fees payable to the
Trustee-Manager relate primarily to fees
arising from the performance of services
which is within the scope of duties of the
Trustee-Manager so as to prevent the
double-charging of fees.
77
THE OFFERING
FHT Frasers Hospitality Trust, a hospitality stapled group
comprising FH-REIT and FH-BT.
FH-REIT Frasers Hospitality Real Estate Investment Trust, a real
estate investment trust constituted by the FH-REIT Trust
Deed.
FH-BT Frasers Hospitality Business Trust, a business trust
constituted by the FH-BT Trust Deed.
The REIT Manager Frasers Hospitality Asset Management Pte. Ltd.
The REIT Trustee The Trust Company (Asia) Limited
The Trustee-Manager Frasers Hospitality Trust Management Pte. Ltd.
The Sponsor Frasers Centrepoint Limited
The Offering 185,063,000 Stapled Securities offered under the Placement
Tranche and the Public Offer, subject to the Over-Allotment
Option.
The Placement Tranche
(including Reserved Stapled
Securities)
139,609,000 Stapled Securities offered by way of an
international placement to investors, including institutional
and other investors in Singapore (other than the Cornerstone
Investors, the FCL consideration Stapled Securities and the
TCC Stapled Securities) pursuant to the Offering (including
the Reserved Stapled Securities).
The Stapled Securities have not been and will not be
registered under the Securities Act and, subject to certain
exceptions, may not be offered or sold within the United
States (as defined in Regulation S). The Stapled Securities
are being offered and sold outside the United States in
reliance on Regulation S.
The Public Offer 45,454,000 Stapled Securities offered by way of a public offer
in Singapore.
Stapled Securities Stapled Securities in FHT, each Stapled Security consisting of
one unit in FH-REIT and one unit in FH-BT. The units are
stapled together such that the units cannot be issued,
transferred, traded, or otherwise dealt with separately.
Clawback and Re-allocation The Stapled Securities may be re-allocated between the
Placement Tranche and the Public Offer at the discretion of
the Joint Bookrunners (in consultation with the Managers), in
the event of an excess of applications in one and a deficit in
the other.
78
Reserved Stapled Securities 8,597,000 Stapled Securities reserved for subscription by the
directors, management, employees and business associates
of the Sponsor and the REIT Manager and persons who have
contributed to the success of FHT.
In the event that any of the Reserved Stapled Securities are
not fully subscribed for, they will be made available to satisfy
excess applications (if any) under the Public Offer and/or the
Placement Tranche.
FCL Consideration Stapled
Securities
Concurrently with, but separate from the Offering, the vendor
of Fraser Suites Singapore, will receive 262,377,999 Stapled
Securities in part satisfaction of the purchase consideration
for Fraser Suites Singapore and will direct the FCL
Consideration Stapled Securities to be issued to FCL
Investments Pte. Ltd., a wholly-owned subsidiary of the
Sponsor.
TCC Stapled Securities Concurrently with, but separate from the Offering, the
vendors of the Hotels will receive 474,009,091 Stapled
Securities in part satisfaction of the purchase consideration
for the Hotels and will apply part of the cash consideration
1
towards the subscription of additional Stapled Securities to
give an aggregate number of 512,238,000 Stapled Securities,
and direct the TCC Stapled Securities collectively to be
issued to TCC Hospitality which is wholly-owned by Atinant
Bijananda, Thapana Sirivadhanabhakdi, Wallapa Traisorat,
Thapanee Techajareonvikul and Panote Sirivadhanabhakdi in
equal proportions.
Subscription by the
Cornerstone Investors
Concurrently with, but separate from the Offering, each of
DBS Bank Ltd., DBS Bank Ltd. (on behalf of certain private
banking customers), Fortress Capital Asset Management (M)
Sdn Bhd, Meren Pte. Ltd, Mr Gordon Tang & Family and
Wealthy Fountain Holdings Inc. (the Cornerstone
Investors) has entered into a subscription agreement to
subscribe for an aggregate of 232,949,000 Stapled Securities
at the Offering Price conditional upon the Underwriting
Agreement having been entered into, and not having been
terminated, pursuant to its terms on or prior to the date on
which the Stapled Securities are issued as settlement under
the Offering (the Settlement Date).
(See Ownership of the Stapled Securities Subscription by
the Cornerstone Investors Information on the Cornerstone
Investors for further details.)
Offering Price S$0.88 per Stapled Security.
1
The vendor in respect of Park International London will enter into an agreement with the Managers, pursuant to
which the vendor of the Hotel will pay S$33,641,440 out of the cash consideration due to it to FHT for its subscription
of 38,228,909 Stapled Securities.
79
Subscription for Stapled
Securities in the Public Offer
Investors applying for the Stapled Securities by way of
Application Forms or Electronic Applications (both as referred
to in Appendix G, Terms, Conditions and Procedures for
Application for and Acceptance of the Stapled Securities in
Singapore) will pay the Offering Price on application, subject
to a refund of the full amount or, as the case may be, the
balance of the application monies (in each case, without
interest or any share of revenue or other benefit arising
therefrom) where:
an application is rejected or accepted in part only; or
the Offering does not proceed for any reason.
For illustrative purposes, an investor who applies for 1,000
Stapled Securities by way of an Application Form or, as the
case may be, an Electronic Application under the Public Offer
will have to pay S$880, which is subject to a refund of the full
amount or the balance thereof (without interest or any share
of revenue or other benefit arising therefrom), upon the
occurrence of any of the foregoing events.
The minimum initial subscription is for 1,000 Stapled
Securities. An applicant may subscribe for a larger number of
the Stapled Securities in integral multiples of 1,000.
Investors in Singapore must follow the application procedures
set out in Appendix G, Terms, Conditions and Procedures for
Application for and Acceptance of the Stapled Securities in
Singapore. Subscriptions under the Public Offer must be
paid for in Singapore dollars. No fee is payable by applicants
for the Stapled Securities, save for an administration fee for
each application made through automated teller machines
(ATMs) and the internet banking websites of OCBC Bank,
DBS Bank Ltd. (including POSB) and United Overseas Bank
Limited and its subsidiary, Far Eastern Bank Limited (the
Participating Banks).
The Stapled Security Lender TCC Hospitality Limited.
80
Over-Allotment Option In connection with the Offering, the Joint Bookrunners have
been granted the Over-Allotment Option by the Stapled
Security Lender. The Over-Allotment Option is exercisable by
the Stabilising Manager (or any of its affiliates or other
persons acting on behalf of the Stabilising Manager), in
consultation with the other Joint Bookrunners, in full or in part,
on one or more occasions, only from the Listing Date but no
later than the earlier of (i) the date falling 30 days from the
Listing Date; or (ii) the date when the Stabilising Manager (or
any of its affiliates or other persons acting on behalf of the
Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 35,737,000 Stapled Securities, representing
19.3% of the total number of Stapled Securities in the
Offering, to undertake stabilising actions. Unless indicated
otherwise, all information in this document assumes that the
Joint Bookrunners do not exercise the Over-Allotment Option.
(See Plan of Distribution for further details.)
The total number of Stapled Securities in issue immediately
after the close of the Offering will be 1,192,628,000 Stapled
Securities. The exercise of the Over-Allotment Option will not
increase this total number of Stapled Securities in issue.
Lock-ups The Sponsor, the Sponsor Entity, TCC Hospitality, DBS Bank
Ltd. and each of the shareholders of TCC Hospitality have
each agreed to a lock-up arrangement during the Lock-up
Period in respect of the effective interest in the relevant
Lock-up Stapled Securities held by them on the Listing Date,
subject to certain exceptions.
The Managers have also undertaken not to offer, issue or
contract to issue any Stapled Securities, and the making of
any announcements in connection with any of the foregoing
transactions, during the Lock-up Period, subject to certain
exceptions.
(See Plan of Distribution Lock-up Arrangements for further
details.)
Capitalisation S$1,778.1 million
(See Capitalisation and Indebtedness for further details).
Use of Proceeds See Use of Proceeds and Certain Agreements Relating to
FHT, FH-REIT, FH-BT and the Properties for further details.
81
Listing and Trading Prior to the Offering, there has been no market for the Stapled
Securities. Application has been made to the SGX-ST for
permission to list on the Main Board of the SGX-ST:
all the Stapled Securities comprised in the Offering;
all the Sponsor Stapled Securities;
all the TCC Stapled Securities;
all the Cornerstone Stapled Securities;
all the Stapled Securities which may be issued to the
Managers from time to time in full or part payment of
fees payable to the Managers (See Management and
Corporate Governance FH-REIT Fees Payable to the
REIT Manager and Management and Corporate
Governance FH-BT Fees Payable to the
Trustee-Manager for further details.);
all the Stapled Securities which may be issued to the
Serviced Residence Operators from time to time in full or
part payment of fees payable to the Serviced Residence
Operators; and
all the Stapled Securities which may be issued to the
MIT Manager from time to time in full or part payment of
fees payable to the MIT Manager.
Such permission will be granted when FHT is admitted to the
Official List of the SGX-ST.
The Stapled Securities will, upon their issue, listing and
quotation on the SGX-ST, be traded in Singapore dollars
under the book-entry (scripless) settlement system of the
Central Depository (Pte) Limited (CDP). The Stapled
Securities will be traded in board lot sizes of 1,000 Stapled
Securities.
Stabilisation In connection with the Offering, the Stabilising Manager (or
any of its affiliates or other persons acting on behalf of the
Stabilising Manager) may, in consultation with the Joint
Bookrunners and at its discretion, over-allot or effect
transactions which stabilise or maintain the market price of
the Stapled Securities at levels that might not otherwise
prevail in the open market. However, there is no assurance
that the Stabilising Manager (or any of its affiliates or other
persons acting on behalf of the Stabilising Manager) will
undertake stabilising action.
82
Such transactions may be effected on the SGX-ST and in
other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations
(including the SFA and any regulations thereunder). Such
transactions may commence on or after the Listing Date, and,
if commenced, may be discontinued at any time and shall not
be effected after the earlier of (i) the date falling 30 days from
the Listing Date; or (ii) the date when the Stabilising Manager
(or any of its affiliates or other persons acting on behalf of the
Stabilising Manager) has bought, on the SGX-ST, an
aggregate of 35,737,000 Stapled Securities, representing
19.3% of the total number of Stapled Securities in the
Offering, to undertake stabilising actions.
(See Plan of Distribution Over-Allotment and Stabilisation
for further details.)
No Redemption Stapled Securityholders have no right to request the REIT
Manager or the Trustee-Manager to redeem their Stapled
Securities while the Stapled Securities are listed on the
SGX-ST. Stapled Securityholders may only deal in their listed
Stapled Securities through trading on the SGX-ST. Listing of
the Stapled Securities on the SGX-ST does not guarantee a
liquid market for the Stapled Securities.
Distribution Policy Distributions from FHT comprise distributions from FH-REIT
and FH-BT.
FH-REITs distribution policy is to distribute 100.0% of FH-
REITs Distributable Income for the Forecast Period 2014 and
Projection Year 2015 and at least 90.0% of its Distributable
Income thereafter. The distribution will be made on a semi-
annual basis for the six-month periods ending 31 March, and
30 September. Distributions, when paid, will be in Singapore
dollars. (See Distributions for further details.)
FH-BT will be dormant as at the Listing Date and no
distributions will be made during the period that FH-BT
remains dormant. It is assumed that FH-BT will have no
revenue for the Forecast Period 2014 and Projection Year
2015. In the event that FH-BT becomes active and profitable,
FH-BTs distribution policy will be to distribute as much of its
income as practicable, and the declaration and payment of
distributions by FH-BT will be at the sole discretion of the
Trustee-Manager Board. There is no assurance that FH-BT
would make any distributions to Stapled Securityholders.
83
Payment Top-Up Arrangement Under the Payment Top-Up Arrangement, BCH Hotel
Investment Pte Ltd (vendor of InterContinental Singapore)
and River Valley Apartments Pte Ltd (one of the vendors of
Fraser Suites Singapore) will deposit the respective amounts
of S$8.05 million and S$1.65 million in escrow, which the
REIT Trustee will be able to draw down upon if the Gross
Operating Profit of the relevant Property falls below certain
thresholds, subject to the terms of the respective Top-Up
Deeds. (See Certain Agreements Relating to FHT, FH-REIT,
FH-BT and the Properties Payment Top-Up Deeds for
further details.)
Singapore Tax Considerations For Singapore income tax purposes, the components making
up a Stapled Security are recognised separately, i.e. as one
FH-REIT Unit and one FH-BT Unit. Accordingly, distributions
from FHT are recognised separately as distributions from
FH-REIT and distributions from FH-BT for the purpose of
determining the applicable Singapore tax treatment.
Distributions by FH-REIT
For InterContinental Singapore and Fraser Suites Singapore
(collectively, the Singapore Properties), FH-REIT has
obtained a tax ruling (the Tax Transparency Ruling) from
the Inland Revenue Authority of Singapore (the IRAS) on
the Singapore taxation of certain income from such properties
(the Specified Taxable Income).
Subject to the terms and conditions of the Tax Transparency
Ruling, the REIT Trustee will not be taxed on Specified
Taxable Income distributed to the Stapled Securityholders.
Instead, the Stapled Securityholders will be subject to tax on
the distributions made out of such Specified Taxable Income,
either directly, by way of tax deduction at source, or exempt
from tax, depending on their own individual tax status. One of
the key conditions of the Tax Transparency Ruling is that
FH-REIT distributes at least 90.0% of its Specified Taxable
Income in the year in which such income is derived.
For the Properties located outside Singapore, FH-REIT has
obtained tax rulings (Foreign Sourced Income Tax
Exemption Rulings) from IRAS on the Singapore taxation of
certain income originating from the properties located in
Australia, the United Kingdom, Japan and Malaysia.
84
Subject to the terms and conditions of the Foreign Sourced
Income Tax Exemption Rulings, certain income received by
FH-REIT and the Singapore Subsidiaries
1
originating from the
properties located in Australia, the United Kingdom, Japan
and Malaysia will be tax exempt in Singapore. Distribution of
such income to Stapled Securityholders will not be subject to
any further tax in Singapore.
Distributions by FH-BT
Any distribution made by FH-BT to Stapled Securityholders
will be exempt from Singapore income tax in the hands of
Stapled Securityholders, regardless of whether they are
individuals or non-individuals.
(See Taxation and Appendix F, Independent Taxation
Report for further information on the Singapore income tax
consequences of the purchase, ownership and disposition of
the Stapled Securities.)
Unstapling FHT can be terminated when stapling becomes unlawful or
prohibited by the listing manual of the SGX-ST (the Listing
Manual), or when either FH-REIT or FH-BT is terminated or
wound up respectively. Termination can also occur if
Extraordinary Resolutions (as defined herein) from the
holders of FH-REIT Units and the holders of FH-BT Units are
obtained and with prior approval from the SGX-ST for such
unstapling.
Termination FH-REIT may, under certain circumstances specified in the
FH-REIT Trust Deed, be terminated by either the REIT
Manager or the REIT Trustee. (See The Formation and
Structure of FHT, FH-REIT and FH-BT FH-REIT
Termination of FH-REIT for further details.)
FH-BT may, under certain circumstances specified in the
FH-BT Trust Deed, be wound up by the Trustee-Manager.
(See The Formation and Structure of FHT, FH-REIT and
FH-BT The Formation and Structure of FH-BT Winding-up
of FH-BT for further details.)
Governing Law The Stapling Deed, the FH-REIT Trust Deed and the FH-BT
Trust Deed, pursuant to which FHT, FH-REIT and FH-BT are
respectively constituted, are governed by Singapore law.
1
Singapore Subsidiaries refer to Excellence Prosperity TMK Pte. Ltd., FHT Japan Pte. Ltd. (which are part of the
holding structure for ANA Crowne Plaza Kobe), FHT Malaysia Pte. Ltd. (which is part of the holding structure for The
Westin Kuala Lumpur), FHT Australia Pte. Ltd. (which is part of the holding structure for the Australian Properties)
and FHT UK Pte. Ltd. (which is part of the holding structure for the UK Properties).
85
Underwriting, Selling and
Management Commission
Payable by FHT to the
Joint Bookrunners
The REIT Manager, on behalf of FH-REIT, and the Trustee-
Manager, on behalf of FH-BT, have agreed to pay the Joint
Bookrunners for their services in connection with the offering
of the Stapled Securities under the Offering, the TCC Stapled
Securities that are the subject of the exercise of the Over-
allotment Option, an underwriting, selling and management
commission (including incentive fees) of up to S$8.0 million,
assuming that the Over-allotment Option is fully exercised,
excluding GST based on the Offering Price of S$0.88 per
Stapled Security.
(See Plan of Distribution Issue Expenses for further
details.)
Risk Factors Prospective investors should carefully consider certain
risks connected with an investment in the Stapled
Securities, as discussed under Risk Factors.
86
INDICATIVE TIMETABLE
An indicative timetable for the Offering and trading in the Stapled Securities is set out below for
the reference of applicants for the Stapled Securities:
Indicative Date and Time Event
1 July 2014, 9.00 a.m. : Opening date and time for the Public Offer.
10 July 2014, 12:00 p.m. : Closing date and time for the Public Offer.
11 July 2014 : Balloting of applications under the Public Offer, if
necessary. Commence returning or refunding of application
monies to unsuccessful or partially successful applicants
and commence returning or refunding of application monies
to successful applicants for the amount paid in excess of
the Offering Price, if necessary.
14 July 2014, at or before
2.00 p.m.
: Completion of the acquisition of the Properties.
14 July 2014, 2.00 p.m. : Commence trading on a ready basis.
17 July 2014 : Settlement Date for all trades done on a ready basis on
14 July 2014.
The above timetable is only indicative and is subject to change. It assumes:
that the closing of the application list for the Public Offer (the Application List) is 10 July
2014;
that the Listing Date is 14 July 2014;
compliance with the SGX-STs Stapled Securities holding spread requirement; and
that the Stapled Securities will be issued and fully paid up prior to 2.00 p.m. on 14 July 2014.
All dates and times referred to above are Singapore dates and times.
Trading in the Stapled Securities on a ready basis is expected to commence at 2.00 p.m. on 14
July 2014 (subject to the SGX-ST being satisfied that all conditions necessary for the
commencement of trading in the Stapled Securities on a ready basis have been fulfilled), as the
completion of the acquisition of the Properties is expected to take place at or before 2.00 p.m. on
14 July 2014. (See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties for
further details.)
If FH-REIT is terminated, or FH-BT is wound up, or the Stapled Securities are unstapled under the
circumstances specified in the FH-REIT Trust Deed, FH-BT Trust Deed and the Stapling Deed
respectively prior to, or if the acquisition of the Properties is not completed by, 2.00 p.m. on 14 July
2014 (being the time and date of commencement of trading in the Stapled Securities), the Offering
will not proceed and the application monies will be refunded (without interest or any share of
revenue or other benefit arising therefrom and at each applicants own risk and without any right
or claim against FHT, FH-REIT, FH-BT, the REIT Manager, the REIT Trustee, the Trustee-
87
Manager, the Sponsor, the Global Coordinator or the Joint Bookrunners). (See The Formation
and Structure of FHT, FH-REIT and FH-BT The Formation and Structure of FH-REIT
Termination of FH-REIT for further details.)
In the event of an early or extended closure of the Application List or the shortening or extension
of the time period during which the Offering is open, the Managers will publicly announce the
same:
via SGXNET, with the announcement to be posted on the internet at the SGX-ST website:
http://www.sgxnet.sgx.com; and
in one or more major Singapore newspapers, such as The Straits Times, The Business
Times and Lianhe Zaobao.
Investors should consult the SGX-ST announcement on the ready trading date on the internet (at
the SGX-ST website http://www.sgx.com), or the newspapers, or check with their brokers on the
date on which trading on a ready basis will commence.
The Managers will provide details and results of the Public Offer through SGXNET and in one or
more major Singapore newspapers, such as The Straits Times, The Business Times and Lianhe
Zaobao.
The Managers reserve the right to reject or accept, in whole or in part, or to scale down or ballot
any application for the Stapled Securities, without assigning any reason for it, and no enquiry
and/or correspondence on the decision of the Managers will be entertained. In deciding the basis
of allotment, due consideration will be given to the desirability of allotting the Stapled Securities
to a reasonable number of applicants with a view to establishing an adequate market for the
Stapled Securities.
Where an application is rejected or accepted in part only or if the Offering does not proceed for
any reason, the full amount or, as the case may be, the balance of the application monies will be
refunded (without interest or any share of revenue or other benefit arising therefrom) to the
applicant, at his own risk, and without any right or claim against FHT, FH-REIT, FH-BT, the REIT
Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Global Coordinator or the
Joint Bookrunners.
Where an application is not successful, the refund of the full amount of the application monies
(without interest or any share of revenue or other benefit arising therefrom) to the applicant, is
expected to be completed, at his own risk within 24 hours after balloting (provided that such
refunds in relation to applications in Singapore are made in accordance with the procedures set
out in Appendix G, Terms, Conditions and Procedures for Application for and Acceptance of the
Stapled Securities in Singapore).
88
Where an application is accepted in full or in part only, any balance of the application monies will
be refunded (without interest or any share of revenue or other benefit arising therefrom) to the
applicant, at his own risk, within 14 Market Days
1
after the close of the Offering (provided that
such refunds in relation to applications in Singapore are made in accordance with the procedures
set out in Appendix G, Terms, Conditions and Procedures for Application for and Acceptance of
the Stapled Securities in Singapore).
Where the Offering does not proceed for any reason, the full amount of application monies
(without interest or any share of revenue or other benefit arising therefrom) will, within three
Market Days
1
after the Offering is discontinued, be returned to the applicants at their own risk
(provided that such refunds in relation to applications in Singapore are made in accordance with
the procedures set out in Appendix G, Terms, Conditions and Procedures for Application for and
Acceptance of the Stapled Securities in Singapore).
1
Market Day means any day on which the SGX-ST is open for trading in securities.
89
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following tables are only an extract from, and should be read together with, Unaudited Pro
Forma Financial Information as set out in Appendix C, and Independent Reporting Auditors
Report on the Compilation of Unaudited Pro Forma Financial Information as set out in Appendix
B.
The unaudited pro forma financial information for FH-REIT, based on the Offering Price, assuming
that the Over-Allotment Option is fully exercised, is as follows:
Unaudited Pro Forma Statements of Total Return for FH-REIT
FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
(S$000) (S$000) (S$000) (S$000) (S$000)
Gross revenue 84,843 93,880 97,583 25,752 26,034
Property operating expenses (16,046) (17,014) (17,254) (4,269) (4,359)
Net property income 68,797 76,866 80,329 21,483 21,675
REIT Managers
management fees (6,499) (6,959) (7,055) (1,819) (1,840)
Other management fees (1,650) (1,666) (1,633) (432) (415)
Trustees fees (481) (482) (453) (118) (110)
Other expenses
(1)
(31,631)
(2)
(2,327) (2,201) (567) (547)
Interest and other income
(3)
50 7 8
Finance costs
(5)
(16,241) (15,964) (15,544) (4,088) (3,817)
Total return before tax and
distribution 12,345 49,475 53,451 14,459 14,946
Taxation (2,975) (1,801) (2,297) (703) (825)
Total return after tax 9,370 47,674 51,154 13,756 14,121
Non-tax deductible items
and other adjustments
(4)
43,573 14,593 15,264 3,811 4,046
Income available for
distribution to holders of
Stapled Securities 52,943 62,267 66,418 17,567 18,167
Notes:
(1) Other expenses comprise operating expenses such as compliance expenses, annual listing fees, registry fees, audit
and tax advisory fees, valuation fees, insurance fees, commission fees, costs associated with the preparation and
distribution of reports to the holders of the Stapled Securities, investor communication costs and other
miscellaneous costs.
(2) In FY2011, in addition to the expenses referred to in (1) above, it includes stamp duty in relation to the acquisition
of United Kingdom & Australia properties and non-capitalised listing fees.
(3) Interest and other income comprise mainly interest earned on cash and bank balances. There is no payment top-up
recognised in the pro forma financial statements because such top-up relates to specific conditions in the future that
are not applicable to the historical pro forma periods presented (i.e. up to 30 November 2015 so long as the Property
is not sold).
(4) Non-tax deductible items and other adjustments comprise the REIT Managers management fees paid/payable in
Stapled Securities, MIT Managers management fees paid/payable in Stapled Securities, REIT Trustees fees,
amortisation of debt-related transaction costs/insurance fee, serviced residences management fees and trademark
licence fees which are paid/payable in Stapled Securities, stamp duty and non-capitalised listing fees.
(5) Finance costs comprise interest expense and amortisation of debt-related transaction costs.
90
Unaudited Pro Forma Balance Sheets of FH-REIT
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Non-current assets
Investment properties
(1)
1,648,798 1,645,015
Deferred tax assets
(2)
317 89
Current assets
Cash and cash equivalents 27,117 27,330
Tax recoverable
(3)
62,942 65,798
Other current assets 270 261
Total assets 1,739,444 1,738,493
Current liabilities
Other current liabilities 1,288 1,386
Borrowings
(5)
50,000 50,000
Non-current liabilities
Security deposits
(4)
23,717 23,861
Deferred tax liabilities
(2)
4,393 4,813
Borrowings
(5)
664,232 662,807
Total liabilities 743,630 742,867
Net assets attributable to holders of Stapled
Securities 995,814 995,626
Number of Stapled Securities in issue (000)
(6)
1,192,628 1,192,628
Net asset value per Stapled Securities (S$) 0.83 0.83
Notes:
(1) Assumes that costs of the investment properties remain unchanged from S$1,649 million at 30 September 2013 and
S$1,645 million at 31 December 2013.
(2) Deferred tax assets and deferred tax liabilities arose from the acquisition of the entities by FH-REIT in relation to
ANA Crowne Plaza Kobe.
(3) Tax recoverable relates to recoverable UK value added tax and Singapore goods and services tax paid for the
acquisition of certain investment properties. It also includes the tax receivable amount which arose from the
acquisition of the entities by FH-REIT in relation to ANA Crowne Plaza Kobe.
(4) Cash security deposits are collected from master lessees as part of the lease agreements (except for master lessee
in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being provided by
master lessee and tenant in the form of bankers guarantee. The use of such cash from security deposits are
disclosed under Use of Proceeds.
(5) Comprises principal amount of borrowings of S$714 million, after deducting unamortised debt upfront costs of S$7
million at 30 September 2013 and comprises principal amount of borrowings of S$713 million, after deducting
unamortised debt upfront costs of S$7 million at 31 December 2013.
(6) Based on the Offering Price of S$0.88 per Stapled Security.
91
Unaudited Pro Forma Cash Flow Statements of FH-REIT
FY2013 Q1 FY2014
(S$000) (S$000)
Operating activities
Net income before income tax 24,211 14,946
Adjustments for:
Amortisation expense
(1)
1,588 398
REIT Managers management fees paid or payable in
Stapled Securities
(2)
7,043 1,840
Other management fees paid or payable in Stapled
Securities
(3)
1,301 336
Borrowing costs 14,205 3,420
Serviced Residences Management Fees and Trademark
License Fees paid or payable in Stapled Securities
(4)
5,008 1,401
Other expenses 29,014 8
Operating income before working capital changes 82,370 22,349
Changes in receivables (8,132) (546)
Changes in payables 246 (4)
Cash security deposits received
(5)
24,095
Cash flows from operations 98,579 21,799
Taxes paid (1,297) (1,386)
Net cash inflows generated from operating activities 97,282 20,413
Investing activities
Purchase of investment properties (1,525,858)
Acquisition costs (26,453)
Net cash outflow on acquisition of subsidiaries
(6)
(169,661)
Cash flows used in investing activities (1,721,972)
Financing activities
Proceeds from issue of Stapled Securities 1,049,513
Issue expenses (28,542)
Proceeds from borrowings 742,046
Repayment of borrowings (50,000)
Payment of upfront debt and arrangement costs (7,232)
Distribution to holders of Stapled Securities (32,593) (33,617)
Interest paid (14,164) (3,420)
Cash flows generated from/(used in) financing activities 1,659,028 (37,037)
Net increase/(decrease) in cash and cash equivalents 34,338 (16,624)
Cash and cash equivalents at beginning of year/period 34,338
Cash and cash equivalents at end of year/period 34,338 17,714
92
Notes:
(1) This relates to the amortisation of the debt upfront costs.
(2) The REIT Manager has elected to receive 100% of the Base Fee and Performance Fee in the form of Stapled
Securities.
(3) The MIT Trustee has elected to pay the MIT Manager 100% of the Base Fee and Performance Fee in the form of
Stapled Securities.
(4) The Managers have elected that the Serviced Residences Operator receive 100% of the Serviced Residences
Management Fees and Trademark License Fees in the form of Stapled Securities.
(5) Cash security deposits are collected from master lessees as part of the lease agreements (except for master lessee
in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being provided by
master lessee and tenant in the form of bankers guarantee. The use of such cash from security deposits are
disclosed under Use of Proceeds.
(6) The effect of acquisition of the entities by FH-REIT in the pro forma cash flows for the year ended 30 September
2013 is set out below:
FY2013
(S$000)
Non-current assets
Investment property 176,406
Others 417
176,823
Current assets
Cash 3,922
Others 337
Total assets 181,082
Less: Non-current liabilities (38,730)
Less: Current liabilities (5,781)
Fair value of subsidiaries net assets acquired 136,571
Purchase price 136,571
Less: Cash acquired (3,922)
Add: Bank borrowings assumed 37,012
Net cash outflow 169,661
Significant Non-Cash Transactions
During the year ended 30 September 2013 and the three months ended 31 December 2013,
respectively, 15,114,000 and 3,978,000 Stapled Securities at S$0.88 per unit, were issued and
accrued as payment for the followings:
(1) The REIT Managers management fees which are payable in the form of Stapled Securities
(see Section G Note (1) in Appendix C) amounting to approximately S$7.0 million and S$1.8
million, respectively, during the year ended 30 September 2013 and the three months ended
31 December 2013;
(2) The MIT Managers management fees which are payable in the form of Stapled Securities
(see Section G Note (2) in Appendix C) amounting to approximately S$1.3 million and S$0.3
million, respectively, during the year ended 30 September 2013 and the three months ended
31 December 2013; and
(3) The Serviced Residences Management Fees and Trademark License Fees which are
payable in the form of Stapled Securities amounting to approximately S$5.0 million and
S$1.4 million, respectively, during the year ended 30 September 2013 and the three months
ended 31 December 2013.
93
PROFIT FORECAST AND PROFIT PROJECTION
The following is an extract from the Profit Forecast and Profit Projection section. Statements
contained in the Profit Forecast and Profit Projection section that are not historical facts may be
forward-looking statements. Such statements are based on the assumptions set out in this section
of this Prospectus and are subject to certain risks and uncertainties which could cause actual
results to differ materially from those forecast and projected. Under no circumstances should the
inclusion of such information herein be regarded as a representation, warranty or prediction with
respect to the accuracy of the underlying assumptions by any of FHT, FH-REIT, FH-BT, the REIT
Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Global Coordinator, the Joint
Bookrunners or any other person, or that these results will be achieved or are likely to be achieved
(see Forward-looking Statements and Risk Factors). Prospective investors in the Stapled
Securities are cautioned not to place any undue reliance on these forward-looking statements that
are valid only as at the date of this Prospectus.
None of FHT, FH-REIT, FH-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the
Sponsor, the Global Coordinator or the Joint Bookrunners guarantees the performance of
FHT, FH-REIT and FH-BT, the repayment of capital or the payment of any distributions, or
any particular return on the Stapled Securities.
The following tables show the forecast and projected statements of total return for
Forecast Period 2014 (from 1 April 2014 to 30 September 2014) and Projection Year 2015
(from 1 October 2014 to 30 September 2015) of FH-REIT. The forecast and projected yields
stated in the following tables are calculated based on:
the Offering Price; and
the forecast and projected statements of total returns for the Forecast Period 2014 and
Projection Year 2015 of FH-REIT.
Such yields will vary accordingly to the extent that the Listing Date is later than 1 April
2014, or for investors who purchase the Stapled Securities in the secondary market at a
market price that differs from the Offering Price.
The financial year-end of FH-REIT is 30 September. The Profit Forecast and Profit Projection may
be different to the extent that the actual date of issuance of the Stapled Securities is later than 1
April 2014. The Profit Forecast and Profit Projection are based on the assumptions set out in
Profit Forecast and Profit Projection and have been examined by the Independent Reporting
Auditor and should be read together with the report set out in Appendix A, Independent Reporting
Auditors Report on the Profit Forecast and Profit Projection, as well as the assumptions and the
sensitivity analysis set out in this section of the Prospectus.
While profit forecasts have been prepared for Forecast Period 2014, being the period commencing
from 1 April 2014 and ending 30 September 2014, it should be noted that due to the seasonal
nature of the hospitality business, the financial performance of hospitality entities and properties
is generally better in the second half of the financial year as compared to the first half of the
financial year. Hence, comparisons between the annualised financial performance of the
hospitality entities and properties from Forecast Period 2014 and Projection Year 2015 are
unlikely to provide accurate reflections of the expected changes in financial performance from
2014 to 2015.
94
FH-REIT Forecast and Projected Statements of Total Return
Forecast Period 2014 Projection Year 2015
April 2014 to
September 2014
October 2014 to
September 2015
(S$000) (S$000)
Gross revenue 51,557 103,039
Property operating expenses (10,021) (19,953)
Net property income 41,536 83,086
REIT Managers management fees (3,995) (7,974)
Other management fees
(1)
(772) (1,553)
Trustees fees (227) (445)
Other expenses
(2)
(30,241)
(3)
(2,215)
Payment Top-Up
(4)
2,800
(5)
6,900
Interest and other income 27 92
Finance costs
(6)
(7,756) (14,980)
Total return before tax and distribution 1,372 62,911
Taxation (2,996) (5,776)
Total (loss)/return after tax and before
distribution adjustments (1,624) 57,135
Non-tax deductible items and other
adjustments
(7)
38,120 17,689
Income available for distribution to
holders of Stapled Securities 36,496 74,824
Notes:
(1) Other management fees comprise MIT Manager fees, Kobe Asset Manager fees and ABS Servicer fees.
(2) Other expenses comprise operating expenses such as compliance expenses, annual listing fees, registry fees, audit
and tax advisory fees, valuation fees, insurance fees, commission fees, costs associated with the preparation and
distribution of reports to the holders of the Stapled Securities, investor communication costs and other
miscellaneous costs.
(3) In Forecast Period 2014, in addition to the expenses referred to in (2) above, it includes stamp duty in relation to
the acquisition of United Kingdom and Australia properties and non-capitalised listing fees.
(4) BCH Hotel Investment Pte Ltd, the vendor of InterContinental Singapore and River Valley Apartments Pte Ltd, one
of the vendors of Fraser Suites Singapore, will provide Payment Top-Up to FHT for the period from the Listing Date
to 30 November 2015. No amortisation is applied to the Payment Top-Up as the Payment Top-Up is expected to be
received in each of the relevant periods in Forecast Period 2014 and Projection Year 2015.
(5) Although the maximum amounts that FH-REIT can receive in respect of the first payment period from the Listing
Date up to 30 September 2014 (assuming the respective Properties are not sold) under the two Top-Up Deeds is
S$2.5 million, S$2.8 million is assumed to be received by FH-REIT under the Top-Up Deeds as the Forecast Period
2014 (being from 1 April 2014 to 30 September 2014) is for a longer period as compared to the period from the actual
Listing Date to 30 September 2014 covered by the Top-Up Deeds. Accordingly, the additional S$0.3 million
represents the amount of cashflows in respect of InterContinental Singapore and Fraser Suites Singapore that
would have been affected from 1 April 2014 to the Listing Date.
(6) Finance costs comprise interest expense and amortisation of debt-related transaction costs.
(7) Non-tax deductible items and other adjustments comprise the REIT Managers management fees paid/payable in
Stapled Securities, the MIT Managers management fees paid/payable in Stapled Securities, REIT Trustees fees,
amortisation of upfront debt-related transaction costs/insurance fee, serviced residences management fees and
trademark licence fees which are paid/payable in Stapled Securities, stamp duty and non-capitalised listing fees.
95
FH-REIT Forecast and Projected Statements of Distribution
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Total number of issued and issuable Stapled
Securities at end of period/year (000) 1,201,759 1,215,085
Distribution per Stapled Security (cents) 3.04 6.16
Distribution per Stapled Security (without
Payment Top-Up) (cents) 2.86 5.72
Offering Price (S$) 0.88 0.88
Distribution yield (%) 6.90
(1)
7.00
Distribution yield (without Payment
Top-Up)(%) 6.50
(1)
6.51
Note:
(1) Annualised by extrapolating the Forecast Period 2014 figures for a full financial year.
Gross Revenue and Net Property Income Contribution of Individual Property
The forecast and projected contribution of the Properties to Gross Revenue is as follows:
Forecast Period 2014 Projection Year 2015
April 2014 to
September 2014
October 2014 to
September 2015
(S$000) % (S$000) %
Hotels
InterContinental Singapore 9,501 18.4 19,262 18.7
Novotel Rockford Darling Harbour 2,739 5.3 5,772 5.6
Park International London
(1)
3,323 6.4 5,738 5.6
Best Western Cromwell
(1)
1,471 2.9 2,540 2.5
ANA Crowne Plaza Kobe 6,797 13.2 14,815 14.4
The Westin Kuala Lumpur 5,404 10.5 11,066 10.7
Sub-Total 29,235 56.7 59,193 57.5
Serviced Residences
Fraser Suites Singapore 7,432 14.4 15,843 15.3
Fraser Suites Sydney 4,716 9.2 9,570 9.3
Fraser Place Canary Wharf 3,052 5.9 6,138 6.0
Fraser Suites Queens Gate
(1)
4,387 8.5 8,098 7.8
Fraser Suites Glasgow
(1)
1,347 2.6 2,032 2.0
Fraser Suites Edinburgh
(1)
1,388 2.7 2,165 2.1
Sub-Total 22,322 43.3 43,846 42.5
Total 51,557 100.0 103,039 100.0
96
Gross Revenue of Geographical segments
The forecast and projected contribution of the geographical segments to Gross Revenue is as
follows:
Forecast Period 2014 Projection Year 2015
April 2014 to
September 2014
October 2014 to
September 2015
Singapore 16,933 32.8 35,105 34.0
Australia 7,455 14.5 15,342 14.9
The United Kingdom
(1)
14,968 29.0 26,711 26.0
Japan 6,797 13.2 14,815 14.4
Malaysia 5,404 10.5 11,066 10.7
51,557 100.0 103,039 100.0
The forecast and projected contribution of the Properties to Net Property Income is as follows:
Forecast Period 2014 Projection Year 2015
April 2014 to
September 2014
October 2014 to
September 2015
(S$000) % (S$000) %
Hotels
InterContinental Singapore 8,341 20.1 16,943 20.4
Novotel Rockford Darling Harbour 2,074 5.0 4,453 5.4
Park International London
(1)
2,964 7.1 5,024 6.0
Best Western Cromwell
(1)
1,282 3.1 2,165 2.6
ANA Crowne Plaza Kobe 5,491 13.2 12,167 14.6
The Westin Kuala Lumpur 5,093 12.3 10,458 12.6
Sub-Total 25,245 60.8 51,210 61.6
Serviced Residences
Fraser Suites Singapore 5,580 13.4 12,005 14.5
Fraser Suites Sydney 3,339 8.0 6,809 8.2
Fraser Place Canary Wharf 2,136 5.1 4,228 5.1
Fraser Suites Queens Gate
(1)
3,349 8.1 6,042 7.3
Fraser Suites Glasgow
(1)
984 2.4 1,430 1.7
Fraser Suites Edinburgh
(1)
903 2.2 1,362 1.6
Sub-Total 16,291 39.2 31,876 38.4
Total 41,536 100.0 83,086 100.0
Note:
(1) Annualised Gross Revenue and Net Property Income for Forecast Period 2014 are comparatively higher than
Projection Year 2015 mainly due to seasonality impact.
97
RISK FACTORS
Prospective investors should consider carefully, together with all other information contained in
this Prospectus, the factors described below before deciding to invest in the Stapled Securities.
The risks described below are by no means exhaustive or comprehensive, and there may be other
risks in addition to those shown below which are not known to the REIT Manager and/or the
Trustee-Manager or which may not be material now but could turn out to be material in the future.
Additional risks, whether known or unknown, may in the future have a material adverse effect on
FHT or impair the business operations of FHT. The market price of the Stapled Securities could
decline due to any of these risks and Stapled Securityholders may lose all or part of their
investment. In addition, this Prospectus does not constitute advice to you relating to investing in
the Stapled Securities and investors should make their own judgment or consult their own
investment advisers before making any investment in the Stapled Securities.
This Prospectus also contains forward-looking statements (including profit forecasts and profit
projections) that involve risks, uncertainties and assumptions. The actual results of FHT, FH-REIT
and/or FH-BT could differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including the risks faced by FHT as described below and elsewhere in
this Prospectus.
Due to the fact that FHT comprises FH-REIT and FH-BT, risk factors for FHT include
considerations relevant to the Stapled Securities, collective investment schemes and business
trusts.
As an investment in the Stapled Securities is meant to produce returns over the long-term,
investors should not expect to obtain short-term gains.
Investors should be aware that the price of the Stapled Securities, and the income from them,
might fall or rise. Investors should note that they might not get back their original investment.
Before deciding to invest in the Stapled Securities, prospective investors should seek professional
advice from their own investment or other advisers about their particular circumstances.
RISKS RELATING TO THE PROPERTIES
The loss of a Master Lessee or Tenant, a down-turn in the business of a Master Lessee or
Tenant or any breach by a Master Lessee or Tenant or the Corporate Guarantors of their
respective obligations under the relevant Master Lease and Tenancy Agreement and the
Corporate Guarantee could have an adverse effect on the financial condition, results of
operations and prospects of FHT.
On the Listing Date, the Properties will be leased to the Master Lessees and Tenant. FH-REIT is
dependent upon rental payments from the Master Lessees and Tenant. The business, financial
condition, results of operations and prospects of FHT will depend substantially upon the Master
Lessees and the Tenants ability to make timely rental payments.
Except for the Retail Master Lessee, the relevant Master Lessees and Tenant have appointed the
Hotel Managers and the Serviced Residence Operators to manage the Properties. The
performance of the Master Lessees and Tenant and their ability to pay rent may be affected by
factors beyond their control, such as the performance of the Hotel Managers and the Serviced
Residence Operators, as well as changes in general economic conditions, the level of demand for
the Properties, competition in the hospitality and hospitality-related industries and other factors
relating to the operations of the Properties.
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FH-REIT has been granted a corporate guarantee in respect of each of the Master Lease and
Tenancy Agreements (the Corporate Guarantees). However, there is no assurance that FCL, in
its capacity as guarantor of the Corporate Guarantees and TCC Land International Limited, in its
capacity as guarantor of the Corporate Guarantee in respect of the master lease for the retail
component of ANA Crowne Plaza Kobe (collectively, the Corporate Guarantors), will be able to
fulfil their obligations under the Corporate Guarantees. As such, the financial condition and results
of operations of FHT may be adversely affected by the bankruptcy, insolvency or downturn in the
business of any Master Lessee, Tenant or the Corporate Guarantor. (See Certain Agreements
Relating to FHT, FH-REIT, FH-BT and the Properties for further details.)
If any Master Lessee or Tenant terminates or does not renew the Master Lease Agreement or
Tenancy Agreement on expiry, the financial performance of FH-REIT, and consequently the
distributions which FHT may be able to make to Stapled Securityholders, may be adversely
affected. The amount of rental and the terms on which each Master Lease Agreement or Tenancy
Agreement is renewed may be less favourable than the current Master Lease Agreement or
Tenancy Agreement. The replacement of a master lessee or tenant on satisfactory terms may not
be carried out in a timely manner or at all. Although FH-BT will, as a last resort, step in as the
master lessee or tenant, there can be no assurance that FH-BT will be able to provide a similar
amount of income from such Property.
FH-REIT has utilised the security deposits as part of its cashflow management to finance
working capital and the acquisition of assets and accordingly may not be able to repay the
Master Lessees their security deposits.
FH-REIT will utilise the security deposits which it would receive in the form of cash from the Master
Lessees (save in respect of ANA Crowne Plaza Kobe and The Westin Kuala Lumpur where the
security deposits are provided by way of bankers guarantee) as part of its cashflow management
to finance working capital and the acquisition of assets. FH-REIT would be required to return the
security deposits to the Master Lessees (without interest and subject to proper deductions by
FH-REIT) within one month after the relevant Master Lease expires or is terminated in accordance
with the terms of the relevant Master Lease, whichever is the earlier, if the Master Lessee has then
paid all sums owing and performed all obligations in the relevant Master Lease to the reasonable
satisfaction of FH-REIT. FH-REIT may not be able to repay the Master Lessees their security
deposits if, at such point of time, FH-REIT is unable to obtain sufficient funds. In those
circumstances, FH-REIT may be subject to legal proceedings for breach of the terms of the
relevant Master Lease.
There is no assurance that the level of Distributable Income attributable to InterContinental
Singapore and Fraser Suites Singapore can be sustained at the forecast and projected
levels once the payment top-up arrangement entered into (in respect of InterContinental
Singapore) with the vendor and (in respect of Fraser Suites Singapore) with River Valley
Apartments Pte Ltd expires.
The REIT Trustee will, on Listing Date, enter into (i) a payment top-up arrangement with BCH
Hotel Investment Pte Ltd, the vendor of InterContinental Singapore, and (ii) a payment top-up
arrangement with River Valley Apartments Pte Ltd, one of the vendors of Fraser Suites Singapore.
Under the foregoing payment top-up arrangements, BCH Hotel Investment Pte Ltd and River
Valley Apartments Pte Ltd will deposit the respective amounts of S$8.05 million and S$1.65 million
in escrow.
The payment top-up arrangement starts from the date of the relevant Top-Up Deed and covers
four payment periods, with the last ending on the earlier of (a) 30 November 2015 and (b) the sale
completion date of the Property in the event FH-REIT sells its interest in the Property and the sale
completion date falls within the fourth payment period. Under the terms of each of the Top-Up
Deeds, if the Gross Operating Profit of the relevant Property for each of the first three payment
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periods falls below the agreed thresholds for each such payment period, the REIT Trustee will be
able to draw down from the escrow account such sum as it shall determine, subject to an agreed
ceiling in each instance. In relation to the fourth and last payment period, if the Gross Operating
Profit of the relevant Property falls below the agreed threshold or if the aggregate of the Gross
Operating Profit for the first payment period and fourth payment period falls below an agreed
aggregate threshold, the REIT Trustee will be able to drawdown the balance of the escrow sum.
Following the expiry or withdrawal of the escrow sum, there is no assurance that InterContinental
Singapore and Fraser Suites Singapore will be able to generate a level of Distributable Income
commensurate with the levels attained with the provision of the payment top-up. Further, where
the difference between the Gross Operating Profit and the respective agreed thresholds for the
relevant periods exceeds the agreed ceiling amount that the REIT Trustee is able to draw down,
the Distributable Income attributable to InterContinental Singapore and Fraser Suites Singapore
(as the case may be) for the relevant periods may be adversely affected. (See Certain
Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements Relating to the
Singapore Properties Payment Top-Up Deeds for further details.)
Portions of InterContinental Singapore are within the railway protection and safety zone
and certain activities may not be carried out in such zone unless the prior approval of the
Land Transport Authority of Singapore is obtained.
Certain parts of InterContinental Singapore are within the railway protection zone and railway
safety zone such that FH-REIT would be required to obtain the prior approval of the Land
Transport Authority of Singapore before carrying out restricted activities within the railway
protection zone and where applicable, the railway safety zone, and any restricted activity being
carried out on the railway protection zone and the railway safety zone shall be subject to the
regulation under the Rapid Transit Systems (Railway Protection, Restricted Activities)
Regulations. Such restricted activities include the use of any crane, piling equipment, excavator
or any other mechanical equipment or vehicle, the storage of materials and the erection of
temporary structures such as maintenance towers and hoardings or other similar temporary
structures. In addition, FH-REIT will not be allowed to carry out any restricted activity within six
metres of the railway and any person contravening such restriction shall be guilty of an offence.
If FH-REIT intends to develop and carry out engineering works within the railway corridor or
railway protection zone, FH-REIT is required to submit their proposal to the Land Transport
Authority of Singapore for its approval under the Rapid Transit System (Development & Building
Works within Railway Corridor and Railway Protection Zone). In view of the aforesaid restrictions,
any future asset enhancement or other redevelopment or rectification works in respect of
InterContinental Singapore are required to be carefully planned and carried out under close
supervision and diligence to avoid damaging or affecting the MRT structures and the safety of
railway operation. If FH-REIT intends to carry out any restricted activity within the railway
protection zone or where applicable, the railway safety zone, or engineering works within the
railway corridor or railway protection zone, there is no guarantee that the Land Transport Authority
would grant its permission. The Land Transport Authority may impose terms and conditions as it
thinks fit in granting its permission. This may affect the ability of FH-REIT to carry out asset
enhancement or other development or rectification works in respect of InterContinental
Singapore.
Renovation work, repair and maintenance or physical damage to the Properties may disrupt
FH-REITs operations.
The quality and design of the Properties influence the RevPAR and the demand for hotel rooms
or serviced residence units. The Properties may need to undergo renovation works from time to
time to retain their attractiveness to guests and may also require ad hoc maintenance or repairs
in respect of faults or problems that may develop or because of new planning laws or regulations,
such that there may be periodic capital expenditure beyond what is budgeted. The costs of
maintaining the Properties and the risk of unforeseen maintenance or repair requirements tend to
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increase over time as the Properties age. The business and operations of the Properties may be
disrupted as a result of renovation works and it may not be possible to collect the full rate of, or,
as the case may be, any rental income on the space affected by such renovation works. This may
affect the performance of the Master Lessees or Tenant of the affected Properties and their ability
to make timely rental payments under the Master Lease and Tenancy Agreements.
The due diligence on the Properties, leases, buildings and equipment and on the existing
holding structure of Kobe Excellence TMK may not have identified all material defects,
breaches of laws and regulations inherent or historical tax liabilities and other deficiencies.
While the Managers believe that reasonable due diligence investigations with respect to the
Properties have been conducted and the Managers have commissioned technical consultants to
carry out physical inspections on the Properties, there is no assurance that the due diligence
investigations and technical inspections will uncover all defects or deficiencies relating to the
Properties including defects which require repair or maintenance (such as design, construction or
other latent property or equipment defects in the Properties which may require additional capital
expenditure, special repair or maintenance expenses) or will uncover all non-compliance with the
laws and regulations in relation to the Properties or their holding entities. The experts reports that
the Managers rely on as part of their due diligence investigations of the Properties are subject to
uncertainties or limitations as to their scopes. Such undisclosed defects or deficiencies may
require significant capital expenditures to rectify defects or deficiencies or may involve additional
obligations to third parties which may have a material adverse effect on FH-REITs results of
operations, earnings and cash flows. Should any of the Properties or their holding entities not be
in compliance with certain laws and regulations, FH-REIT may also incur financial or other
obligations in relation to such breaches or non-compliance.
Some examples of the potential limitations of the due diligence process on the Properties are
described below:
In general, the scope of legal due diligence on the Properties is limited only to (i) the information,
documents and results specifically disclosed in the course of due diligence and the due diligence
confirmations provided and (ii) results of searches obtained of publicly available information on
certain public registers. There is no assurance that all material documents and relevant
information have been disclosed and therefore reviewed during due diligence. Accordingly, the
legal due diligence may not have uncovered all non-compliance with the laws, regulations and
terms of all contracts relevant to the Properties.
In relation to ANA Crowne Plaza Kobe, some trees on the site of the Property may encroach on
adjacent land and the site on which of the Property is situated may be encroached upon by objects
such as trees and fence foundations. To date, there have been no disputes between any party in
respect of such encroachments. While nothing has been disclosed in the due diligence
investigation in respect of ANA Crowne Plaza Kobe that would lead the Managers to believe the
aforementioned encroachments issues to be material, there can be no assurance that FH-REIT
will not have significant unidentified liabilities or obligations in the future as a result of such
encroachment issues. If such encroachment issues result in significant capital expenditures or
obligations to third parties, the results of operations of ANA Crowne Plaza Kobe may be adversely
affected.
In connection with its acquisition of ANA Crowne Plaza Kobe, FH-REIT will be acquiring
Excellence Prosperity TMK Pte. Ltd. and Excellence Prosperity Japan K.K. (collectively, the ANA
Crowne Plaza Holding Entities) each of which has been in operation since 2009. Accordingly,
FH-REIT will be exposed to the historical and future liabilities and obligations of these entities
following the completion of the acquisition, as FH-REIT will be ultimately responsible for satisfying
these liabilities and obligations. These liabilities would include ordinary course-type liabilities and
obligations relating to the operations of the entities in the past or the future, as well as liabilities
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or obligations arising from such entities being operated other than in compliance with real estate,
tax, financial services and other laws and regulations and/or obligations to third parties (including
unidentified historic liabilities or obligations). While the Managers have not identified from their
due diligence specific material liabilities relating to the historical operations of the entities which
appear significant and outside the ordinary course of business and which are not otherwise
factored into the disclosures in this Prospectus, there can be no assurance that FH-REIT will not
have significant unidentified liabilities or obligations or operations or operational deficiencies
(including debt or trade payables, unknown or defective contracts) other than those disclosed in
this Prospectus. Such undisclosed defects or deficiencies may require significant capital
expenditures or obligations to third parties and involve significant and unpredictable patterns and
levels of expenditure which may have a material adverse effect on FH-REITs net assets, earnings
and cash flows.
FH-REIT will be acquiring ANA Crowne Plaza Kobe through its existing holding structure. Although
FH-REIT has engaged tax advisers to conduct due diligence for this indirect acquisition, there is
no assurance that the due diligence exercise would have identified all inherent or historical tax
liabilities incurred (or to be incurred) by the entities in the existing holding structure (as the
relevant tax authorities may not agree with an entitys tax computation and may make certain
adjustments which may result in tax liabilities for past tax computations/returns). FH-REIT has
obtained tax indemnities from the vendor of ANA Crowne Plaza Kobe but such indemnities are
subject to limitations such as the quantum of a claim and the time period for making a claim. If the
entities in the existing holding structures taken over by FH-REIT are subject to tax liabilities which
were previously not identified or the tax indemnity is insufficient to cover the liabilities incurred,
this may have a material adverse effect on the business, financial condition, results of operations
and prospects of FH-REIT.
The representations, warranties and indemnities granted in favour of FH-REIT by the
vendors of the Properties are subject to limitations as to their scope and the amount and
timing of claims which can be made thereunder.
The representations, warranties and indemnities granted in favour of FH-REIT by the vendors of
the Properties are subject to limitations as to their scope and amount and timing of claims which
can be made thereunder. There can be no assurance that FH-REIT will be reimbursed under such
representations, warranties and indemnities for all losses or liabilities suffered or incurred by it as
a result of its acquisition of the Properties. A specific example of one such limitation is set out
below.
In relation to The Westin Kuala Lumpur, there are limitations to the representations, warranties
and indemnities made in favour of the Malaysian SPV by the Originator (being JBB Hotels Sdn
Bhd), the vendor of The Westin Kuala Lumpur. The Originator has limited its liability arising from
a breach of any representations and warranties in the sale and purchase agreement of The Westin
Kuala Lumpur on both the overall maximum quantum of any claim (which is the aggregate net
proceeds to be received by the Originator as respective consideration for its sale of The Westin
Kuala Lumpur) and the time period (where all claims (other than claims in relation to tax or the title
or rights of The Westin Kuala Lumpur) which are not notified in writing to the Originator before the
expiry of 15 months from the legal completion of the sale and purchase of The Westin Kuala
Lumpur will be time-barred). In the event that any claim (save for the potential claim by Dewan
Bandaraya Kuala Lumpur against the Originator for outstanding rentals of MYR558,100.00 from
August 2010 to July 2013 arising from the The Westin Kuala Lumpurs use of a piece of land
beside the hotel for purposes of a sidewalk caf) notified to the Originator is time-barred or is in
excess of the aggregate net proceeds to be received by the Originator as respective consideration
for its sale of The Westin Kuala Lumpur, the Malaysian SPV will not be compensated for its loss
to the extent that such loss extends beyond the limitations and this will adversely affect the
financial condition of the Malaysian SPV.
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(See Certain Agreements relating to FHT, FH-REIT, FH-BT and the Properties for further details
on, inter alia, the limitations in relation to the representations, warranties and indemnities granted
in favour of FH-REIT.)
The appraisals of the Properties are based on various assumptions and the price at which
FH-REIT is able to sell a Property in future may be different from the initial acquisition value
of the Property.
The valuation of each of the Properties prepared by the Independent Valuers is contained in
Appendix D, Independent Property Valuation Summary Reports. The appraisals of the
Properties are based on different methodologies. Primarily, the discounted cash flow method and
the income capitalisation method were employed and there can be no assurance that the
assumptions relied on are accurate measures of the market. The appraisals of the Properties by
the Independent Valuers may have included a subjective determination of certain factors relating
to the Properties, such as their relative market positions, financial and competitive strengths and
physical condition. Accordingly, the values of the Properties may have been evaluated
inaccurately and such valuations may not reflect actual sale prices even where any such sales
occur shortly after the valuation date. The appraised value of any of the Properties or any future
acquisitions is not an indication of, and does not guarantee, a sale price at that value at present
or in future. The price at which FHT may be able to sell a Property may be lower than its appraised
value or the initial acquisition price of the Property.
FHT may invest in properties through investments in various property-owning vehicles, and may
in the future utilise a variety of investment structures for the purpose of investing in property.
Where a property or an interest in a property is acquired through a company or investment
structure, the value of the company or investment structure may not be the same as the value of
the underlying property due to, for example, environmental, contingent, and contractual or other
liabilities, or structural considerations. As a result, there can be no assurance that the value of
investments made through those structures will fully reflect the value of the underlying property.
FH-REIT may suffer material losses in excess of insurance proceeds or in respect of losses
which are uninsured.
The Properties face the risk of suffering physical damage caused by fire, acts of God such as
natural disasters or other causes, as well as potential public liability claims, including claims
arising from the operations of the Properties.
Earthquake insurance will not generally be maintained for properties in Japan, except where the
probable maximum loss (PML) for a property is in excess of 15% of current building replacement
construction cost. PML is defined as the probable maximum loss (i.e. repair and reprocurement
expenses) that would be incurred if a major earthquake struck. Specifically, it means the loss
generated by the largest earthquake that has a 10% probability of occurring during a 50 year
assumed service life of a building corresponds to earthquakes that have a probability of
occurrence once every 475 years.
In addition, certain types of risks (such as terrorism, outbreak of war or other hostilities, losses
caused by the withholding of supply of utilities by a supply authority and contamination or other
environmental breaches) may be or become uninsurable in certain jurisdictions or the cost of
insurance may be prohibitive when compared to the risk. For instance, in Japan, losses resulting
from earthquakes are only insurable in relation to residential buildings and up to a certain limit of
cover for hotel buildings.
Currently, FH-REITs insurance policies for the Properties do not cover certain types of risks such
as acts of war, contamination or other environmental breaches including biological, chemical or
radioactive contaminations.
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Should an uninsured loss or a loss in excess of insured limits occur, FH-REIT could be required
to pay compensation and/or lose capital invested in the affected Property as well as anticipated
future revenue or rental payment from that Property. There can be no assurance that material
losses in excess of insurance proceeds or in respect of losses which are uninsured will not occur
in the future.
FHT may suffer losses and be liable for the damage suffered by third parties as a result of
contamination or other environmental issues in the event that contaminants are found on
the land on which the Properties or other assets of FHT are located.
The Properties and other assets acquired in the future by FHT may be affected by contamination
or other environmental issues which may not previously have been identified and/or rectified at the
time of acquisition or which may subsequently occur after acquisition. This gives rise to a number
of risks, including:
the risk of prosecution by environmental authorities;
the requirement for unbudgeted additional expenditure to remedy such issues;
the adverse impact on the hotel operations at the affected property which may in turn
adversely affect the revenue of FHT, or where the affected property is leased to other
lessees, the revenue of these lessees which may in turn affect their abilities to meet their
obligations under the lease agreements with FHT; and
the adverse impact on the value of the affected property.
While FHT may not be aware of such contamination or environmental issues at the time of
acquisition or be responsible for such contamination or environmental issues, FHT may still be
liable to bear the costs of remedying or removing such contamination and there is no guarantee
that FHT will be able to recover such costs from other parties which might have contributed to or
are responsible for such contamination. Furthermore, if a third party is injured due to any
contaminant or environmental issue arising from properties owned by FHT from time to time, FHT
may be liable for the damage suffered by the third party. Accordingly, in the event that any of the
properties of FHT is affected by contamination or other environmental issues, this may have an
adverse effect on the business, financial condition, results of operations and prospects of FHT.
Planned amenities and transportation infrastructure near the Properties may not be
implemented as planned, or may be closed, relocated, terminated, delayed or not
completed.
There is no assurance that amenities, transportation infrastructure and public transport services
near the Properties will be implemented as planned or will not be closed, relocated, terminated,
delayed or completed. If such an event were to occur, it will adversely impact the accessibility of
the relevant Property and the attractiveness and marketability of the relevant Property to guests
and tenants. This may then have an adverse effect on the demand and the rental rates for the
relevant Property and adversely affect the business, financial condition and results of operations
of FHT.
FHT may be involved in disputes arising from boundary disputes which may result in costs
and require payments.
In relation to The Westin Kuala Lumpur, there is a potential claim by the local authority of Kuala
Lumpur, Dewan Bandaraya Kuala Lumpur (DBKL), against the Originator for outstanding rentals
of MYR558,100.00 from August 2010 to July 2013 arising from the Originators use of a piece of
land beside the hotel building for purposes of a sidewalk cafe. It is the Originators belief that the
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piece of land is part of the entire hotel lot which belongs to the Originator. However, DBKL in its
letter dated 9 April 2013 claimed that the piece of land is a piece of reserved land for public
purposes of which DBKL has authority over. The Originator is currently in the process of
negotiating with DBKL with a view to resolving this matter. If it is resolved in the future that DBKL
has authority over the piece of land, FHT will be required to pay the outstanding rentals and rent
the piece of land should it intend to utilise the same. In the event FHT decides not to rent the piece
of land, DBKL has the right to require The Westin Kuala Lumpur to vacate the land.
Notwithstanding that the Originator will be providing an indemnity to FHT in the event it incurs any
cost or penalty or any sum in respect of the above dispute, should FHT be required to pay
damages or rectify any encroachment in any other way, this may adversely affect FHTs business,
financial condition, results of operations and/or prospects.
FHT may be required by relevant authorities to demolish certain wooden balconies at the
rear of Best Western Cromwell London.
In relation to Best Western Cromwell London, certain wooden balconies at the rear of the Property
were built without obtaining planning permission from the relevant authorities. Planning
permission was previously applied for but had not been granted as it would affect the appearance
of the Property and result in overlooking of other properties in the area. At the time of purchase
of Best Western Cromwell London by the vendor, Global-Link Investments Limited, the relevant
authorities had threatened action but no recent communications in relation to the action have been
received.
There is a risk that a further notice from the relevant authorities in relation to enforcement might
be served and as a consequence, the relevant balconies may have to be demolished.
Notwithstanding that Global-Link Investments Limited has (i) agreed to, at its own cost and
expense, cause to be demolished the wooden balconies and make good the portion of the building
thereby affected, if required by government or statutory authorities and (ii) provided an indemnity
to FHT in the event it incurs any payment imposed by the government or statutory authorities
(including any fines, penalties, charges, fees, expenses or other sum) in relation to the wooden
balconies, should FHT be required to rectify the issue in relation to the wooden balconies, this may
adversely affect FHTs business, financial condition, results of operations and/or prospects as the
rooms may also become less attractive to occupiers as a result of the demolition of these wooden
balconies and may result in a loss of revenue in respect of Best Western Cromwell London.
Accordingly, the variable rent payable under the Master Lease Agreement may be reduced,
adversely affecting FHTs business and results of operations.
The Singapore Land Authority, on behalf of the President of the Republic of Singapore, may
as lessor re-enter the Properties upon breach of terms and conditions of the State lease.
Each of the Singapore Properties is held under a registered State Lease issued by the President
of the Republic of Singapore as lessor. Each State lease contains terms and conditions commonly
found in State leases in Singapore, including the right of the lessor to re-enter the Properties and
terminate the lease (without compensation) in the event the lessee fails to observe or perform the
terms and conditions set out in the relevant State lease.
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RISKS RELATING TO FHTS OPERATIONS
FH-REIT may be required to contribute towards the capital expenditure incurred in respect
of the common property of the respective developments in which Fraser Suites Singapore
and InterContinental Singapore are comprised.
Fraser Suites Singapore is comprised in the development Valley Point, subdivided into three
separate strata lots. Fraser Suites Singapore is comprised in one such strata lot, and the retail and
office components of Valley Point are separately comprised in the remaining two strata lots. The
Management Corporation of Valley Point has been constituted and the subsidiary proprietor of
Fraser Suites Singapore has to pay periodic contributions to, amongst other things, a sinking fund
maintained by the Management Corporation of Valley Point.
InterContinental Singapore is comprised in a strata lot and title to InterContinental Singapore is
held under a subsidiary strata certificate of title. The Management Corporation of the development
in which InterContinental Singapore is comprised, has been constituted and the subsidiary
proprietor of InterContinental Singapore has to pay periodic contributions to, amongst other
things, a sinking fund maintained by the Management Corporation of the development in which
InterContinental Singapore is comprised.
The sinking fund is intended to cover capital expenditure incurred in respect of common property
in a strata-titled development. If the sinking fund accounts do not contain substantial amounts of
sinking fund contributions, when capital expenditure is required to be incurred for Valley Point
and/or the development in which InterContinental Singapore (as the case may be) is comprised,
FH-REIT, as the subsidiary proprietor of Fraser Suites Singapore and InterContinental Singapore,
will be required to contribute towards the capital expenditure in proportion to the share value the
strata lots in which these properties are comprised bear to the total share value of all strata lots
comprised in Fraser Suites Singapore and InterContinental Singapore, as the case may be. This
may have an adverse impact on the operating results of FH-REIT.
There is no assurance that other subsidiary proprietors will co-operate on matters
concerning the common property of Fraser Suites Singapore and InterContinental
Singapore.
FH-REIT will own 53.85% of the total share value of strata lots comprised in Valley Point and
cannot therefore deal with the common property in Valley Point as if Valley Point is entirely owned
by it.
InterContinental Singapore is a subdivided strata development comprising four strata lots, one
held by BCH Hotel Investment Pte Ltd (the vendor of InterContinental Singapore) and the
remaining three strata lots held separately by other registered subsidiary proprietors. All four
subsidiary proprietors of that development, which constitute the Management Corporation, jointly
own the common property of the development as tenants-in-common in proportion to the share
values attributable to their respective strata lots. FH-REIT will, on being registered as the
subsidiary proprietor of InterContinental Singapore, own only 18.54% of the total share value of
strata lots in that development and cannot therefore deal with the common property in that
development as if that development is entirely owned by it.
Under the Land Titles (Strata) Act and Building Maintenance and Strata Management Act, certain
matters concerning the common property, such as the installation or provision of additional
facilities or the making of improvements to the common property of a development, and the
acceptance of transfers of land to add to the common property, require a special resolution, that
is, a resolution passed at a general meeting of a management corporation, in favour of which at
least 75.0% in value of votes of subsidiary proprietors present at such meeting is cast. Certain
other matters concerning the common property, such as the creation of easements and
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restrictions affecting common property, require a unanimous resolution, that is, a resolution
passed at a general meeting of a management corporation, in favour of which all votes of
subsidiary proprietors present at such meeting are cast.
There is no assurance that even ordinary resolutions concerning the common property of the
development in which InterContinental Singapore forms part, can be passed as FH-REIT will own
only 18.54% of the total share value of strata lots in that development.
FH-REIT will own only 53.85% of the total share value of strata lots comprising Valley Point. There
is thus no assurance that resolutions other than ordinary resolutions concerning the common
property of Valley Point can be passed. If FH-REITs strategy or plan in relation to Fraser Suites
Singapore involves the common property of the development and requires the passing of a special
or unanimous resolution at a general meeting of the Management Corporation, there is no
assurance that the registered proprietors of the other strata lots of Valley Point will not vote
against such resolution and hence prevent such resolution from being passed. In particular,
FH-REITs ability to carry out improvements or enhancement works may be restricted where such
works involve the common property and require an unanimous or special resolution to be passed
at a general meeting of the Management Corporation.
Fraser Suites Sydney has to contribute to a sinking fund for capital expenditure on shared
facilities.
Fraser Suites Sydney is a stratum lot forming part of a mixed-use development.
The Strata Management Statement for the mixed-use development which, amongst other things,
sets out the rights and responsibilities of the owners of the mixed-use development, provides that
each stratum lot owner must pay contributions to the sinking fund.
A building management committee is established under the Strata Management Statement. Under
the terms of the Strata Management Statement, each stratum lot owner of this mixed-use
development is a member of the building management committee.
A sinking fund has been established by the building management committee. The sinking fund is
intended to cover capital expenditure incurred in respect of shared facilities in this mixed-use
development.
FH-REIT, once it is the registered proprietor of Fraser Suites Sydney, will be required to contribute
towards the capital expenditure in accordance with a range of percentages referable to different
types of shared facilities as set out in the Strata Management Statement.
A risk factor is that the percentages specified for contributions to expenditure on shared facilities
may now or in the future not reflect a fair contribution.
If that should be the case there is no assurance that the other registered proprietors of lots in this
mixed-use development will not vote against matters where FH-REIT could wish to change the
arrangements relating to the shared facilities which require the unanimous resolution of the
building management committee. The Strata Management Statement does not provide for any
shared facilities for which FH-REIT bears 100% of the cost, and accordingly can pass the
necessary resolution by itself.
A further risk is that another stratum lot owner could fail to pay contributions required, leaving a
shortfall.
107
The Sponsor and TCC Hospitality, which will be controlling Stapled Securityholders (as
defined herein), will be able to exercise influence over certain activities of FHT.
The Sponsor, its respective subsidiaries, related corporations and/or associates are engaged in,
among other things, real estate fund management. Immediately following the Offering, it is
intended that the Sponsor will hold 262,378,000 Stapled Securities. This is equivalent to 22.0%
of the total number of Stapled Securities expected to be in issue at the Listing Date. The Sponsor
will therefore be in a position to exercise influence in matters which require the approval of the
Stapled Securityholders.
Immediately following the Offering, it is intended that TCC Hospitality will hold 512,238,000
Stapled Securities (assuming the Over-Allotment Option is not exercised), equivalent to 43.0% of
the total number of Stapled Securities expected to be in issue at the Listing Date. TCC Hospitality
will therefore be in a position to exercise influence in matters which require the approval of the
Stapled Securityholders.
The operations of FHT may be adversely affected by economic and real estate market
conditions, as well as changes in regulatory, fiscal and other governmental policies in the
countries in which the assets of FHT are located.
The assets in FHTs Initial Portfolio are located in Singapore, Australia, the United Kingdom,
Japan and Malaysia. FHTs investment strategy envisages investments in hospitality and
hospitality-related assets located anywhere in the world except Thailand. As a result, FHTs
results of operations depend, to a large extent, on the performance of the local, regional and/or
global economy.
An economic decline in the countries in which the assets of FHT are located could adversely affect
FHTs results of operations and future growth. The global credit markets have experienced, and
may continue to experience, volatility and liquidity disruptions, which have resulted in the
consolidation, failure or near failure of a number of institutions in the banking and insurance
industries. There remains a concern that the debt crisis in Europe will impinge upon the health of
the global financial system. These events could adversely affect FHT insofar as they result in:
a negative impact on the ability of the tenants to pay their rents in a timely manner or
continuing their leases, thus reducing FHTs cash flow;
an increase in counterparty risk; and/or
an increased likelihood that one or more of (i) FHTs banking syndicates (if any), (ii) banks
or insurers, as the case may be, providing bankers guarantees or performance bonds for the
rental deposits or other types of deposits relating to or in connection with the Properties or
FHTs operations or (iii) FHTs insurers, may be unable to honour their commitments to FHT.
There is also uncertainty as to the scale in the event of a downturn in the global economy, the
decrease in consumer demand and the impact of the global downturn on the economy of the
countries in which FHTs properties operate.
Investment in hospitality and hospitality-related assets in other countries will expose FHT to
additional local real estate market conditions.
Other real estate market conditions which may adversely affect the performance of FHT include
the attractiveness of competing hospitality and hospitality-related assets or an oversupply or
reduced demand for such hospitality and hospitality-related assets.
108
Further, FHT will be subject to foreign real estate laws, regulations and policies as a result of its
property investments in foreign countries. Measures and policies adopted by the relevant foreign
governments and regulatory authorities at national, provincial or local levels, such as government
control over property investments or foreign exchange regulations, might negatively impact FHTs
properties in foreign countries. Legal protection and recourse available to FHT in certain countries
may be limited.
In addition, the income and gains derived from investment in hospitality and hospitality-related
assets will be subject to various types of taxes in the countries where the assets are located,
including income tax, withholding tax, capital gains tax and any other taxes that may be imposed
specifically for ownership of real estate. All of these taxes, which are subject to changes in laws
and regulations that may lead to an increase in tax rates or the introduction of new taxes, could
adversely affect and erode the returns from these hospitality and hospitality-related assets and
hence affect the distribution yield to Stapled Securityholders. There is also no assurance that FHT
will be able to repatriate to Singapore the income and gains derived from investment in hospitality
and hospitality-related assets outside Singapore on a timely and regular basis. Any inability to
repatriate the income and gains to Singapore will adversely affect FHTs ability to make
distributions to Stapled Securityholders out of such income and gains.
Acts of God, wars, terrorist attacks, riots, civil commotions, widespread communicable
diseases (such as the human avian flu and severe acute respiratory syndrome (SARS))
and other events beyond the control of FHT may adversely affect the business, financial
condition, results of operations and prospects of FHT.
The hospitality and hospitality-related industries and FHT may be adversely affected by acts of
God, wars, terrorist attacks, riots, civil commotions, widespread communicable diseases (such as
the human avian flu and SARS) and other events beyond the control of FHT. The Managers cannot
predict the occurrence of these events and the extent to which they will, directly or indirectly,
impact distributions to the Stapled Securityholders, the hospitality and hospitality-related
industries or the business, financial condition, results of operations and prospects of FHT in the
future.
An increased threat of terrorism, terrorist events, airline strikes, hostilities between countries or
natural disasters may affect travel patterns and reduce the number of business and commercial
travellers and tourists, in general or any other countries in which the hospitality and hospitality-
related assets of FHT may be located in the future.
The outbreak of an infectious disease such as Influenza A (H1N1-2009), avian influenza or SARS
in Asia and elsewhere, together with any resulting restrictions on travel and/or imposition of
quarantines, could have a negative impact on the economy and business activities in Asia and
elsewhere and could thereby adversely impact the revenues and results of FHT. There can be no
assurance that any precautionary measures taken against infectious diseases would be effective.
Upon the outbreak of SARS, other widespread communicable diseases, or dangerous levels of
radioactive contamination, the World Health Organisation and certain governments may issue
travel advisories against nonessential travel to affected regions, or even impose travel
restrictions. Travel advisories or restrictions are likely to have a material adverse effect on the
number of international visitor arrivals to the affected countries (which could include countries in
which FHT has assets) and therefore the corresponding demand for hotel rooms under FHTs
portfolio of assets. Accordingly, the spread of the human avian flu or any other contagious or
virulent disease, and any consequential travel advisories or restrictions may adversely affect the
business, financial condition, results of operations and prospects of FHT.
109
Possible change of investment strategies may affect the Stapled Securityholders
investments in FHT.
The Managers may from time to time amend the investment strategies of FHT if they determine
that such change is in the best interest of FHT and its Stapled Securityholders subject to the
approval of the Stapled Securityholders if such change occurs within the first three years following
the Listing Date. Following the expiry of three years from the Listing Date, the Managers may,
subject to the requirements under the relevant laws, regulations and rules (including the Listing
Manual) and within the limits of the Deeds (as defined herein), alter such investment strategies
(subject to the requirements under the relevant laws, regulations and rules (including the Listing
Manual) and within the limits of the Deeds) without the approval of the Stapled Securityholders by
giving not less than 30 days prior notice of the change to the REIT Trustee and the Stapled
Securityholders by way of an announcement on SGXNET. The methods of implementing FHTs
investment strategies may vary as new investment and financing techniques are developed or
otherwise used. Such changes may adversely affect the Stapled Securityholders investment in
FHT.
FH-REIT has no direct control over the Hotel Managers and the Serviced Residence
Operators.
The financial performance of FH-REIT, including the distributions which may be made to Stapled
Securityholders, is dependent upon the rental payments from the Master Lessees or Tenant. The
ability of the Master Lessees or Tenant to make such rental payments is dependent on the Gross
Operating Revenue and Gross Operating Profit of each of the Properties. FH-REIT has entered
into long-term master lease agreements and a Tenancy Agreement
1
with each of the Master
Lessees and Tenant (as the case may be) which generally have, subject to certain limitations, full
discretion in the operation of the Properties. The Master Lessees and Tenant have in turn each
entered into a hospitality management agreement with the Hotel Managers or the Serviced
Residence Operators. Although FH-REIT has the right, under certain limited circumstances, to
approve the replacement of the Hotel Managers or the Serviced Residence Operators, there is no
direct contractual relationship between FH-REIT and the Hotel Managers. While the REIT Trustee
and the Managers are parties to the Serviced Residence Management Agreements, this is for the
purposes of their payment of fees
2
to the Serviced Residence Operators in cash and/or Stapled
Securities, as may be elected by the Managers. Accordingly, the financial performance of FH-REIT
is dependent on the performance of the Master Lessees, the Tenant, the Hotel Managers and the
Serviced Residence Operators, even though FH-REIT has no control over the operations,
management, branding or marketing of the Properties. There is therefore no assurance that the
Properties will continue to be operated, managed, maintained, branded or marketed well in the
future and this may consequently affect the business, financial condition, results of operations and
prospects of FHT.
1
Within 14 business days from the commencement date of the Tenancy Agreement, the Tenant is obliged to apply for
the approval of the relevant state authority on the conversion of the tenancy into a lease for 20 years with an option
for the lessee to obtain an additional lease for a further 20 years. (See Certain Agreements Relating to FHT,
FH-REIT, FH-BT and the Properties Agreements Relating to The Westin Kuala Lumpur Tenancy Agreement.)
2
FH-REIT is responsible for payment of the fees to the Serviced Residence Operators as the payments due from the
Master Lessees to FH-REIT under the respective Master Lease Agreements in respect of the Serviced Residences
are made gross of such fees because such fees are not included as part of the Master Lessees operating expenses.
110
If the CMS Licence of the REIT Manager is cancelled or not renewed by the MAS or the
authorisation of FH-REIT as a collective investment scheme under Section 286 of the SFA
is suspended, revoked or withdrawn, the operations of FH-REIT will be adversely affected.
The CMS Licence issued to the REIT Manager is subject to conditions and is valid unless
otherwise cancelled or renewed. If the CMS Licence of the REIT Manager is cancelled by the
MAS, it will not be able to continue to be the manager of FH-REIT and the operations of FH-REIT
will be adversely affected if no suitable manager is found or can be found in a timely manner.
FH-REIT was authorised as a collective investment scheme on 30 June 2014 and must comply
with the requirements under the SFA and the Property Funds Appendix. In the event that the
authorisation of FH-REIT is suspended, revoked or withdrawn, its operations will also be
adversely affected.
There is no assurance that FHT will be able to leverage on the Sponsors experience in the
operation of hospitality properties.
Upon completion of the Offering, the Sponsor will hold an effective interest in 22.0% of the Stapled
Securities, and accordingly be a controlling holder of FH-REIT Units and FH-BT Units. (See
Ownership of the Stapled Securities for further details.) The Sponsor has agreed to the Lock-up
Period in respect of its effective interest in the Lock-up Stapled Securities held by it on the Listing
Date. There is no assurance that the Sponsor will not dispose of all or part of its effective interest
in the Stapled Securities following the expiry of the Lock-up Period. In the event that the Sponsor
decides to transfer or dispose of its effective interest in the Stapled Securities, FHT may no longer
be able to leverage on the Sponsors experience in the ownership and operation of hospitality
properties, market research and network of contacts in the hospitality and hospitality-related
industries to further its growth. This may have a material and adverse impact on FHTs results of
operations and financial condition which may, as a consequence, affect FHTs ability to make
distributions to Stapled Securityholders.
FH-REITs strategy of investing mainly in hospitality and hospitality-related assets may
entail a higher level of risk compared to trusts with a more diverse range of investments.
FH-REIT is a Singapore-based REIT established with the principal investment strategy of
investing, directly or indirectly, in a diversified portfolio of income-producing real estate located
anywhere in the world except Thailand which is used primarily for hospitality and/or hospitality-
related purposes, as well as real estate-related assets in connection with the foregoing. A
concentration of investments in a portfolio of such specific real estate assets may cause FH-REIT
to be susceptible to a downturn in the real estate market as well as the global hospitality industry.
This may lead to a decline in occupancy and room rates for the Properties and/or a decline in the
capital value of FH-REITs portfolio, which will have an adverse impact on FHTs distributions to
the Stapled Securityholders and/or on the business, financial condition, results of operations and
prospects of FHT.
111
Future acquisitions may not yield the returns expected, may result in disruptions to FHTs
business, may strain management resources and may result in dilution of holdings.
FHTs external growth strategy and its market selection process may not be successful and may
not provide positive returns to Stapled Securityholders. There are risks associated with pursuing
further acquisitions of hospitality related assets and successfully integrating them into FH-REITs
portfolio. For example, the expected benefit, synergies or efficiencies from such acquisitions may
take longer than expected to be achieved or may not be achieved at all. In addition, acquisitions
may cause disruptions to the operations of FHT and divert the managements attention away from
day-to-day operations. New Stapled Securities issued as consideration for or otherwise in
connection with any new acquisition could also be dilutive to existing Stapled Securityholders.
FHT may be subject to liability in connection with any future disposal of investments.
FHT may dispose of investments in certain circumstances and may be required to give
representations and warranties or be subject to defect liabilities in connection with a disposal of
such investments. In the event that any such representations or warranties are inaccurate or any
defects are found, FHT may be exposed to damages and other claims. Any liability in respect of
any such representations or warranties or defect liabilities may adversely affect the business,
financial condition, results of operations and prospects of FHT and in turn, its ability to make
distributions to Stapled Securityholders.
In relation to The Westin Kuala Lumpur, FH-REIT has entered into a lease non-disturbance
agreement with the Hotel Manager which provides that FH-REIT shall procure that the Hotel
Manager continues to manage the Property in the event of a sale of the Property and/or a
termination of the Tenancy Agreement. In this regard, this may adversely affect the ability of
FH-REIT to dispose of The Westin Kuala Lumpur.
In relation to ANA Crowne Plaza Kobe, the Retail Master Lease Agreement has a perpetual lease
term and cannot be unilaterally terminated by FH-REIT. In this regard, this may adversely affect
the ability of FH-REIT to dispose of ANA Crowne Plaza Kobe or its ability to obtain a more
favourable price as a purchaser will have to buy the Property, subject to the Retail Master Lease
Agreement, unless FH-REIT and the Retail Master Lessee mutually agree to terminate the Retail
Master Lease Agreement. Pursuant to the EPTMK Share Purchase Agreement in respect of the
acquisition of the entire issued share capital of Excellence TMK Pte. Ltd.
1
, in the event of the
termination of Retail Master Lease Agreement, the REIT Trustee shall pay to Excellence
Prosperity (Singapore) Pte. Ltd. a sum of a value to be mutually agreed between the parties and
the value shall take into consideration the discounted cash-flow valuation of the underlying retail
leases. (See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties
Agreements Relating to ANA Crowne Plaza Kobe Share Purchase Agreements and Certain
Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements Relating to ANA
Crowne Plaza Kobe Retail Master Lease Agreement for further details.)
1
Excellence TMK Pte. Ltd. holds 49.5% of the preferred shares and 100.0% of the specified shares issued by Kobe
Excellence TMK. Kobe Excellence TMK holds the TBI in ANA Crowne Plaza Kobe.
112
The amount FH-REIT may borrow is subject to the aggregate leverage limit set out in the
Property Funds Appendix, which may affect the operations of FHT.
Under the Property Funds Appendix, FH-REITs total borrowings, including deferred payments for
assets whether to be settled in cash, FH-REIT Units or, as the case may be, Stapled Securities,
may not exceed 35.0% of the value of the FH-REIT Deposited Property at the time the borrowing
is incurred (the Aggregate Leverage). The Aggregate Leverage limit may be increased up to a
maximum of 60.0% only if FH-REIT obtains and discloses to the public a credit rating from Fitch
Ratings (Fitch), Moodys Investors Service (Moodys) or Standard & Poors (S&P). As at the
Listing Date, FH-REIT will have an Aggregate Leverage of 41.7% based on the Offering Price. The
REIT Manager has obtained, in respect of FH-REIT, a provisional credit rating
1
of (P) Baa2 (stable
outlook) from Moodys. (See Capitalisation and Indebtedness Indebtedness for further details.)
FHT may, from time to time, require further debt financing to achieve its investment strategies. In
the event that FHT decides to incur additional borrowings in the future, FHT may face adverse
business consequences of this limitation on future borrowings, and these may include:
an inability to fund capital expenditure requirements in relation to FH-REITs existing portfolio
or in relation to FH-REITs future acquisitions of additional hospitality and/or hospitality-
related assets to expand its portfolio;
a decline in the value of the FH-REIT Deposited Property may cause the borrowing limit to
be exceeded, thus affecting FH-REITs ability to incur further borrowings; and
cash flow shortages (including with respect to distributions) which FH-REIT might otherwise
be able to resolve by borrowings.
FHT may be affected by adverse developments or negative publicity affecting the brands of
the Hotel Managers.
The Hotels in the Initial Portfolio will be managed by different Hotel Managers under different
brand names. Any degradation or adverse market developments relating to the brand names of
these Hotel Managers and their respective affiliated brands could adversely affect the business,
financial condition, results of operations and prospects of FHT as such degradation or adverse
market developments may adversely affect the reputation of the Properties and their
attractiveness to guests and customers, thereby affecting the occupancy rates of the Properties.
1
The provisional credit rating assumes the listing of FHT on the SGX-ST, the drawdown of debt facilities of S$728.6
million and the acquisition of the Properties by FH-REIT. The final rating is conditional upon the successful
completion of all the events described in the foregoing sentence. The REIT Manager expects Moodys to assign its
final rating of FH-REIT on the Listing Date and will make an announcement on SGXNET of the final rating when it
has been assigned to FH-REIT. All ratings are subject to revision or withdrawal at any time. Moodys has not
provided its consent, for the purposes of Section 249 (read with Section 302) of the SFA, to the inclusion of the credit
rating information and is therefore not liable for such information under Sections 253 and 254 (read with Section
302) of the SFA and Sections 282N and 282O of the SFA. While the REIT Manager has taken reasonable action to
ensure that the information has been reproduced in its proper form and context, and that it has been extracted fairly
and accurately, neither the REIT Manager nor any other party has conducted an independent review of, nor verified
the accuracy of, such information. The provisional credit rating obtained from Moodys is current and Moodys will
be paid by FH-REIT to provide the credit rating. The credit rating is not a recommendation to invest in any securities.
Issuer credit ratings express Moodys opinion of an entitys creditworthiness and ability to meet its senior financial
obligations. More information on Moodys and its ratings are available on its website www.moodys.com.
113
The right of FH-REIT and FH-BT to use the Frasers brand name may cease.
A licence agreement dated 25 June 2014 has been entered into between Frasers Hospitality Asset
Management Pte. Ltd., Frasers Hospitality Trust Management Pte. Ltd. and the Sponsor (the FHT
Licence Agreement) to allow FH-REIT and FH-BT to use, inter alia, the Frasers names and
related trademark for, inter alia, activities relating to FHT and for so long as until either Frasers
Hospitality Asset Management Pte. Ltd. ceases to be the manager of FH-REIT or Frasers
Hospitality Trust Management Pte. Ltd. ceases be to the trustee-manager of FH-BT for whatever
reasons. If FH-REIT and FH-BT cease to have the right to use the Frasers brand name, this may
adversely affect the marketing activities and operations of FHT.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties FHT Licence
Agreement for further details.)
FHT may be affected by adverse developments or negative publicity affecting the Frasers
brand name.
FHT is closely associated with the Frasers brand name. Any degradation or adverse market
developments relating to the Frasers brand name or any negative publicity affecting the
Frasers hospitality properties could adversely affect the results of operations of the Properties.
Furthermore, any adverse developments, negative publicity and future financial challenges
experienced by the Sponsor may directly result in negative perceptions of FHT due to FHTs close
association with the Sponsor, which could have a material adverse effect on the financial condition
and results of operations of FHT and, in turn, its ability to make distributions to Stapled
Securityholders.
FHT does not have an established operating history.
FH-REIT and FH-BT were constituted on 12 June 2014 and 20 June 2014 respectively. The REIT
Manager was incorporated on 20 November 2013, while the Trustee-Manager was incorporated
on 13 January 2014. As such, FH-REIT, FH-BT and the Managers do not have operating histories
by which their respective past performances may be judged. This will make it more difficult for
prospective investors to assess their likely future performance. There can be no assurance that
(i) FH-REIT and FH-BT (in the event it is activated) will be able to generate sufficient rental
revenues and cashflows from operations to make distributions, (ii) such distributions will be in line
with those set out in Profit Forecast and Profit Projection, or (iii) FH-BT will generate sufficient
cash flow to meet its rental payment obligations to FH-REIT if it becomes a master lessee of any
of the Properties when required.
In addition, the MIT Manager was incorporated on 18 June 2014 and has been appointed to act
as manager of MIT Australia with the MIT Trustee. The MIT Manager is required to provide
investment management services to MIT Australia and there is no assurance that the MIT
Manager will be able to comply with all of its obligations.
FHT may depend on certain key personnel, and the loss of any key personnel may
adversely affect its operations.
The performance of FHT may depend, in part, upon the continued service and performance of
members of the senior management team and certain key senior personnel of the Managers.
These key personnel may leave the Managers in the future or compete with the Managers and
FHT. The loss of any of these individuals or of one or more of the Managers other key employees
and the inability to find suitable replacements on a timely basis could have a material adverse
effect on the financial condition and results of operations of FHT and in turn, its ability to make
distributions to Stapled Securityholders.
114
The Master Lessees and Tenant may not maintain the Properties properly.
The Master Lessees and Tenant may not maintain the Properties properly, resulting in substantial
capital expenditure that may be required to be incurred in the future. Lack of capital or insufficient
cash flow may adversely impact future operations and profitability of the Properties, thereby
adversely affecting the ability of the Master Lessees and Tenant to fund costs of repairs,
maintenance, renewals of FF&E, operating equipment
1
and inventories and/or to make rental
payments to FHT.
In addition, should the Master Lessees or the Tenant or the Hotel Managers or the Serviced
Residence Operators fail to provide adequate management and maintenance, the value of the
Properties may be adversely affected. Inadequate management and maintenance of the
Properties may also result in a loss of tenants and rental income from the Properties, which may
in turn adversely affect distributions to Stapled Securityholders.
FH-REIT may be adversely affected by a delay in the completion of asset enhancement
works currently in progress or contemplated.
Asset enhancement works are intended to be carried out at InterContinental Singapore in 2014
and are expected to be completed by 2015. Any delay in the completion of such asset
enhancement works may result in a potential loss in revenue, thereby adversely affecting the
financial condition and results of operations of the relevant Properties and the rental payments
made to FH-REIT. All this will in turn affect FHTs financial condition, results of operations and
ability to make distributions to Stapled Securityholders.
The REIT Manager may from time to time initiate asset enhancement on some of the Properties.
There is no assurance that such plans for asset enhancement will materialise, and even in the
event that they do materialise, they may incur substantial costs to FHT and yet not achieve their
desired results.
The Sponsor ROFR or the TCC ROFR will be terminated if the conditions to the Sponsor
ROFR or the TCC ROFR remaining in full force and effect are not satisfied.
To facilitate acquisition growth, the Sponsor has granted the Sponsor ROFR to FHT over any
future sales by a Relevant Entity (as defined herein) of income-producing properties located
anywhere in the world except Thailand, which are primarily used for hospitality and/or hospitality-
related purposes. Similarly, Mr Charoen Sirivadhanabhakdi and Khunying Wanna
Sirivadhanabhakdi have granted the TCC ROFR to FHT.
The rights under the Sponsor ROFR are granted to FHT with effect from the Listing Date and will
cease immediately upon the occurrence of any of the following events: (i) the REIT Manager or
any of its related corporations (as defined in the Companies Act) ceasing to be the manager of
FH-REIT, (ii) the Trustee-Manager or any of its related corporations ceasing to be the
trustee-manager of FH-BT, (iii) the Sponsor and/or any of its related corporations, alone or in
aggregate, ceasing to be a controlling shareholder of the Managers, or (iv) the Sponsor and/or any
of its related corporations, alone or in aggregate, ceasing to be a controlling unitholder of FH-REIT
and FH-BT. Similarly, the rights under the TCC ROFR are granted to FHT with effect from the
Listing Date and will cease immediately upon the occurrence of any of the following events: (i) the
REIT Manager or any of its related corporations ceasing to be the manager of FH-REIT, (ii) the
Trustee-Manager or any of its related corporations ceasing to be the trustee-manager of FH-BT,
1
Items customarily referred to as operating equipment in the hotel industry include, but are not limited to,
glassware, silverware, cutlery, chinaware, crockery, linen and uniforms as well as all those items generally required
for the day-to-day operation of a hotel.
115
(iii) any TCC Group Entity
1
and/or any of its related corporations, alone or in aggregate, ceasing
to be a controlling shareholder of the Managers
2
, or (iv) any TCC Group Entity and/or any of its
related corporations, alone or in aggregate, ceasing to be a controlling unitholder of FH-REIT and
FH-BT.
If any of the conditions to the Sponsor ROFR or the TCC ROFR ceases to be enforced, the
Sponsor ROFR or the TCC ROFR will terminate and FHT will not be able to benefit from the
Sponsor ROFR or the TCC ROFR. This may adversely affect FHTs ability to implement its
acquisition growth strategy.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Right of First
Refusal Agreements for further details.)
If FH-BT steps in as a master lessee for any of the Properties, it may be required to
indemnify the Hotel Manager or the Serviced Residence Operator.
In the event that FH-BT steps in as a master lessee for any of the Properties, it may be required
to indemnify the Hotel Manager or the Serviced Residence Operator against any claims arising
from the managing of the relevant Property, as the industry standard is for hotel or serviced
residence operators to act merely as agents of the owner/lessee of the hospitality property.
Accordingly, FH-BT may be required to indemnify the Hotel Manager or the Serviced Residence
Operator for all claims from employees working at the relevant Property as well as former
employees of the Property. There can be no assurance that any such claims will not adversely
impact FH-BTs financial condition thereby affecting its ability to perform its duties as a master
lessee, as well as its ability to make distributions (if any) to Stapled Securityholders.
Hospitality and hospitality-related businesses are capital intensive and the growth of FHT
may be affected if it is unable to obtain financing on favourable terms or at all.
The Properties will require periodic capital expenditures, refurbishments, renovation and
improvements to remain competitive. The acquisition or development of additional hospitality and
hospitality-related assets will require significant capital expenditures. There is no assurance that
FHT will be able to fund capital improvements or acquisitions solely from cash generated by its
operating activities. Additional equity or debt financing is subject to prevailing conditions in the
equity and debt markets, and may not be available on favourable terms or be available at all.
Further, the reserves for FF&E set aside by FHT may not be sufficient.
(See also the risk factor FHT faces risks associated with debt financing for further details.)
FHT faces risks associated with debt financing.
Both FH-REIT and FH-BT will be subject to risks associated with debt financing, including the risk
that their cash flow will be insufficient to meet required payments of principal and interest under
such financing and that past payment of the required principal and interest may leave FHT with
insufficient cash resources to properly make distributions to Stapled Securityholders.
The ability of FH-REIT or FH-BT to obtain additional debt or equity financing or both is dependent
on a number of factors outside its control such as local and global economic conditions, capital
and credit market and political stability. There can be no assurance that such financing will be
available on favourable terms or at all.
1
TCC Group Entity refers to any entity within the TCC Group or a private fund managed by the TCC Group.
2
As at the Latest Practicable Date, the Sponsor is approximately 87.9% directly owned by InterBev Investment
Limited and TCC Assets Limited, which are members of the TCC Group. Each of the Managers is wholly-owned by
the Sponsor. This condition under the TCC ROFR is therefore met.
116
Both FH-REIT and FH-BT will also be subject to the risk that the terms of any refinancing of
borrowings may not be as favourable and this may include an increase in interest expense. This
may adversely affect both FH-REITs and FH-BTs cash flow and the amount of distributions they
could make to Stapled Securityholders.
(See Risk Factors Risks Relating to an Investment in the Stapled Securities FHTs distribution
policy may cause FHT to face liquidity constraints and Capitalisation and Indebtedness for
further details.)
The Managers may not be able to successfully implement their investment strategy and/or
asset enhancement strategy for FHT.
There is no assurance that the Managers will be able to implement their investment strategy for
FHT successfully or that they will be able to expand the portfolio of FHT at any specified rate or
to any specified size. The Managers may not be able to make acquisitions or investments on
favourable terms or within a desired time frame. Consequently, FHTs ability to make new property
acquisitions under its acquisition growth strategy may be adversely affected. Even if FHT is able
to successfully acquire property or investments, there is no assurance that FHT will achieve its
intended return on such acquisitions or investments.
In addition, FHTs investment strategy involves a higher level of risk as compared to a portfolio
which has a more diverse range of investments.
There may also be significant competition for attractive investment opportunities from other
property investors, including other REITs, commercial property companies and private investment
funds. Potential sellers of real estate assets may view the necessity of raising equity capital to
fund an acquisition negatively and may prefer other purchasers. There is no assurance that FHT
will be able to compete effectively against other property investors.
The proposed acquisition by FHT of the Sponsor ROFR Properties and/or the TCC ROFR
Properties may require third party consents and there can be no assurance that such third parties
will give such consent. For example, consents from regulatory authorities, financial institutions
pursuant to covenants against sale or mortgages under the financing terms to the vendor, the
managers or operators of the hotels/ serviced residences and/or suppliers may not be obtained at
all or on terms that are satisfactory to the Managers.
Further, the Managers may from time to time initiate asset enhancement plans for some of the
Properties. There is no assurance that such plans for asset enhancement will materialise, or in the
event that they do materialise, they may not achieve their desired results or may incur significant
costs to FHT.
FHT may engage in hedging transactions, which can limit gains and increase exposure to
losses, and not offer full protection against interest rate and exchange rate fluctuations.
FHT may enter into hedging transactions to protect itself from the effects of interest rate
fluctuations on floating rate debt and exchange rate fluctuations
1
. Hedging transactions may
include entering into interest rate hedging instruments, purchasing or selling futures contracts,
purchasing put and call options or entering into forward agreements. However, it may not always
be possible for FHT to enter into hedging activities and hedging may not always have the desired
beneficial effect on the results of operations or financial condition of FH-REIT and/or FH-BT (as
the case may be). No hedging activity can completely insulate FH-REIT or FH-BT from risks
1
For the purposes of part of the purchase consideration for the Properties, FH-REIT has entered on 27 June 2014
into forward contracts to hedge the Singapore dollar equivalent to approximately JPY3,911 million, AUD71 million,
GBP44 million and MYR362 million to convert Singapore dollars to the respective currencies.
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associated with changes in interest rates and exchange rates, and changes in foreign exchange
rates for example, may negatively affect FH-REITs asset value. Moreover, interest rate hedging
could fail to protect FHT or adversely affect FHT because, among other things:
the available hedging may not correspond directly with the risk for which protection is sought;
the duration or nominal amount of the hedge may not match the duration of the related
liability;
the party owing money in the hedging transaction may default on its obligation to pay;
the credit quality of the party owing money on the hedge may be downgraded to such an
extent that it impairs the ability of FH-REIT and/or FH-BT (as the case may be) to sell or
assign its side of the hedging transaction; and
the value of the derivatives used for hedging may be adjusted from time to time in
accordance with accounting rules to reflect changes in fair value. Downward adjustments
and the significant loss in value of hedging instruments due to a write down to fair value
would reduce the net asset value (NAV) of FHT.
Hedging involves risks and typically involves costs, including transaction costs, which may reduce
overall returns. These costs increase as the period covered by the hedging increases and during
periods of rising and volatile interest rates. These costs will also limit the amount of cash available
for distributions to the Stapled Securityholders. The Managers will regularly monitor the feasibility
of engaging in such hedging transactions taking into account the cost of such hedging
transactions.
(See Capitalisation and Indebtedness and Strategy for further details.)
Property operation costs and expenses of the Properties may not decrease even if
occupancy rate declines.
Operating a hotel or a serviced residence involves a significant amount of fixed costs and such
costs will not vary significantly with high or low occupancy rates over a week, month or season.
As such, significant fixed costs may limit the ability of the operators of the Properties to respond
to adverse market conditions by minimising costs. Such limitations may have an impact on
profitability when the hospitality industry is weak. This may adversely affect the ability of the
Master Lessees and Tenant to make rental payments to FH-REIT and consequently, the ability of
FHT to make distributions to the Stapled Securityholders.
RISKS RELATING TO THE HOSPITALITY INDUSTRY
The financial performance of FHT is dependent on the condition and outlook of the
hospitality and hospitality-related industries, which are in turn susceptible to cyclicality
and other factors outside the control of FHT and the Managers.
Both the hospitality and hospitality-related businesses are cyclical and sensitive to external and
economic changes. There are a number of factors which are common to the regional and global
hospitality and hospitality-related industries and beyond the control of FHT and the Managers.
These factors could affect the financial performance of FHT, including the following but not limited
to:
the condition of, and changes in, the domestic, regional and global economies, including, but
not limited to, factors such as the political landscape, environmental conditions and
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epidemics that result from the spread of infectious diseases that may result in reduced
occupancy rates, room rates, visitors and demand for the hospitality or hospitality-related
assets of FHT;
unexpected increase in new supply of hotels and hence increased competition in the markets
in which FHT operates, which could adversely impact the occupancy levels and revenue of
the Properties or future hospitality or hospitality-related assets of FHT;
changes in FHTs relationships with, and the performance and reputation of the lessees,
hotel managers, service providers, lenders and other companies with whom FHT may
contract;
changes in government laws and regulations, fiscal policies and zoning ordinances, labour
laws and the related costs of compliance with laws and regulations, fiscal policies and
ordinances affecting FHT;
increased competition in hospitality and hospitality-related industries in countries in which
FHTs assets are located;
changes in business, commercial and leisure travel and tourism patterns, which may
fluctuate and tend to be seasonal;
changes in frequency of events or conferences in the surrounding vicinity of each Property
or future hospitality or hospitality-related assets of FHT;
unexpected increases in transportation or fuel costs, strikes among workers in the
transportation industry and adverse weather conditions that could affect travel demand;
increases in operating costs due to inflation, labour costs (including the impact of
unionisation), workers compensation and healthcare-related costs, maintenance costs,
utility costs, insurance and unanticipated costs such as those resulting from acts of nature;
changes in exchange rates that may adversely affect FHTs operating results, asset value,
liabilities or ability to finance its operations;
changes in interest rates and in the availability, cost and terms of debt financing and other
changes that may adversely affect FHTs ability to source capital to fund capital
expenditures, acquisitions and other general corporate purposes or to comply with debt
financing covenants;
changes to the fees charged by hotel operators or serviced residence operators;
difficulties in identifying hospitality and hospitality-related assets to acquire and difficulties in
completing and integrating acquisitions;
the nature and length of a typical hotel guests stay as hotel guests typically stay on a
short-term basis and there is no assurance of long-term occupancy for hotel rooms;
the time that it may take to construct, develop or complete the refurbishments of properties
and receive registrable title to such properties;
any restrictions in the ability to renovate the Properties and future assets of FHT in order to
preserve or expand demand for the Properties and such assets;
unfavourable publicity in relation to the Properties;
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the reputation and standing of the service providers, including restaurants located within the
Properties, future hotels and hospitality and hospitality-related assets of FHT;
the financial condition and liquidity of FHT;
risks relating to investments in hospitality and hospitality-related assets; and
other matters not yet known to the Managers or not currently considered material by the
Managers.
These factors could lead to deterioration in the ability of the Hotel Managers and the Serviced
Residence Operators to generate income and the amount of the rental payments from the Master
Lessees and Tenant. This would have adverse effects on the business, financial condition, results
of operations and prospects of FHT and reduce its ability to make distributions to the Stapled
Securityholders.
The hospitality industry is competitive and the performance of FHT may be affected by
increasing supply of hospitality assets in its key markets.
The hospitality industry is highly competitive and on-going completion of new hotels or
renovations of competing hotel properties can reduce the competitiveness of older or existing
properties. The Properties and future assets of FHT will experience competition primarily from
similar grade hotels in their immediate vicinity, and also with other hotels in their geographical
market. The level of competition is affected by various factors, including (i) changes in local,
regional and global economic conditions, (ii) changes in local, regional and global populations, (iii)
the supply and demand for hospitality properties and (iv) changes in patterns and preferences or
customs. The success of a hotel or a serviced residence will largely depend on its ability to
compete in areas such as quality of accommodation, room rates, level of service, brand
recognition, convenience of location and the quality of lobby areas, F&B facilities and other
amenities. Competing hotels may offer more facilities at their premises at similar or more
competitive prices compared to the facilities offered at the Properties. Competitors may also
significantly lower their rates or offer greater convenience, services or amenities to attract more
customers. If these efforts are successful, the results of operations at the Properties may be
adversely affected. (See Business and Properties Outlook for the Hospitality Sector for details
of the competition.)
A general inability of the Properties to compete effectively could adversely affect the business,
financial condition, results of operations and prospects of FHT and in turn, its ability to make
distributions to Stapled Securityholders.
The hospitality industry is service-oriented and FHT may be adversely affected if the Master
Lessee and Tenant are unable to compete effectively for skilled hospitality employees.
The hospitality industry is a service-oriented industry and is very labour-intensive. Competitors
may compete aggressively for skilled hospitality employees, which would increase the operating
cost of the Properties. In addition, the hospitality staff of the Master Lessees and Tenant may be
poached by existing or new competitors in the market, which may have an adverse effect on the
operations of the affected Property. A shortage of manpower may translate to lower service quality,
which may in turn affect guests lodging experience and lead existing customers to prefer
alternative accommodation from competitors of FHT.
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The hospitality business is regulated and operations of the Properties require licences, and
any failure to obtain, renew or obtain the transfer of, such licences may adversely affect the
operations of FHT.
The operation of hotels is generally subject to various local laws and regulations such as the
Hotels Act, Chapter 127 of Singapore (the Hotels Act) and the Innkeepers Act, Chapter 139 of
Singapore, which hotels in Singapore are required to be licensed under. In addition, the countries
in which the Properties are located (such as Australia and the United Kingdom) have licensing
requirements in relation to the sale of alcohol on the premises. Such laws and regulations may
require FH-REIT, FH-BT, their subsidiaries, the Master Lessees, the Tenant and/or the Hotel
Managers to be licensed and to obtain other approvals to own, operate and lease the Properties.
The withdrawal, suspension or non-renewal of any approvals and/or licences, or the imposition of
any penalties, as a result of any infringement or non-compliance with any laws, rules or
regulations applicable to the Properties, will have an adverse impact on the businesses at the
Properties and their results of operations. Further, any changes in such laws, rules and
regulations may also impact the businesses at the Properties and may result in higher costs of
compliance. Any failure to comply with new or revised laws, rules and regulations could result in
the imposition of fines or other penalties by the relevant authorities. This could have an adverse
impact on the revenue and profits of the Properties or otherwise adversely affect their operations.
There can be no assurance that the tourism promotion authorities in Singapore, Australia,
the United Kingdom, Japan and Malaysia will succeed in increasing tourism receipts or that
such success, if any, will improve the financial performance of FHT.
The financial performance of the Properties may be affected by the tourism industry in the
respective countries. In this regard, there can be no assurance that the initiatives taken by the
tourism promotion authorities in Singapore, Australia, the United Kingdom, Japan and Malaysia to
increase tourism receipts will be successful. Even if these initiatives are successful, it is not
certain that an increase in tourism receipts would lead to a corresponding increase in the number
of visitors or the length of their stay. Furthermore, an increase in the number of visitors or the
length of their stay may not result in an increase in the revenues or gross operating profits of the
Properties, or an increase in rental payments received by FHT.
RISKS RELATING TO INVESTING IN REAL ESTATE
FHT may be adversely affected by the illiquidity of its real estate investments.
FHTs investment strategy is to invest principally in hospitality and hospitality-related assets. This
involves a higher level of risk as compared to a portfolio which has a diverse range of investments.
Real estate investments, particularly investments in high value properties such as the Properties
and those in which FHT intends to invest, are relatively illiquid. Such illiquidity may affect FHTs
ability to optimise its investment portfolio or liquidate its assets in response to changes in
economic, real estate market or other conditions. For instance, FHT may be unable to sell its
assets on short notice or may be forced to give a substantial reduction in price in order to achieve
a quick sale. FHT may face difficulties in securing timely and commercially favourable financing
in asset-based lending transactions secured by real estate due to the illiquid nature of real estate
assets. These factors could have an adverse effect on FHTs financial condition and results of
operation, with a consequential adverse effect on FHTs ability to deliver expected distributions to
Stapled Securityholders.
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The properties owned by FHT or a part of them may be acquired compulsorily by the
respective governments in the countries in which such properties are located.
The Initial Portfolio will comprise properties which are located in Singapore, Australia, the United
Kingdom, Japan and Malaysia. Under the laws and regulations of each country, there are various
circumstances under which the respective governments of each country are empowered to
acquire some of the Properties.
In the event that the compensation paid for the compulsory acquisition of any Property is less than
the market value of the Property, such compulsory acquisitions would have an adverse effect on
the gross revenue of FHT and the value of its asset portfolio.
FHT may in future acquire hospitality and hospitality-related assets located in other countries. The
laws of these countries may also provide for a right by the governments of these countries to
compulsorily acquire any land or property with no compensation to the owner, or for compensation
below market value. Such compulsory acquisitions would have an adverse effect on the revenue,
results of operations and value of FHTs asset portfolio.
As an example, pursuant to the provisions of the applicable legislation (including the Land
Acquisition Act 1960), the Government of Malaysia has the power to compulsorily acquire any land
in Malaysia for public interest considerations. In the event of any compulsory acquisition of
property in Malaysia, the amount of compensation to be awarded is based on the market value of
a property and is assessed on the basis prescribed in the Land Acquisition Act 1960 and other
relevant laws. If The Westin Kuala Lumpur were acquired compulsorily by the Government of
Malaysia, the level of compensation paid to the Malaysian SPV might be less than the price which
the Malaysian SPV paid for such property or less than the market price of such property upon its
sale in the open market or that the compensation received may be insufficient to pay off the Class
A Senior MTNs, Class B Junior MTNs and Class C Junior MTNs issued by the Malaysian SPV
under the MTN Programme. Such compulsory acquisition could have an adverse effect on the
financial condition, results of operations and prospects of FHT and in turn, its ability to make
distributions to Stapled Securityholders.
There may also be a delay between the compulsory acquisition and the payment of compensation,
and this may also have an adverse effect on FH-REITs cash flow position.
FHTs ability to make distributions to Stapled Securityholders may be adversely affected by
increases in its property expenses and other operating expenses.
FHTs ability to make distributions to Stapled Securityholders could be adversely affected if its
property expenses and other operating expenses increase (save for such expenses which FHT is
not responsible for pursuant to the Master Lease and Tenancy Agreements) without a
corresponding increase in revenue or rental payments.
Factors that could increase property expenses and other operating expenses include:
increase in property tax assessments and other statutory charges;
change in statutory laws, regulations or government policies that increase the cost of
compliance with such laws, regulations or policies;
change in direct or indirect tax policies;
increase in sub-contracted service costs;
increase in labour costs;
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increase in repair and maintenance costs;
increase in cost of utilities
increase in insurance premiums;
increase in the rate of inflation; and
defects affecting, or environmental pollution in connection with, FHTs properties that need
to be rectified, leading to unforeseen capital expenditure.
The gross revenue earned from the Properties and the value of the Properties may be
adversely affected by a number of factors.
The gross revenue earned from the Properties and the value of the Properties may be adversely
affected by a number of factors, including, but not limited to:
FHTs ability to collect rent from the Master Lessees and Tenant on a timely basis or at all;
the amount and extent to which FHT is required to grant rental rebates to the Master Lessees
and Tenant;
defects affecting the Properties which could affect the operations of the Hotel Managers or
the Serviced Residence Operators resulting in the inability of the Master Lessees and Tenant
to make timely payment of rent or at all;
the sub-lessees or operators seeking the protection of bankruptcy or insolvency laws which
could result in delays in the receipt of rent payments, inability to collect rental income, or
delays in the termination of the lease, or which could hinder or delay the re-letting of the
space in question or the sale of the relevant property;
the local and international economic climate and real estate market conditions (such as
oversupply of, or reduced demand for space, changes in market rental rates and operating
expenses for the Properties);
vacancies following the expiry or termination of leases (with or without cause) that lead to
reduced occupancy rates;
terms agreed under new master leases (or sub-leases) and tenancies being less favourable
than those under current master leases (or sub-leases) or tenancies;
the Managers ability to provide adequate management and maintenance or to purchase or
put in place adequate insurance;
competition from other hotels for customers;
changes in laws and governmental regulations in relation to real estate, including those
governing usage, zoning, taxes and government charges. Such revisions may lead to an
increase in management expenses or unforeseen capital expenditure to ensure compliance.
Rights related to the Properties may also be restricted by legislative actions, such as
revisions to the laws relating to building standards or town planning laws, or the enactment
of new laws related to condemnation and redevelopment; and
acts of God, wars, terrorist attacks, riots, civil commotions, widespread communicable
diseases, natural disasters and other events beyond the control of the Managers.
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RISKS RELATING TO AN INVESTMENT IN THE STAPLED SECURITIES
The actual performance of FHT and the Properties could differ materially from the
forward-looking statements in this Prospectus.
This Prospectus contains forward-looking statements including, among other things, the forecast
and projected distribution levels for the period from the Forecast Period 2014 to the Projection
Year 2015. These forward-looking statements are based on a number of assumptions which are
subject to significant uncertainties and contingencies, many of which are outside FHTs control
(see Profit Forecast and Profit Projection Assumptions for further details).
Some or all of the events and circumstances contained in these forward-looking statements may
not occur as expected, or events and circumstances which are not currently anticipated may arise.
Actual results and performances of FHT and the Properties may differ materially from that forecast
in these forward-looking statements.
FH-BT will be dormant as at the Listing Date. The forecast and projected distributions of FHT in
this Prospectus are based on (i) the forecast and projected distribution of FH-REIT and (ii) FH-BT
remaining dormant during Forecast Period 2014 and Projection Year 2015. In the event that
FH-BT becomes active, it is likely that the actual distributions of FHT for Forecast Period 2014 and
Projection Year 2015 will differ materially from the forecast and projected distributions of FHT in
this Prospectus.
Further, while profit forecasts are prepared for Forecast Period 2014, it should be noted that due
to the seasonal nature of the hospitality business, the financial performance of hospitality
properties is generally better in the second half of the year as compared to the first half of the year.
Activities carried out by FH-BT may affect the returns of FHT.
As at the Listing Date, FH-BT will be dormant. It will, however, become active if FH-REIT is unable
to appoint a master lessee for any of the Properties in its portfolio at the expiry of the relevant
master lease agreement or for a hospitality property newly acquired by FH-REIT. In such
circumstances, FH-BT will be appointed by FH-REIT as a master lessee for that property, and
FH-BT will in turn appoint the Hotel Manager or the Serviced Residence Operator to manage the
day-to-day operations and marketing of the hospitality property. FH-BT exists primarily as a
master lessee of last resort.
FH-BT may also become active if it undertakes certain hospitality or hospitality-related
development projects, acquisitions and investments which may be unsuitable for FH-REIT. In this
regard, FH-BT will generally be considered to be active in the event that it carries out on any
business activity other than:
activities which FH-BT is required to carry out under any applicable law, regulation, rule or
directive of any agency, regulatory or supervisory body;
the lending or use of the initial S$10,000 working capital raised from the Offering; or
equity fund-raising activities and issue of new FH-BT Units carried out in conjunction with
FH-REIT which are solely for the purposes of funding FH-REITs business activities.
When FH-BT becomes active, it will face additional risks including, but not limited to, material
losses suffered as a result of business or commercial risks, downturns in the relevant economies
or markets, a lack of demand for its products and services and an inability to compete effectively
against other competitors. Should FH-BT suffer losses, or should its relative returns based on
criteria such as capital or equity employed be lower than that of FH-REIT, the returns of FHT may
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be adversely affected since such returns comprise an aggregate of returns from both FH-REIT and
FH-BT. Such risks will be different from the risk profile of FHT as at the Listing Date, which is
essentially that of a property owner deriving mainly rental income from the Master Lessees and
Tenant.
Fluctuation of the Australian dollar, the Pound Sterling, the Japanese Yen or the Malaysian
Ringgit could adversely affect the value of distributions paid in respect of the Stapled
Securities.
Since the income and profit of FHT from its assets are denominated in the currencies of the
countries in which the Properties are located, any fluctuation in the value of these currencies may
adversely affect the value of distributions paid in respect of FHT in Singapore dollars. For
instance, as the UK Properties constitute a significant portion of the Initial Portfolio, its earnings
and cash flow position (including its NAV per Stapled Security) may be adversely affected if the
Pound Sterling weakens against the Singapore dollar.
The Stapled Securities may be subsequently unstapled.
The Stapled Securities may be unstapled for various reasons as set out in the Stapling Deed. In
particular, the Stapled Securityholders may, for various reasons, after the Listing Date, decide that
the Stapled Securities should be unstapled, subject to the Stapling Deed, the FH-REIT Trust
Deed, the FH-BT Trust Deed and any relevant legislation. In the event that unstapling should
occur, the structure of FHT may be undermined and there may be ramifications and adverse
effects to Stapled Securityholders. As the letter of eligibility issued by the SGX-ST to FHT for the
listing and quotation on the Main Board of the SGX-ST is in relation to the Stapled Securities and
does not extend to the listing and quotation of the individual components of the Stapled Securities,
being FH-REIT Units and FH-BT Units, upon unstapling, the Stapled Securities will be de-listed
from the SGX-ST. As a result, investors ability to liquidate their investments in FH-REIT Units
and/or FH-BT Units in response to changes in economic, real estate market or other conditions
may be adversely affected and the realisable value of FH-REIT Units and FH-BT Units may be less
than their fair values.
(See The Formation and Structure of FHT, FH-REIT and FH-BT The Formation and Structure
of FHT Unstapling for further details.)
The market price of the Stapled Securities may be adversely affected by a sale or possible
sale of a substantial number of Stapled Securities by the Sponsor, TCC Hospitality or the
Cornerstone Investors in the public market following the lapse of any applicable lock-up
arrangements.
Following the Offering, FHT will have 1,192,628,000 issued Stapled Securities of which 22.0% of
the total number of Stapled Securities in issue immediately after the Listing will be held by the
Sponsor, 43.0% will be held by TCC Hospitality (assuming the Over-Allotment Option is not
exercised) and 19.5% Stapled Securities will be held by the Cornerstone Investors. If any of the
Sponsor, the Sponsor Entity, TCC Hospitality, the shareholders of TCC Hospitality and/or their
transferees of the Stapled Securities (following the lapse of the relevant respective lock-up
arrangement, or pursuant to any applicable waivers) or any of the Cornerstone Investors sells or
is perceived as intending to sell a substantial amount of its Stapled Securities, or if a secondary
offering of the Stapled Securities is undertaken in connection with an additional listing on another
securities exchange, the market price for the Stapled Securities could be adversely affected.
(See Plan of Distribution Lock-up Arrangements and Ownership of the Stapled Securities for
further details.)
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The NAV per Stapled Security may be diluted if further issues are priced below the current
NAV per Stapled Security.
New Stapled Securities may be issued at a subscription price at or below the current NAV per
Stapled Security. Where new Stapled Securities, including Stapled Securities which may be
issued to the REIT Manager and/or the Trustee-Managers management fees, are issued at less
than the current NAV per Stapled Security, the NAV of each existing Stapled Security will be
diluted.
FHT may be affected by the introduction of new or revised legislation, regulations,
guidelines or directives affecting Registered Business Trusts and/or REITs.
FHT may be affected by the introduction of new or revised legislation, regulations, guidelines or
directives affecting business trusts registered with the MAS (Registered Business Trusts)
and/or REITs. There is no assurance that new or revised legislation, regulations, guidelines or
directives will not adversely affect Registered Business Trusts in general, REITs in general or FHT
specifically.
FHT may not be able to comply with the terms of the Tax Transparency Ruling and the
Foreign Sourced Income Tax Exemption Rulings (collectively, the Tax Rulings), or the Tax
Rulings may be revoked or amended.
FH-REIT and the Singapore Subsidiaries have obtained the Tax Rulings from the IRAS under
which tax transparency in respect of the Specified Taxable Income and Singapore tax exemption
on certain foreign sourced trust distributions, interest income and dividend income received by
FH-REIT and Singapore Subsidiaries have been granted on stipulated terms and conditions. The
Tax Rulings are subject to FH-REIT and the Singapore Subsidiaries satisfying the stipulated
conditions. They may also be revoked either in part or in whole or the terms may be reviewed and
amended by the IRAS at any time. Further, the Tax Rulings are granted based on the facts
represented to the IRAS and where such facts turn out to be different from those represented to
the IRAS, or where there is a subsequent change in the tax laws or interpretation thereof, the Tax
Rulings may not apply.
If either or both of the Tax Rulings are revoked or if FH-REIT is unable to comply with the terms
thereof, the tax transparency or exemption may not apply, in which case, FHTs tax liability may
be affected which in turn could affect the amount of distributions made to Stapled Securityholders.
(See Taxation Singapore Taxation and Appendix F, Independent Taxation Report for further
details.)
Foreign Stapled Securityholders may not be permitted to participate in future rights issues
and preferential offerings by FHT.
The FH-REIT Trust Deed and the FH-BT Trust Deed provide that in relation to any rights issue, the
Managers may, in their absolute discretion, elect not to extend an offer of the Stapled Securities
under a rights issue or preferential offering to those Stapled Securityholders whose addresses, as
registered with CDP, are outside of Singapore. The rights or entitlements to the Stapled Securities
to which such Stapled Securityholders would have been entitled will be offered for sale and sold
in such manner, at such price and on such other terms and conditions as the Managers may
determine, subject to such other terms and conditions as the REIT Trustee and the Trustee-
Manager may impose. The proceeds of any such sale, if successful, will be paid to the Stapled
Securityholders whose rights or entitlements have been so sold, provided that where such
proceeds payable to the relevant Stapled Securityholders are less than S$10.00, the Managers
are entitled to retain such proceeds as part of the FH-REIT Deposited Property and the FH-BT
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Trust Property respectively. The holding of the relevant Stapled Securityholder may be diluted as
a result of such non-participation or not being able to participate in any rights issue or preferential
offering.
FHTs distribution policy may cause FHT to face liquidity constraints.
FH-REIT is required by the Tax Transparency Ruling to distribute at least 90.0% of its Specified
Taxable Income. If FH-REITs Specified Taxable Income is greater than its cash flow from
operations, there may be liquidity constraints and it may have to borrow to meet on-going cash
flow requirements in order to distribute at least 90.0% of its Specified Taxable Income since it may
not have any reserves to draw on. FH-REITs ability to borrow is, however, limited by the Property
Funds Appendix. Failure to make distributions would result in a breach of the terms of the Tax
Transparency Ruling and the REIT Trustee would be liable to pay income tax on its Specified
Taxable Income. Should FH-BT be active and profitable, the declaration and payment of
distributions by FH-BT will be at the sole discretion of the Trustee-Manager Board. FH-BT is not
compulsorily required to make any distributions to Stapled Securityholders. If any such
distributions are made to Stapled Securityholders, FH-BT may have to borrow in order to meet
outgoing cash flow requirements.
(See Taxation and Appendix F, Independent Taxation Report for further details.)
FHT may not be able to make distributions to Stapled Securityholders or the level of
distributions may fall.
The income which FH-REIT earns from its real estate investments depends upon, among other
factors,
the amount of rental income received; and
the level of property and other operating expenses incurred.
If the investments held by FH-REIT do not generate sufficient income, FHTs cash flow and ability
to make distributions to the Stapled Securityholders will be adversely affected. As such, FH-REIT
is highly reliant on the continued good performance of its investments to maintain distributions.
In addition, as FHTs investment in the Properties is through the entities held by FH-REIT, in order
to make distributions to the Stapled Securityholders, FHT will rely on the receipt of
dividends/distributions/interest/shareholders loan repayment (or other forms of repatriation), from
the entities held by FH-REIT.
There can be no assurance that the initial distribution will be as forecast and there can be no
assurance that FHT will have sufficient distributable or realised profits or surplus in any future
period to make distributions, pay interest, or make advances. The ability of the entities held by
FHT to pay dividends/distributions, make interest payments and repay shareholders loans may be
affected by a number of factors including, among other things:
their respective businesses and financial positions;
insufficient cash flows received from the assets;
applicable laws and regulations, which may restrict the payment of dividends/distributions by
the entities held by FHT;
operating losses incurred by the entities held by FHT in any financial year;
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changes in accounting standards, taxation laws and regulations, laws and regulations in
respect of foreign exchange repatriation of funds, corporation laws and regulations relating
thereto in Singapore, Australia, the United Kingdom, Jersey, Japan and/or Malaysia;
trapped cash in the entities held by FHT (as a result of depreciation being a mandatory
accounting expense under the applicable accounting standards), which cannot be effectively
utilised; and
the terms of agreements to which they are, or may become, a party.
Further changes in the applicable laws in Singapore, Australia, the United Kingdom, Jersey, Japan
and/or Malaysia may limit FHTs ability to pay or maintain distributions to the Stapled
Securityholders. There is no assurance that the level of distributions to the Stapled
Securityholders will not be adversely affected in the future. No assurance can be given as to FHTs
ability to pay or maintain distributions. Neither is there any assurance that the level of distributions
will increase over time, that there will be contractual increases in rent under the Master Lease and
Tenancy Agreements or increases in the operating revenue of the Properties or that the receipt of
rental or (as the case may be) operating revenue in connection with any expansion of the
Properties or further acquisitions of assets will increase FHTs income available for distribution to
Stapled Securityholders.
(See Distributions for further details.)
Market and economic conditions may affect the market price and demand for the Stapled
Securities.
Movements in domestic and international securities markets, economic conditions, foreign
exchange rates and interest rates may affect the market price of and demand for the Stapled
Securities.
An increase in market interest rates may have an adverse impact on the market price of the
Stapled Securities if the annual yield on the price paid for the Stapled Securities gives investors
a lower return as compared to other investments.
Certain provisions of the Singapore Code on Take-overs and Mergers (the Take-over
Code) could have the effect of discouraging, delaying or preventing a merger or
acquisition which could adversely affect the market price of the Stapled Securities.
Under the Take-over Code, an entity is required to make a mandatory offer for all the Stapled
Securities not already held by it and/or parties acting in concert with it (as defined in the Take-over
Code) in the event that an increase in the aggregate holdings of Stapled Securities of it and/or
parties acting in concert with it results in the aggregate holdings of Stapled Securities crossing
certain specified thresholds.
While the Take-over Code seeks to ensure an equality of treatment among the Stapled
Securityholders, its provisions could substantially impede the ability of Stapled Securityholders to
benefit from a change in control and, as a result, may adversely affect the market price of the
Stapled Securities and the ability to realise any potential change of control premium.
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Neither the REIT Manager nor the Trustee-Manager is obliged to redeem the Stapled
Securities.
Stapled Securityholders have no right to request either the REIT Manager or the Trustee-Manager
to redeem their Stapled Securities (while the Stapled Securities are listed on the SGX-ST. It is
intended that Stapled Securityholders may only deal in their listed Stapled Securities through
trading on the SGX-ST.
The Stapled Securities have never been publicly traded and the listing of the Stapled
Securities on the Main Board of the SGX-ST may not result in an active or liquid market for
the Stapled Securities.
Prior to the Offering, there is no public market for the Stapled Securities and an active public
market for the Stapled Securities may not develop or be sustained after the Offering. While a letter
of eligibility from the SGX-ST for the listing and quotation of the Stapled Securities on the Main
Board of the SGX-ST has been received, listing and quotation does not guarantee that a trading
market for the Stapled Securities will develop or, if a market does develop, the liquidity of that
market for the Stapled Securities. Prospective Stapled Securityholders should view the Stapled
Securities as illiquid and must be prepared to hold their Stapled Securities for an indefinite length
of time.
Although it is currently intended that the Stapled Securities will remain listed on the SGX-ST, there
is no guarantee of the continued listing of the Stapled Securities. Among other factors, FHT may
not continue to satisfy the listing requirements of the SGX-ST.
Further, it may be difficult to assess FHTs performance against either domestic or international
benchmarks.
The market price of the Stapled Securities may decline after the Offering.
The Offering Price of the Stapled Securities has been determined by agreement between the
Managers and the Joint Bookrunners. The Offering Price may not be indicative of the market price
for the Stapled Securities upon the completion of the Offering. The Stapled Securities may trade
at prices significantly below the Offering Price after the Offering. The trading price of the Stapled
Securities will depend on many factors, including:
the perceived prospects of the business and investments of FH-REIT and FH-BT (if any) and
the hospitality and hospitality-related real estate markets in Singapore;
differences between the actual financial and operating results of FHT and those expected by
investors and analysts;
changes in analysts recommendations or projection;
changes in general economic or market conditions;
the market value of the assets of FHT;
the perceived attractiveness of the Stapled Securities against those of other equity or debt
securities, including those not in the real estate sector;
the balance of buyers and sellers of the Stapled Securities;
the future size and liquidity of the Singapore REIT and business trust market;
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any changes from time to time to the regulatory system, including the tax system, both
generally and specifically in relation to Singapore REITs and business trusts;
the ability on the part of FH-REIT to implement successfully its investment and growth
strategies;
broad market fluctuations, including weakness of the equity market and increases in interest
rates; and
foreign exchange rates.
For these reasons, among others, the Stapled Securities may trade at prices that are higher or
lower than the NAV per Stapled Security. The issue of Stapled Securities under the Offering will
be at a premium to FHTs NAV. On the Listing Date, there will be a premium of 5.5% to the NAV
per Stapled Security based on the Offering Price. To the extent that FH-REIT retains operating
cash flow for investment purposes, working capital requirements or other purposes, these
retained funds, while increasing the value of its underlying assets, may not correspondingly
increase the market price of the Stapled Securities. Any failure on the part of FHT to meet market
expectations with regard to future earnings and cash distributions may adversely affect the market
price for the Stapled Securities.
In addition, the Stapled Securities are not capital-safe products. There is no guarantee that
Stapled Securityholders can realise a higher amount or even the principal amount of their
investment. If FHT, FH-REIT or FH-BT is terminated or liquidated, it is possible that investors may
lose all or a part of their investment in the Stapled Securities.
Third parties may be unable to recover claims brought against the Managers as the
Managers are not entities with significant assets.
Third parties, in particular, Stapled Securityholders, may in future have claims against the
Managers in connection with the carrying on of their respective duties as manager of FH-REIT and
trustee-manager of FH-BT (including in relation to the Offering and this Prospectus).
Under the terms of the FH-REIT Trust Deed, the REIT Manager is indemnified from the FH-REIT
Deposited Property against any actions, costs, claims, damages, expenses or demands to which
it may be put as the manager of FH-REIT unless occasioned by the fraud, gross negligence, wilful
default or breach of the FH-REIT Trust Deed by the REIT Manager. In the event of any such fraud,
gross negligence, wilful default or breach, only the assets of the REIT Manager itself and not the
FH-REIT Deposited Property would be available to satisfy a claim.
Under the terms of the FH-BT Trust Deed, the Trustee-Manager is indemnified from the FH-BT
Trust Property against any actions, costs, claims, damages, expenses or demands to which it may
be put as the trustee-manager of FH-BT unless occasioned by the fraud, wilful default, breach of
trust or where the Trustee-Manager fails to exercise the degree of care and diligence required of
a trustee-manager of a registered business trust under the BTA (Due Care). In the event of any
such fraud, wilful default, breach of trust or failure to exercise Due Care, only the assets of the
Trustee-Manager itself and not the FH-BT Trust Property would be available to satisfy a claim.
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GENERAL RISKS RELATING TO SINGAPORE, AUSTRALIA, THE UNITED KINGDOM,
JERSEY, JAPAN AND MALAYSIA
FHT may be exposed to risks associated with changes to laws and policies in Singapore,
Australia, the United Kingdom, Jersey, Japan and Malaysia.
FHT will initially be investing, directly or indirectly, in properties located in Singapore, Australia,
the United Kingdom, Japan and Malaysia and will be holding the Properties in United Kingdom
through Jersey companies. It will therefore be subject to foreign real estate laws, securities laws,
tax laws, any applicable laws relating to foreign exchange and related policies, and any
unexpected changes to the same. There can be no assurance that FHTs investments will not be
negatively impacted as a result of measures and policies adopted by the relevant foreign
governments and authorities at the local and national levels, including the imposition of foreign
exchange restrictions. There can also be no assurance that FHT will be able to repatriate the
income and gains derived from its investments and other assets in these foreign countries to
Singapore. It may also be difficult to obtain legal protection and recourse in some countries.
FHT is exposed to the risks associated with changes in the Japanese tax laws. The legal and
regulatory framework governing TMKs continues to evolve and be reviewed by lawmakers and
regulators. Additionally, the Japanese taxation system is undergoing significant changes as part
of reform measures designed to stimulate the overall economy in Japan. These and other factors
could lead to unanticipated changes in the tax laws and regulations relating to TMKs, which may
significantly increase the tax burden of Kobe Excellence TMK for any fiscal period and,
consequently, reduce the amounts of distribution that FHT may make to Stapled Securityholders.
In addition, the application of the reduced withholding tax rates under the Singapore-Japan
Avoidance of Double Taxation Agreement (Singapore-Japan DTA) on interest and/or dividend
income received by the relevant Singapore subsidiaries of FHT is subject to certain conditions.
These include the requirement for the recipient of such income to be the beneficial owner of the
income and to be a tax resident of Singapore. Under the Singapore-Japan DTA, the optimal
withholding tax rate on interest and dividends is 10.0% and 5.0% respectively, while the domestic
withholding tax rate on both interest and dividends is 20.0% (from 1 January 2013, for a period of
25 years, a 2.1% surtax will be imposed and this will increase the withholding tax rate to 20.42%).
There can therefore be no assurance that the relevant Singapore subsidiaries of FHT will, on an
on-going basis, be able to meet the requisite conditions to benefit from the reduced withholding
tax rates provided under the Singapore-Japan DTA. Where the reduced withholding tax rates are
not applicable, this would reduce FHTs income, which may in turn adversely affect the amount
available for distribution to Stapled Securityholders.
Further, FHT may be exposed to the risks associated with the changes to laws and policies in
other countries (besides Australia, the United Kingdom, Jersey, Japan and Malaysia) which it may
invest in, in the future.
FHT may be exposed to various types of taxes in Singapore, Australia, the United Kingdom,
Jersey, Japan and Malaysia.
The income and gains derived by FHT, directly or indirectly, from its Properties may be exposed
to various types of taxes in Singapore, Australia, the United Kingdom, Jersey, Japan and
Malaysia. These include but are not limited to income tax, withholding tax, capital gains tax and
other taxes specifically imposed for the ownership of such assets (see Taxation and Appendix
F, Independent Taxation Report). While the Managers intend to manage the taxation in each of
these countries efficiently, there can be no assurance that the desired tax outcome will necessarily
be achieved. In addition, the level of taxation in each of these countries is subject to changes in
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laws and regulations and such changes, if any, may lead to an increase in tax rates or the
introduction of new taxes. All these factors may adversely affect the level of distributions paid to
Stapled Securityholders.
The laws, regulations and accounting standards in Singapore, Australia, the United
Kingdom, Jersey, Japan and Malaysia.
FHT may be affected by the introduction of new or revised legislation, regulations or accounting
standards. Accounting standards in Singapore, Australia, the United Kingdom, Jersey, Japan and
Malaysia are subject to change as these accounting standards are further aligned with
international accounting standards.
The financial statements of FHT may be affected by the introduction of such revised accounting
standards. The extent and timing of these changes in accounting standards are unknown and
subject to confirmation by the relevant authorities.
There is no assurance that these changes will not:
have a significant impact on the presentation of FHTs financial statements;
have a significant impact on FHTs results of operations;
have an adverse effect on the ability of FHT to make distributions to Stapled Securityholders;
have an adverse effect on the ability of the Managers to carry out FHTs investment mandate;
and/or
have an adverse effect on the business, financial condition, results of operations and
prospects of FHT.
FHT may be exposed to the risks associated with the political and economic conditions in
Singapore, Australia, the United Kingdom, Japan, Malaysia and other countries which it
may invest in.
FHT will initially be investing, directly or indirectly, in properties located in Singapore, Australia,
the United Kingdom, Japan and Malaysia. Therefore, FHTs financial position and the results of its
operations will be affected by the general state of the economy in these countries and changes in
their political environments. FHT has limited control over any of these factors. The Japanese
economy has also experienced considerable volatility in recent times, and there can be no
assurance that such volatility will not occur in the future, which could have a material adverse
effect on the business, financial condition, results of operations and prospects of FHT. The value
of the Properties may be adversely affected by future policies of these foreign governments, an
economic downturn in these countries, including a slowdown of gross domestic product growth,
reduced level of employment, inflation, changes in interest rates, political upheavals, natural
disasters, insurgency movements, riots, local laws and external tensions with neighbouring
countries.
Foreign currencies may be subject to exchange controls.
There can be no assurance that the Australia, the United Kingdom, Jersey, Japan or Malaysia
government will not impose restrictive or other exchange controls. Any imposition, variation or
removal of exchange controls may adversely affect the value of the Stapled Securities or
FH-REITs ability to repatriate the proceeds of any distributions out of Australia, the United
Kingdom, Jersey, Japan or Malaysia (as the case may be).
(See also the risk factor The Malaysian Ringgit may be subject to exchange controls for further
details on exchange control risks in relation to Malaysia.)
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RISKS RELATING TO AUSTRALIA
Investments by FHT may be subject to Australias foreign investment regime.
Australias foreign investment regime will apply to subsequent acquisitions of Australian urban
land and some acquisitions in Australian corporations and trust estates by FHT. FIRB Clearance
may be required for such acquisitions (which may or may not be given or may be given subject to
conditions). If FIRB Clearance is required and not given in relation to a proposed investment, FHT
may not be able to proceed with that investment.
In this regard, although FHT has obtained FIRB Clearance for its acquisition of the Australian
Properties, there can be no assurance that FHT will be able to obtain any required FIRB
Clearances in the future. If future FIRB Clearances are required but not obtained, there may be
an adverse effect on the business, financial condition, results of operations and prospects of FHT
and, in turn, its ability to make distributions to Stapled Securityholders.
Investments in FHT may be subject to Australias foreign investment regime.
Following the listing of FHT on the SGX-ST, investors who are foreign persons that acquire
Stapled Securities are required under the FATA or the Policy to notify and receive FIRB Clearance
of their investment in FHT under Australias foreign investment regime from the Australian
Treasurer through FIRB in each of the circumstances set out below.
(a) If either FH-REIT or FH-BT is considered to be an AULTE, all investors in Stapled Securities
who are foreign persons will require FIRB Clearance.
(b) If FHT has gross Australian assets in excess of a specified threshold prescribed under FATA
(as at the date of this Prospectus, the threshold prescribed under FATA is AUD248.0 million),
any investors (i) who are foreign persons and (ii) who are acquiring a Substantial Interest in
FHT, will require FIRB Clearance.
(c) Any investor that is a Foreign Government Investor making a direct investment in FHT will
require FIRB Clearance, regardless of whether FHT is considered to be an AULTE or if FHT
has gross Australian assets in excess of AUD248.0 million.
There are also some other circumstances in which it may be prudent for an investor to seek FIRB
Clearance on a voluntary basis.
In addition to those instances where it is mandatory under the FATA for a foreign person to notify
FIRB and seek FIRB Clearance for a particular transaction (eg, acquisition of an interest in an
AULTE), there are other instances where, despite there being no mandatory notification
obligation, the Australian Treasurer may make adverse orders under the FATA if he or she
considers a particular transaction to be contrary to the national interest. In addition, FIRB Policy
may require a foreign person to notify FIRB and seek FIRB Clearance even where the FATA does
not so require (eg, Foreign Government Investors). The issue of a FIRB clearance removes the
risk of the exercise of the Australian Treasurers powers.
The voluntary clearance regime will relevantly apply if FHTs gross Australian assets are valued
at greater than AUD248 million (indexed annually) and 40% or more of the interests in FHT are
already held by foreign persons. In such case, any change to the foreign persons that hold Stapled
Securities in FHT without FIRB Clearance could trigger the Treasurers power to make adverse
orders if the relevant transaction were considered to be contrary to Australias national interest.
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In these circumstances, clearance may be sought on a voluntary basis. This would then preclude
the Treasurer from exercising his powers to make adverse orders in respect of the proposed
transaction.
As at the date of this Prospectus, based on the initial portfolio of hotels and serviced residences
in FH-REIT and on their current market values relative to the total value of FH-REITs assets,
FH-REIT is not an AULTE on the Listing Date and there are no residential properties comprised
in FH-REITs initial portfolio. As FH-BT is dormant on the Listing Date, FH-BT is not an AULTE on
the Listing Date.
If, contrary to the above, either FH-REIT or FH-BT is considered to be an AULTE, each foreign
person (ie, non-Australian) acquiring a Stapled Security in FHT would need to, as a matter of
current law, obtain FIRB Clearance.
In August 2013, an administrative exemption for certain passive investments by foreign persons
(other than Foreign Government Investors) in an AULTE was announced under the previous
Australian Government. Relevantly, the exemption was to apply to acquisitions of interests of less
than 10% in a listed trust that was an AULTE with predominantly non-residential properties.
The administrative exemption does not have the force of law and was intended to apply for an
interim period only, pending public consultation and clarification of the Australian Governments
position. However, there was a subsequent change of Government in Australia in September
2013, and the current Australian Government has not announced its policy position either way in
respect of the exemption.
Nonetheless, FHT understands that the administrative exemption remains operative as at the date
of this Prospectus on the basis that the administrative exemption remains published on FIRBs
website and no announcement has been made that it has been revoked. However, there is no
definitive clarity at this point as to the continued availability or terms of any such exemption in the
future.
If either FH-REIT or FH-BT becomes an AULTE in the future, because of a change in the portfolio
of hotels and serviced residences in FH-REIT or FH-BT and/or a change in their future market
values, this should not have any impact on FHTs financial performance.
However, if either FH-REIT or FH-BT becomes an AULTE in the future, this would have an adverse
effect on the price and/or liquidity of the Stapled Securities, as prospective buyers may factor into
their buying and pricing decisions the possibility that any purchase of Stapled Securities on the
secondary market may then require FIRB Clearance.
Based on the unaudited pro forma balance sheet of FH-REIT as at 31 December 2013, FHT has
gross Australian assets of approximately AUD170 million, which are not in excess of AUD248
million. However, if the value of the gross Australian assets of FHT increases beyond a value of
AUD248.0 million (or such other threshold as may apply at the relevant time), investors will require
FIRB Clearance for the acquisition of a Substantial Interest in FHT.
If an investor requires FIRB Clearance to acquire Stapled Securities and they:
acquire Stapled Securities without first notifying FIRB;
notify FIRB but proceed to acquire the Stapled Securities before receiving FIRB Clearance;
notify FIRB and obtain conditional FIRB Clearance, but do not comply with those conditions;
or
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notify FIRB and receive notice from FIRB that FIRB Clearance was not provided, but still
acquire Stapled Securities,
they may be found guilty of an offence and subject to a penalty. The current penalty for individuals
is a fine of up to AUD85,000 or two years imprisonment or both. Currently, corporations may be
subject to a fine of up to AUD425,000 and directors and officers of corporations who authorised
the conduct may be found guilty of an offence and themselves subject to penalties. The Treasurer
may also make an order requiring the investor to dispose of the relevant Stapled Securities within
a specified period of time. Failure to comply with such an order can also be an offence and the
same penalties specified above also apply.
For further information, see Overview of Relevant Laws and Regulations in Australia, the United
Kingdom, Japan and Malaysia Relevant Laws and Regulations in Australia Regulation of
Foreign Investment in Australia.
FH-REIT is exposed to the risks relating to the Australian taxation regime.
In Australia, a public unit trust (e.g. trusts beneficially owned by listed trusts) will be taxed as a
company where the trust does not engage in wholly eligible investment business at any time
during an income year. Furthermore, where the public unit trust also qualifies as a managed
investment trust (MIT), the public unit trust will lose its MIT status if it does not engage in wholly
eligible investment business at any time during an income year. This is an annual test. While
FH-REIT may seek professional advice to ensure that its relevant Australian unit trusts should only
engage in wholly eligible investment business, there is no assurance that the Australian Taxation
Office will not take a different view.
To qualify as an MIT and to enjoy preferential Australian withholding tax rates, there are several
conditions that must be met and among other requirements, no individual (who is not a resident
of Australia) can directly or indirectly hold, control or have the right to acquire an interest of 10.0%
or more in FH-REIT (and therefore, MIT Australia) at any time during the income year. As there are
no stipulated limits on how many Stapled Securities an investor may acquire, FH-REIT will monitor
investor percentage holdings to determine whether this requirement is met in respect of each year
in which MIT Australia wishes to qualify as an MIT. Where MIT Australia does not qualify for MIT
treatment, the distributions would be subject to Australian tax at 30.0% (where the unitholder is a
company) or 45.0% (where the unitholder is a trust). This will have an adverse impact on the
income of FHT which will in turn impact the income available for distribution to the Stapled
Securityholders.
RISKS RELATING TO THE UNITED KINGDOM
FH-REIT is exposed to general property risks in the United Kingdom.
FH-REIT, as the owner of the properties in the United Kingdom, is subject to risks generally
affecting interests and investments in real property in the United Kingdom, including: changes in
general political and economic conditions or in specific industry segments; declines in property
values; changes in valuation yields due to relative attractiveness of property as an asset class;
variations in supply of and demand for commercial, industrial, retail and other space (or
commercial, industrial, retail and other space of a particular type); obsolescence of properties;
declines in rental or occupancy rates; increases in interest rates; changes in rental terms
(including the tenants responsibility for operating expenses); fluctuations in the availability of
financing for the acquisition of properties; changes in governmental rules, regulations and fiscal
and other policies; war; terrorism (in particular, this risk is relevant to certain areas where FH-REIT
has a high concentration of assets, such as Central London) and acts of God (where not covered
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by insurance); changes to the United Kingdom taxation regime in relation to property, in particular,
but not limited to, stamp duty land tax; and other factors which are beyond the control of FH-REIT,
all of which may affect occupancy and/or valuation levels.
There can be no absolute assurance that the investigations of title would have identified all
the factors affecting title to the Properties in the United Kingdom.
There is a risk that there may be factors concerning the title to the Properties in the United
Kingdom which would, if known, affect their market value. In order to mitigate this risk, the
procedures described below have been undertaken.
The Properties in the United Kingdom have been the subject of a due diligence investigation
carried out in order to prepare reports or certificates of title in a form recognisable and
generally accepted within the legal profession to evidence and certify thorough title
investigations.
The certificates or reports of title address the quality of the title of such Properties on the
basis of a review of the title documents together with usual conveyancing searches and
enquiries detailed in the certificates or reports of title.
However, notwithstanding the above, there can be no absolute assurance that such procedures
will have identified all relevant factors relating to title. Adjoining owners may be planning
alterations not disclosed or revealed by searches and certain over-riding interests are protected
and will bind FH-REIT notwithstanding they are not disclosed on the registered title. This would
not lead to doubt as to ownership but could mean that the value of the interests owned was
reduced or that they were less attractive to potential customers. This could reduce the value of the
interest held by FH-REIT or the Variable Rent payable under the Master Lease and Tenancy
Agreements.
The United Kingdom has a system of registration of the ownership of title (both freehold and
leaseholds other than leaseholds for less than seven years) as well as certain other real
property-related rights, restrictions and covenants. It also provides for registration of security
taken over land interests. A registered title is therefore guaranteed. In the event that a person
suffers a loss because of a mistake or an omission from the register, they may be able to get
compensation.
Nevertheless, registration detail is not exhaustive and there are a limited number of rights or
restrictions which might not be revealed by title investigations which (by contract or otherwise)
may bind or benefit the property or its ownership and may impact upon its value or interfere with
its use. These are relatively limited and are generally of a nature that would be apparent on a
thorough inspection of the property (such as the rights of a short term tenant in occupation or
rights claimed by a person in occupation) and a confirmation has been obtained that no knowledge
of such interests exist. Nothing has been disclosed in the due diligence investigation that would
lead the Manager to believe such rights exist save the fact that it is known that there are numerous
short term occupiers of the serviced residences. Based on the due diligence investigations, the
Managers do not believe that such occupiers claim any rights other than their short term
occupancy.
In the unlikely event a right existed in favour of a person in occupation, this might restrict the use
of the property reducing its value or compromising the business carried on at the property. This
could reduce the value of the interest held by FH REIT or the Variable Rent payable under the
Master Lease and Tenancy Agreements.
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The laws of Scotland may change in future after the referendum in respect of Scottish
independence from the United Kingdom.
The Properties located in Scotland are principally subject to the laws and regulations of Scotland,
including those relating to health and safety, the environment and property generally. A
referendum in respect of Scottish independence from the United Kingdom is to be held on 18
September 2014. It is not clear what the effect of such independence (should it come to pass) will
have on the regulatory and tax environment applicable to property in Scotland (if any).
Accordingly, the current laws and regulations to which the Properties located in Scotland are
subject could change significantly in these circumstances which could potentially have an adverse
effect on these Properties.
In addition, with effect from 1 April 2015, Stamp Duty Land Tax will cease to apply to transactions
involving land in Scotland and will be replaced by the Land and Buildings Transaction Tax
(LBTT). LBTT is expected to be introduced regardless of the outcome of the referendum on
Scottish independence, and will apply wherever the purchaser is based, so long as the land is
located in Scotland. The rates of LBTT are currently unknown and the intention is that these will
be announced in September 2014 as part of the budget process. However, the structure is
expected to include a nil rate (0%) band and at least two other progressively increasing bands. If
the rates of tax are materially higher, this may have an adverse impact on values.
Therefore, there can be no assurance that changes in the relevant laws and regulations (if any)
and the LBTT payable in relation to the relevant Properties will not adversely affect the business
and operations of the relevant Properties, and consequently, the financial condition, results of
operations and prospects of FH-REIT.
RISKS RELATING TO JAPAN
The real property registration system in Japan may not accurately reflect the ownership of
the real property-related title or right.
Japan has a system of registering the ownership of real property (which includes land and
buildings) as well as certain other real property-related rights, such as security rights over real
property and easements, pursuant to which an unregistered owner of real property or an
unregistered holder of certain other rights cannot assert its title or such rights against a third party.
However, the real property register does not necessarily reflect the true owner of the real
property-related title or right. In practice, parties who plan to enter into a real property transaction
usually rely upon the register, as it is generally the best indication of the true owner of the real
property-related title or right. However, a party has no recourse to anyone but the seller if, relying
on the register, it purchases the property or a related right from a seller and the information
contained in the register turns out to be incorrect. The purchaser may claim for damages against
the seller pursuant to statutory warranties or contractual warranties, but, in general, cannot
acquire the ownership of or title to the real property. In this regard, the validity of the acquisition
of ANA Crowne Plaza by Kobe Excellence TMK could be challenged in cases where the relevant
real property register had not, at the time of said acquisition, properly reflected the true and
accurate ownership of ANA Crowne Plaza Kobe. Although based on the due diligence conducted,
the Managers have no reason to believe that Kobe Excellence TMK has imperfect title to ANA
Crowne Plaza Kobe, any imperfection in relation to the title to ANA Crowne Plaza Kobe could have
a material adverse effect on the business, financial condition, results of operations and prospects
of FH-REIT.
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Japan has experienced a number of major natural catastrophes over the years, most
notably earthquakes which, if they were to recur, may materially disrupt and adversely
affect the business and operations of ANA Crowne Plaza Kobe.
Japan has experienced a number of earthquakes over the years, most notably the recent massive
earthquake of 9.0 on the Richter scale which struck the eastern seaboard of Japan in March 2011.
The widespread devastation of this massive earthquake was aggravated by the resulting tsunami
and radioactive contamination from an affected nuclear plant. Similar natural catastrophes and
disasters such as earthquakes and tsunamis may adversely affect the operations of ANA Crowne
Plaza Kobe. These events may cause substantial structural and physical damage to ANA Crowne
Plaza Kobe, resulting in the incurrence of expenses in order to repair the damage caused.
Furthermore, such environmental conditions may result in a decreased demand for the services
provided by ANA Crowne Plaza Kobe. This will affect the market value of ANA Crowne Plaza Kobe
and may have an adverse effect on the results of operations of ANA Crowne Plaza Kobe. The
environmental conditions may also cause disruptions, affect investments and result in various
other adverse effects on the Japanese economy in general. This may lead to a decreased demand
for the services provided by ANA Crowne Plaza Kobe, and the market value and results of
operations of ANA Crowne Plaza Kobe may also be adversely and materially affected. This could
materially and adversely affect the business and financial conditions and the results of operations
of FH-REIT.
Kobe Excellence TMK may fail to satisfy the requirements for dividend distribution
deduction and consequently incur higher tax costs in Japan.
For a TMK to avail itself of the dividend distribution deduction tax treatment, there are several
requirements that must be complied with under the Special Taxation Measures Law of Japan. One
of the requirements for each fiscal year is that the TMK must distribute more than 90.0% of its
distributable profit (the TMK Distribution Requirement). The TMK Distribution Requirement is
based on the amount of profit of the TMK before taxation as calculated for accounting purposes,
with certain additional adjustments. Kobe Excellence TMK may bear excessive tax costs due to
the differences between tax and accounting treatments, in which case Kobe Excellence TMK may
not have sufficient distributable profit to declare the dividends necessary to satisfy the TMK
Distribution Requirement.
If Kobe Excellence TMK fails to meet the TMK Distribution Requirement or any of the other
requirements, it would not be able to deduct its dividend distributions from its taxable income as
deductible expenses. Instead, Kobe Excellence TMK would have to make dividend distributions
after its taxable income has been subject to Japanese corporate income tax at the regular rate.
This will reduce the amount of distributions that FHT can make to the Stapled Securityholders.
The Japanese tax authorities may also, from time to time, carry out tax audits to determine if the
relevant Japanese tax laws and regulations have been fully complied with. If the tax audit
determines that the dividend distribution deduction requirements are not fully satisfied, then
deductions claimed in prior periods may be reclassified as taxable income. In such a case, Kobe
Excellence TMKs tax burden would be increased for the fiscal periods in which Kobe Excellence
TMK recognises this additional taxable income. Consequently, the amount of profits distributable
by Kobe Excellence TMK could be reduced significantly, thereby adversely affecting the amount
of distributions that FHT can make to the Stapled Securityholders.
The success of Kobe Excellence TMK depends on the abilities of the Kobe Asset Manager,
Secured Capital Investment Management Co., Ltd. to operate ANA Crowne Plaza Kobe.
Kobe Excellence TMK depends on Secured Capital Investment Management Co., Ltd., the Kobe
Asset Manager, for the oversight of the day-to-day operations, and the administration and
management and the monitoring of property management, of ANA Crowne Plaza Kobe. Kobe
138
Excellence TMK also depends on third party property managers to run the day-to-day operations
of ANA Crowne Plaza Kobe. Any failure by the Kobe Asset Manager and the third party property
managers to properly manage the operations of ANA Crowne Plaza Kobe may adversely affect the
underlying value of and/or income from ANA Crowne Plaza Kobe.
Kobe Excellence TMKs dependence on third parties to conduct its business activities exposes it
to potential risks. These third parties may not provide adequate services or may not remain in
business. Further, if the asset management agreement with the Kobe Asset Manager is
terminated, Kobe Excellence TMK could face a substantial disruption to its operations and an
increase in costs incurred for the management of ANA Crowne Plaza Kobe. Kobe Excellence TMK
would also lose the benefit of the extensive expertise and experience of the Kobe Asset Manager
in managing and operating ANA Crowne Plaza Kobe.
The Kobe Asset Manager owes Kobe Excellence TMK fiduciary duties under the Asset
Management Agreement. However, potential conflicts of interest between the Kobe Asset
Manager and Kobe Excellence TMK could adversely affect Kobe Excellence TMK through the
Kobe Asset Managers performance. Moreover, the Kobe Asset Manager may be retained as asset
manager by other funds or entities. If the Kobe Asset Manager acts in its own interest or that of
a third party, to the detriment of Kobe Excellence TMK, the financial condition or results of
operations of Kobe Excellence TMK could be adversely materially affected.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to ANA Crowne Plaza Kobe for further details.)
Kobe Excellence TMK and the Kobe Asset Manager are subject to supervision by the
Japanese regulatory authorities.
Kobe Excellence TMK is subject to supervision by the Japanese regulatory authorities in particular
under the Asset Liquidation Act of Japan (Act No. 105 of 1998, as amended) (the Asset
Liquidation Act). The Kobe Asset Manager is also subject to supervision by the Japanese
regulatory authorities under various laws and regulations including the Financial Instruments and
Exchange Act of Japan (Act No. 25 of 1948, as amended). In the event of any administrative order
or other sanction being imposed on Kobe Excellence TMK or the Kobe Asset Manager as a result
of any inappropriate action taken with respect to the management of ANA Crowne Plaza Kobe, the
management of Kobe Excellence TMK and/or the Kobe Asset Manager could be adversely
affected, and there could be harm to the reputation of all of FH-REIT, Kobe Excellence TMK and
the Kobe Asset Manager, which could adversely affect the financial condition, business, results of
operations and prospects of FH-REIT.
ANA Crowne Plaza Kobe is subject to various environmental risks that may result in
unanticipated costs.
ANA Crowne Plaza Kobe is subject to various environmental laws, including those relating to soil
contamination, health and hygiene, air pollution control, water pollution control, waste disposal
and noise pollution control and storage of hazardous materials. For example, under the Soil
Contamination Countermeasures Act of Japan (Act No. 39 of 1970, as amended) (the Soil
Contamination Countermeasures Act) and related regulations, landowners in Japan are
responsible for removal or remedy of several hazardous substances. The costs of removal or
remediation of such substances could be substantial. These laws often impose liability without
regard to whether the owner or operator knew of, or was responsible for, the release or presence
of hazardous substances. It cannot be assured that potential environmental liabilities, which could
have a material adverse effect on FH-REITs results of operations, earnings and cash flows, do
not exist or will not arise in the future.
139
Decreases in security deposits may increase FH-REITs funding costs.
Consistent with industry practice in the real estate sector in Japan, the tenant leases of ANA
Crowne Plaza Kobe generally require the tenants to make security deposits (shiki-kin). These
security deposits are generally interest-free. Therefore, to the extent that Kobe Excellence TMK
decides to use such deposits, such deposits may effectively reduce the cost of capital of FH-REIT.
In such case, if the size of these deposits decreases, or if Kobe Excellence TMK needs to repay
them more quickly, Kobe Excellence TMK may be required to obtain funding at a higher effective
cost.
Kobe Excellence TMK owns ANA Crowne Plaza Kobe through a TBI and may suffer losses
as a trust beneficiary.
ANA Crowne Plaza Kobe is held through a TBI, in the form of a beneficiary interest in a Japanese
trust that holds ownership title to ANA Crowne Plaza Kobe. As such, Kobe Excellence TMK may
suffer certain trust-related liabilities and losses that would not arise if Kobe Excellence TMK had
direct ownership of ANA Crowne Plaza Kobe, including compensation of the trustee, property
defects or losses due to unauthorised disposition or collateralisation of a trust property by the
trustee or losses arising from breach of the trust agreement by the trustee. In addition, the relevant
trustees consent is generally required to transfer a beneficiary interest.
FH-REIT may lose its rights in a property in Japan if the purchase of the property is
recharacterised as a secured financing.
Depending on the underlying facts and circumstances surrounding the purchase of a Japanese
property, the purchase may not be construed as a true sale under Japanese law and may instead
be recharacterised as a secured financing. In such a case, the relevant Japanese property would
be deemed to be an asset of the seller, and FH-REIT would lose its ownership interest in the
Japanese Property. FH-REIT would instead hold only a security interest in the Japanese property.
Recharacterisation could occur when the seller becomes insolvent by way of bankruptcy,
corporate reorganization or civil rehabilitation proceedings. Under Japanese law, whether a
purchase may be recharacterised as a secured financing is determined through a consideration
of various factors, including, without limitation, the intention of the seller and purchaser, whether
the seller transferred the economic risk to the purchaser, and whether the seller and purchaser
contracted a buy-back arrangement permitting the seller to reacquire the property. Although
FH-REIT has no reason to believe that ANA Crowne Plaza Kobe or any of the Japanese properties
FH-REIT may acquire in Japan in the future would be recharacterised as a secured financing, any
such acquisition may be so recharacterised following a legal or regulatory proceeding.
RISKS RELATING TO MALAYSIA
The Westin Kuala Lumpur is held indirectly via an ABS structure.
FH-REIT does not directly own The Westin Kuala Lumpur and it only holds The Westin Kuala
Lumpur indirectly via an ABS structure. FH-REIT wholly owns a Singapore special purpose vehicle
(the Singapore SPV) which will in turn hold Class B Junior MTNs and Class C Junior MTNs (the
Junior MTNs) issued by the Malaysian SPV under the MTN Programme pursuant to an ABS
structure. The ordinary shares in the Malaysian SPV will be held by a trustee for the benefit of
charitable organisations. Consequently, FH-REIT may not directly exercise its rights as the land
owner in respect of The Westin Kuala Lumpur and may only exercise its rights vis--vis The
Westin Kuala Lumpur through the Singapore SPV, acting as a holder of the Junior MTNs of the
Malaysian SPV only.
140
In order to mitigate the risks arising from FH-REITs indirect ownership of the Property, it is a term
of the Junior MTNs that approval of the Singapore SPV as holder of the Junior MTNs would be
required in relation to the key operational issues set out in paragraph 6.5(b) of the Property Funds
Appendix, save that in the case of sub-paragraph (ix) (transfer or disposal of the assets), approval
will not be required in the occurrence of certain events of default under the terms of the Class A
Senior MTNs, in which case the holders of the Class A Senior MTNs may unilaterally dispose of
the assets of the Malaysian SPV. As a further mitigatory measure, the FH-REIT would be given a
call option to buy The Westin Kuala Lumpur and such property call option could be exercised prior
to the expected maturity of the Class A Senior MTNs or the occurrence of certain trigger events
or a declaration of an event of default under the terms of the MTN Programme.
(See Overview of the Acquisition of the Properties Acquisition of The Westin Kuala Lumpur and
Capitalisation and Indebtedness Indebtedness Asset-backed Securitisation of The Westin
Kuala Lumpur.)
The Malaysian Ringgit may be subject to exchange controls.
From 1998 to 2005, the Central Bank of Malaysia maintained a fixed exchange rate of MYR3.80
to US$1.00. In 2005, the Central Bank of Malaysia removed the peg and allowed the Malaysian
Ringgit to operate in a managed float, with the value of the currency being determined by various
economic factors. There can be no assurance that the Central Bank of Malaysia will, or would be
able to, intervene or maintain this managed float system in the future or that any such intervention
or managed float system would be effective. Further, there can be no assurance that the
Malaysian government will not impose more restrictive or other exchange controls. Any further
imposition, variation or removal of exchange controls may adversely affect the value of the
Stapled Securities or FH-REITs ability to repatriate the proceeds of any distributions out of
Malaysia.
Foreign investment in Malaysian properties may be subject to further controls.
Foreign investment in Malaysian properties is regulated and monitored by the Economic Planning
Unit of the Prime Ministers Department. Currently there is no restriction imposed on foreign
investment in REITs which have invested in Malaysian assets. However, there can be no
assurance that the Economic Planning Unit of the Prime Ministers Department and/or the
Malaysian government will not impose any restrictive or other controls relating to foreign
investment in Malaysian assets. Any imposition or variation of such controls may affect Stapled
Securityholders ability to sell the Stapled Securities to foreign parties and may affect the liquidity
of the Stapled Securities. Such conditions may also limit FH-REITs access to future foreign
sources of equity capital.
There is no assurance that Malaysian law, tax or administrative practice will not change or
that such change will not adversely impact the holding structure of The Westin Kuala
Lumpur or the operations of FHT.
The structure of the transaction and the tax treatment of the Malaysian SPV are based on
Malaysian law, tax and administrative practice in effect at the date hereof and having due regard
to the expected tax treatment of all relevant statutes under such law and practice. There can be
no assurance that Malaysian law, tax or administrative practice will not change after the date
hereof or that such change will not adversely impact the structure of the transaction, the holding
structure of The Westin Kuala Lumpur, the tax treatment of the Malaysian SPV and the operations
of FHT.
141
The Malaysian SPV is subject to the political, economic and social developments and
prevailing market conditions in the property sector in Malaysia.
Historically, the Malaysian property market has been cyclical and Malaysian property values have
been affected by, among other factors, supply of and demand for comparable properties, the rate
of economic growth in Malaysia, interest rates and inflation. An economic decline in Malaysia, a
decline in real estate market conditions in Malaysia or political, economic and social
developments outside the control of the Malaysian SPV, may have a material adverse effect on its
business, financial condition, results of operations and prospects. Other political and economic
uncertainties include but are not limited to the natural disasters, risks of war, terrorism, riots,
expropriation, nationalism, renegotiations or nullification of existing contracts, and changes in
interest rates, foreign exchange rates, methods of taxation and import duties and restrictions. Any
change in government policy, changes to senior positions within the government and parliament,
or any political instability in Malaysia or other countries that may arise from these changes may
have a material adverse effect on the Malaysian SPV.
142
USE OF PROCEEDS
ISSUE PROCEEDS
The Managers intend to raise gross proceeds of S$367.9 million from the Offering and the
issuance of the Cornerstone Stapled Securities, taking into account the amount attributable to the
Sponsor Initial Stapled Security, the FCL Consideration Stapled Securities and the TCC Stapled
Securities.
FHT will not receive any proceeds from the exercise of the Over-Allotment Option granted by the
Stapled Security Lender.
The REIT Manager also intends to draw down (a) an amount of S$612.7 million from the S$615.0
million term loan facilities from DBS Bank Ltd., The Hongkong and Shanghai Banking Limited,
Singapore Branch and Bank of China, (b) an amount of JPY2.35 billion (equivalent to
approximately S$28.9 million from the Kobe Excellence TMK Series 1 Bonds, (c) an amount of
MYR95.0 million (equivalent to approximately S$36.9 million) of senior MTNs and (d) an amount
of S$50.0 million from the short-term revolving credit facility from DBS Bank Ltd.) (the FH-REIT
Debt Facilities).
The total cash proceeds raised from the Offering, the issuance of the Cornerstone Stapled
Securities, the Security Deposits, as well as the amount drawn down from the FH-REIT Debt
Facilities will be used towards the following:
consideration for the purchase price of the Properties;
payment of the related acquisition costs of the Properties;
payment of issue and debt-related costs; and
working capital.
143
The following table, included for the purpose of illustration, sets out the intended sources and
applications of the total proceeds from the Offering, the Cornerstone Stapled Securities, the
Security Deposits, as well as the FH-REIT Debt Facilities and the amount attributable to the
Sponsor Initial Stapled Security, the FCL Consideration Stapled Securities and the TCC Stapled
Securities (the Total Issue Proceeds) based on the Offering Price assuming that the
Over-Allotment Option is fully exercised.
Amount Amount
As a dollar amount
for each S$ of the
Total Issue Proceeds
Source (S$000) Application (S$000)
Offering 194,299
Acquisition of
the Properties
1,691,878 0.94
FCL
Consideration
Stapled
Securities
230,893
TCC
Consideration
Stapled
Securities
419,321
Cornerstone
Stapled
Securities
205,000 Payment of
recoverable
VAT and GST
66,526 0.04
FH-REIT Debt
Facilities
728,553 Transaction
costs
(1)
35,481 0.02
Cash provided
from Security
Deposits
(2)
24,233 Working
capital
(3)
8,414 0.00
Total 1,802,299 Total 1,802,299 1.0
Notes:
(1) Transaction costs include expenses incurred in relation to the Offering and the FH-REIT Debt Facilities, where
appropriate.
(2) Refers to the security deposits paid by the Master Lessees (save in respect of ANA Crowne Plaza Kobe and The
Westin Kuala Lumpur). Security deposits collected in cash as part of the FHT groups cash flow management are
not maintained in a separate bank account but treated as part of the cash available to the FHT group. The
FHT groups cash is used for numerous purposes including working capital and acquisition of assets.
(3) S$10,000 will go to FH-BT as its initial working capital.
As at the Listing Date, FH-REIT will have working capital of at least S$8.4 million. The REIT
Manager believes that this working capital balance will be sufficient for FH-REITs working capital
requirements over the next 12 months following the Listing Date.
144
ISSUE EXPENSES
The Managers estimate that expenses payable in connection with the Offering and the issuance
of the Sponsor Stapled Securities, the TCC Stapled Securities and the Cornerstone Stapled
Securities and the application for listing, including the Underwriting, Selling and Management
Commission, professional fees and all other incidental expenses relating to the Offering and the
issuance of the Sponsor Stapled Securities, the TCC Stapled Securities and the Cornerstone
Stapled Securities will be approximately S$28.4 million based on the Offering Price.
A breakdown of these estimated expenses is as follows:
(S$000)
As a dollar
amount for
each S$ of
the Total
Issue
Proceeds
Underwriting, Selling and Management Commission
(1)
8,535 0.0047
Professional and other fees
(2)
17,200 0.0095
Miscellaneous Offering expenses
(3)
2,633 0.0015
Total Estimated Expenses of the Offering
(4)
28,368 0.0157
Notes:
(1) Such commission represents a maximum of 2.0% of the total amount of the Offering. The amount of total
commission payable by the Managers will be pegged to the Offering Price. A commission will be payable in respect
of the TCC Stapled Securities only to the extent they are subject to the exercise of the Over-allotment Option.
(2) Includes financial advisory fees, solicitors fees and fees for the Independent Reporting Auditor, KPMG Services Pte.
Ltd. as the independent tax adviser (the Independent Tax Adviser), the Independent Valuers, the Independent
Market Research Consultant and other professionals fees.
(3) Includes cost of prospectus production, roadshow expenses and certain other expenses incurred or to be incurred
in connection with the Offering and the issuance of the Sponsor Stapled Securities and Cornerstone Stapled
Securities.
(4) The total expenses in relation to the Offering will be ultimately borne by the investors subscribing for the Stapled
Securities pursuant to the Offering.
The Managers will make periodic announcements on the utilisation of the net proceeds from the
Offering and the Cornerstone Stapled Securities via SGXNET as and when such funds are
materially utilised. The actual use of such proceeds will be disclosed in the annual report of FHT.
LIQUIDITY
As at the Listing Date, FHT will have a cash balance of approximately S$15.1 million. The
Managers believe that this cash balance, in addition to the expected cash flow from operations
and the S$50 million revolving credit facility will be sufficient for FHTs working capital
requirements over the next 12 months following the Listing Date.
As at the Listing Date, FH-BT will be dormant and will only require minimal working capital.
145
OWNERSHIP OF THE STAPLED SECURITIES
EXISTING STAPLED SECURITIES
On 12 June 2014, one FH-REIT Unit was issued to the Sponsor Entity and on 20 June 2014, one
FH-BT Unit was issued to the Sponsor Entity. The issue price of each FH-REIT Unit and each
FH-BT Unit was S$1.00. No other FH-REIT Units or FH-BT Units have been issued. On 20 June
2014, the REIT Manager, the REIT Trustee and the Trustee-Manager entered into the Stapling
Deed. The FH-REIT Unit and the FH-BT Unit are stapled to each other and constitute the Sponsor
Initial Stapled Security.
STAPLED SECURITIES TO BE ISSUED TO THE SPONSOR
On the Listing Date, separate from the Offering, 262,377,999 Stapled Securities (representing
22.0% of the total number of Stapled Securities in issue on the Listing Date) will be issued to the
Sponsor Entity, a wholly-owned subsidiary of the Sponsor, as the vendor of Fraser Suites
Singapore, as part of the purchase consideration payable for the sale of Fraser Suites Singapore
to FH-REIT.
STAPLED SECURITIES TO BE ISSUED TO TCC HOSPITALITY
On the Listing Date, separate from the Offering, 512,238,000 Stapled Securities (representing
43.0% of the total number of Stapled Securities in issue on the Listing Date) will be issued to TCC
Hospitality, being the part of the purchase consideration payable for the sale of Hotels to FH-REIT.
PRINCIPAL STAPLED SECURITYHOLDERS AND THEIR HOLDINGS
The total number of Stapled Securities in issue immediately after the completion of the Offering
will be 1,192,628,000 Stapled Securities.
146
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148
LOCK-UPS
The Sponsor, FCL Investments Pte. Ltd., TCC Hospitality, DBS Bank Ltd. and each of the
shareholders of TCC Hospitality (being Atinant Bijananda, Thapana Sirivadhanabhakdi, Wallapa
Traisorat, Thapanee Techajareonvikul and Panote Sirivadhanabhakdi) have each agreed to a
lock-up arrangement during the Lock-up Period in respect of its effective interest in the relevant
Lock-up Stapled Securities held by it on the Listing Date, subject to certain exceptions.
The Managers have also undertaken not to offer, issue or contract to issue any Stapled Securities,
and the making of any announcements in connection with any of the foregoing transactions,
during the Lock-up Period, subject to certain exceptions.
(See Plan of Distribution Lock-up Arrangements for further details.)
SUBSCRIPTION BY THE CORNERSTONE INVESTORS
In addition, concurrently with, but separate from the Offering, each of the Cornerstone Investors
has entered into a subscription agreement to subscribe for an aggregate of 232,949,000 Stapled
Securities at the Offering Price conditional upon the Underwriting Agreement having been entered
into, and not having been terminated, pursuant to its terms on or prior to the Settlement Date.
Information on the Cornerstone Investors
DBS Bank Ltd.
DBS is a leading financial services group in Asia, with over 250 branches across 17 markets. The
banks capital position, as well as AA- and Aa1 credit ratings, is among the highest in
Asia-Pacific. DBS has been recognised as Asias Best Bank by The Banker, a member of the
Financial Times group, and Best Managed Bank in Asia-Pacific by The Asian Banker. The bank
has also been named Safest Bank in Asia by Global Finance for five consecutive years from
2009 to 2013.
The bank has entered into the cornerstone subscription agreement to subscribe for the Stapled
Securities.
DBS Bank Ltd. (on behalf of certain private banking customers)
As at 31 May 2014, the private banking business of DBS has total assets under management of
circa USD26.9 billion. DBS is a leading financial services group in Asia, with over 250 branches
across 17 markets. The banks capital position, as well as AA- and Aa1 credit ratings, is among
the highest in Asia-Pacific. DBS has been recognised as Asias Best Bank by The Banker, a
member of the Financial Times group, and Best Managed Bank in Asia-Pacific by The Asian
Banker. The bank has also been named Safest Bank in Asia by Global Finance for five
consecutive years from 2009 to 2013.
The bank has entered into the cornerstone subscription agreement, on behalf of certain of its
private banking customers, to subscribe for the Stapled Securities. The Stapled Securities will be
held in custody by DBS Nominees (Pte) Ltd, on behalf of such customers. DBS Nominees (Pte)
Ltd acts as a custodian for these stapled securities and does not have a beneficial interest in the
Stapled Securities allotted under the cornerstone subscription agreement.
149
Fortress Capital Asset Management (M) Sdn Bhd
Fortress Capital Asset Management (M) Sdn Bhd (FCAM) is an established, independent asset
management and private investment group that was formed in 2003. FCAM is a licensed fund
manager under the Capital Markets and Services Act 2007 of Malaysia. FCAM manages
investment portfolios for institutional investors and the high net worth segment, providing its
clients with independent access to public and private equity opportunities across the Asia-Pacific
region.
Meren Pte Ltd
Meren Pte Ltd is a wholly-owned subsidiary of Metro Holdings Ltd, an SGX-listed company. The
Metro groups core businesses are in property development and investment, and retail. The
groups key markets are the Peoples Republic of China, Indonesia and Singapore.
Mr Gordon Tang & Family
Mr Gordon Tang is a Non-Executive Director of SGX-Catalist listed SingHaiyi Group Limited,
which specialises in property development, real estate investment, real estate co-investing,
property trading and real estate management services. Mr Gordon Tang, Mr Tang Qingquan and
Mdm Yang Chanzhen have entered into the cornerstone subscription agreements to subscribe for
Stapled Securities. Mr Tang Qingquan and Mdm Yang Chanzhen are the parents of Mr Gordon
Tang.
Wealthy Fountain Holdings Inc
Wealthy Fountain Holdings Inc is a BVI-incorporated investment holding company which is
wholly-owned by Mr Tong Jinquan, the founder of the Summit Group. Mr Tong also wholly-owns
Shanghai Summit Pte. Ltd.. Mr Tong has over 20 years of experience in property investment,
property development and property management and he founded the Summit Group in 1994. The
Summit Groups areas of business encompass industrial investment, investment management,
trading, property development, hotel management, property management, business consultancy,
convention and exhibition services, goods export and technology import, software services and
maintenance of office equipment. The total assets of the Summit Group as at 31 December 2012
amounted to RMB22.15 billion.
SUBSCRIPTION FOR RESERVED STAPLED SECURITIES
8,597,000 Stapled Securities have been reserved under the Placement Tranche for subscription
by the directors, management, employees and business associates of the Sponsor and the REIT
Manager and persons who have contributed to the success of FHT.
(See Plan of Distribution for further details.)
SUBSCRIPTION BY THE REIT MANAGER DIRECTORS AND THE TRUSTEE-MANAGER
DIRECTORS
The directors of the REIT Manager (the REIT Manager Directors) and the directors of the
Trustee-Manager (the Trustee-Manager Directors) may subscribe for the Stapled Securities
under the Public Offer and/or the Placement Tranche. Save for the REIT Managers and the
Trustee-Managers respective internal policies, which prohibit the REIT Manager Directors and
the Trustee-Manager Directors from dealing in the Stapled Securities at certain times, there are
no restrictions on the REIT Managers Directors or the Trustee-Managers Directors disposing of
or transferring all or any part of their holdings.
150
(See Management and Corporate Governance FH-REIT Dealings in Stapled Securities or, as
the case may be, FH-REIT Units and Management and Corporate Governance FH-BT
Dealings in Stapled Securities or FH-BT Units for further details.)
SUBSCRIPTION FOR MORE THAN 5.0% OF THE STAPLED SECURITIES
To the Managers knowledge, as at the Latest Practicable Date, other than the Sponsor and TCC
Hospitality Limited, no person intends to subscribe for more than 5.0% of the Stapled Securities
in the Offering. If any person were to make an application for the Stapled Securities amounting to
more than 5.0% of the Stapled Securities in the Offering and were subsequently allotted or
allocated such number of Stapled Securities, the Managers will make the necessary
announcements at an appropriate time. The final allocation of the Stapled Securities will be in
accordance with the unitholding spread and distribution guidelines as set out in Rule 210 of the
Listing Manual.
OPTIONS ON STAPLED SECURITIES
No option to subscribe for the Stapled Securities has been granted to any of the Directors or to
the Chief Executive Officer or any other key executive officers of the Managers.
151
DISTRIBUTIONS
It should be noted that the total distributions available to Stapled Securityholders is an aggregate
of the distributions from FH-REIT and FH-BT, and is thus dependent on the financial performance
of FH-REIT and FH-BT respectively, instead of the consolidated financial performance of FH-REIT
and FH-BT.
DISTRIBUTION POLICY OF FH-REIT
One of the primary objectives of FHT is to provide Stapled Securityholders with regular, stable and
growing distributions on a semi-annual basis. FH-REITs distribution policy is to distribute 100.0%
of FH-REITs Distributable Income for the Forecast Period 2014 and Projection Year 2015 and at
least 90.0% of its Distributable Income (which should include at least 90.0% of Specified Taxable
Income) thereafter, comprising substantially income from the letting of the Properties and related
property services income after deduction of allowable expenses and allowances. The actual level
of distribution is to be determined at the REIT Managers discretion. Distributions, when paid, will
be in Singapore dollars.
For these purposes, and under the terms of the Trust Deed, the Distributable Income for a
financial year is the amount calculated by the Manager (based on the audited financial statements
of FH-REIT for that financial year) as representing the consolidated audited net profit after tax of
FH-REIT and its SPVs for the financial year, as adjusted to eliminate the effects of Adjustments
(as defined below). After eliminating the effects of these Adjustments, the Distributable Income
may be different from the net profit recorded for the relevant financial year.
Adjustments means adjustments which are charged or credited to the consolidated audited
profit and loss account of FH-REIT for the relevant financial year or the relevant distribution period
(as the case may be), including (i) unrealised income, including property revaluation gains, and
reversals of impairment provisions, (ii) deferred tax charges/credits (in respect of building capital
allowance and accelerated tax depreciation), (iii) negative goodwill, (iv) differences between cash
and accounting finance costs, (v) realised gains on the disposal of properties and
disposal/settlement of financial instruments, (vi) the portion of the Management Fee and the
property management fee (where applicable) that is paid or payable in the form of Units, (vii) costs
of any public or other offering of Units or Convertible Instruments that are expensed but are
funded by proceeds from the issuance of such Units or Convertible Instruments, (viii) depreciation
and amortisation in respect of the Properties and their ancillary machines, equipment and other
fixed assets, (ix) adjustment for amortisation of rental incentives, and (x) other non-cash gains and
losses (as deemed appropriate by the Manager).
After FHT has been admitted to the Main Board of the SGX-ST, FH-REIT will make distributions
to Stapled Securityholders on a semi-annual basis, with the amount calculated as at 31 March,
and 30 September each year for the six-month period ending on each of the said dates. FH-REITs
first distribution after the Listing Date will be for the period from the Listing Date to 31 March 2015
and will be paid by the REIT Manager on or before 29 June 2015. Subsequent distributions will
take place on a semi-annual basis as well. Under the FH-REIT Trust Deed, the REIT Manager is
required to pay distributions within 90 days after the end of each distribution period.
While the investment strategy of FH-REIT is to hold its investments for the long-term, in the event
that there are gains arising from sales of real properties, and only if such gains are surplus to the
business requirements and needs of FH-REIT and its taxability or otherwise confirmed by the
IRAS, the REIT Manager may, at its discretion, direct the REIT Trustee to distribute such gains.
Such gains, if not distributed, will form part of the FH-REIT Deposited Property.
152
FH-REITs primary source of liquidity to fund distributions, servicing of debt, payment of property
expenses and capital expenditure will be from the receipts from operations and borrowings, where
appropriate.
FH-REITs ability to make distributions will be subject to its available cash flow. Where the cash
flow generated from operations is not sufficient to meet the distributions of FH-REIT, FH-REIT may
incur borrowings for the purpose of funding such distributions. FH-REITs ability to borrow is,
however, limited by the Property Funds Appendix. On the other hand, the actual proportion of
Taxable Income distributed to Stapled Securityholders beyond Projection Year 2015 may be
greater than 90.0% if the REIT Manager believes it to be appropriate, having regard to FH-REITs
funding requirements, other capital management considerations and the overall stability of
distributions.
Under the Property Funds Appendix, if the REIT Manager declares a distribution that is in excess
of profits, the REIT Manager should certify, in consultation with the REIT Trustee, that it is satisfied
on reasonable grounds that, immediately after making the distribution, FH-REIT will be able to
fulfil, from the FH-REIT Deposited Property, the liabilities of FH-REIT as they fall due. The
certification by the REIT Manager should include a description of the distribution policy and the
measures and assumptions for deriving the amount available to be distributed from the FH-REIT
Deposited Property. The certification should be made at the time the distribution is declared.
DISTRIBUTION POLICY OF FH-BT
As at the Listing Date, FH-BT will be dormant.
In the event that FH-BT becomes active and profitable, FH-BTs distribution policy will be to
distribute as much of its income as practicable, and the determination to distribute and the
quantum of distributions to be made by FH-BT will be determined by the Trustee-Manager Board
at its sole discretion.
153
EXCHANGE RATE INFORMATION AND EXCHANGE CONTROLS
EXCHANGE RATE INFORMATION
The following tables set forth, for the period from 2010 to the Latest Practicable Date, information
concerning the exchange rates between:
Australian dollars and Singapore dollars (in Australian dollars per Singapore dollar);
Pound Sterling and Singapore dollars (in Pound Sterling per Singapore dollar);
Japanese Yen and Singapore dollars (in Japanese Yen per Singapore dollar); and
Malaysian Ringgit and Singapore dollars (in Malaysian Ringgit per Singapore dollar).
The exchange rates were based on the average between the bid and offer rates of the currency
as obtained from Bloomberg L.P.
(1)
No representation is made that the respective foreign currency
amounts actually represent such Singapore dollar amounts or could have been or could be
converted into Singapore dollars at the rates indicated, at any other rate, or at all. The exchange
rates set out below are historical rates for illustrative purposes only and no representation is made
regarding any trends in exchange rates.
Australian dollar/Singapore dollar
(1)
Period ended Average High Low
2010 0.7989 0.8704 0.7603
2011 0.7708 0.8050 0.7446
2012 0.7732 0.8031 0.7375
2013 0.8282 0.8946 0.7661
December 2013 0.8847 0.8946 0.8738
January 2014 0.8873 0.9009 0.8733
February 2014 0.8803 0.8955 0.8731
March 2014 0.8687 0.8805 0.8543
April 2014 0.8556 0.8603 0.8480
May 2014 0.8589 0.8665 0.8530
June 2014
(2)
0.8575 0.8604 0.8542
Notes:
(1) Source: Bloomberg L.P. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the SFA
(read with Section 302(1) of the SFA) and for the purposes of Section 282I of the SFA, to the inclusion of the
information extracted from the relevant report published by it and therefore is not liable for such information under
Sections 253 and 254 of the SFA (both read with Section 302(1) of the SFA) and Sections 282N and 282O of the
SFA. While the Managers have taken reasonable actions to ensure that the information from the relevant report
published by Bloomberg L.P. is reproduced in its proper form and context, and that the information is extracted
accurately and fairly from such report, none of the Managers, the Global Coordinator, the Joint Bookrunners or any
other party has conducted an independent review of the information contained in such report or verified the accuracy
of the contents of the relevant information.
(2) As at the Latest Practicable Date.
154
Pound Sterling/Singapore dollar
(1)
Period ended Average High Low
2010 0.4754 0.5032 0.4381
2011 0.4962 0.5179 0.4826
2012 0.5051 0.5164 0.4938
2013 0.5112 0.5383 0.4781
December 2013 0.4848 0.4895 0.4781
January 2014 0.4770 0.4825 0.4701
February 2014 0.4769 0.4836 0.4711
March 2014 0.4748 0.4775 0.4708
April 2014 0.4759 0.4793 0.4722
May 2014 0.4744 0.4770 0.4721
June 2014
(2)
0.4753 0.4763 0.4744
Notes:
(1) Source: Bloomberg L.P. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the SFA
(read with Section 302(1) of the SFA) and for the purposes of Section 282I of the SFA, to the inclusion of the
information extracted from the relevant report published by it and therefore is not liable for such information under
Sections 253 and 254 of the SFA (both read with Section 302(1) of the SFA) and Sections 282N and 282O of the
SFA. While the Managers have taken reasonable actions to ensure that the information from the relevant report
published by Bloomberg L.P. is reproduced in its proper form and context, and that the information is extracted
accurately and fairly from such report, none of the Managers, the Global Coordinator, the Joint Bookrunners or any
other party has conducted an independent review of the information contained in such report or verified the accuracy
of the contents of the relevant information.
(2) As at the Latest Practicable Date.
Japanese Yen/Singapore dollar
(1)
Period ended Average High Low
2010 64.36 68.97 61.61
2011 63.43 67.85 58.08
2012 63.93 71.03 59.28
2013 78.02 83.36 70.81
December 2013 82.27 83.36 81.22
January 2014 81.62 83.34 79.93
February 2014 80.67 81.17 79.15
March 2014 80.76 82.08 79.82
April 2014 81.65 82.25 81.00
May 2014 81.33 81.67 80.84
June 2014
(2)
81.71 82.00 81.47
Notes:
(1) Source: Bloomberg L.P. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the SFA
(read with Section 302(1) of the SFA) and for the purposes of Section 282I of the SFA, to the inclusion of the
information extracted from the relevant report published by it and therefore is not liable for such information under
Sections 253 and 254 of the SFA (both read with Section 302(1) of the SFA) and Sections 282N and 282O of the
SFA. While the Managers have taken reasonable actions to ensure that the information from the relevant report
published by Bloomberg L.P. is reproduced in its proper form and context, and that the information is extracted
accurately and fairly from such report, none of the Managers, the Global Coordinator, the Joint Bookrunners or any
other party has conducted an independent review of the information contained in such report or verified the accuracy
of the contents of the relevant information.
(2) As at the Latest Practicable Date.
155
Malaysian Ringgit/Singapore dollar
(1)
Period ended Average High Low
2010 2.3625 2.4403 2.2952
2011 2.4333 2.5059 2.3703
2012 2.4718 2.5264 2.3973
2013 2.5175 2.6027 2.3973
December 2013 2.5825 2.6009 2.5594
January 2014 2.5961 2.6233 2.5748
February 2014 2.6122 2.6297 2.5869
March 2014 2.5901 2.6049 2.5772
April 2014 2.5937 2.6016 2.5826
May 2014 2.5804 2.6068 2.5606
June 2014
(2)
2.5677 2.5756 2.5570
Notes:
(1) Source: Bloomberg L.P. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the SFA
(read with Section 302(1) of the SFA) and for the purposes of Section 282I of the SFA, to the inclusion of the
information extracted from the relevant report published by it and therefore is not liable for such information under
Sections 253 and 254 of the SFA (both read with Section 302(1) of the SFA) and Sections 282N and 282O of the
SFA. While the Managers have taken reasonable actions to ensure that the information from the relevant report
published by Bloomberg L.P. is reproduced in its proper form and context, and that the information is extracted
accurately and fairly from such report, none of the Managers, the Global Coordinator, the Joint Bookrunners or any
other party has conducted an independent review of the information contained in such report or verified the accuracy
of the contents of the relevant information.
(2) As at the Latest Practicable Date.
EXCHANGE CONTROLS
Australia
There are no foreign exchange controls in Australia that restrict the payment of cash dividends or
capital amounts by MIT Australia to FH-REIT. However, where AUD10,000 of physical currency is
transferred out of Australia or international funds transfer instructions occur, reporting obligations
may apply under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
There are also prohibitions on the transfer of money to and dealing with property in connection
with certain persons under the Charter of the United Nations Act 1945 (Cth) and the Autonomous
Sanctions Act 2011 (Cth) which may affect dealings in Australia.
United Kingdom
There are currently no foreign exchange controls in the United Kingdom that may restrict the
payments of amounts to FH-REIT.
Jersey
There are currently no foreign exchange controls in Jersey that may restrict the payments of
amounts to FH-REIT.
156
Japan
The Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended) (the
Foreign Exchange and Foreign Trade Act) and the cabinet ordinances and ministerial
ordinances promulgated thereunder (the Foreign Exchange Regulations) govern certain
aspects of foreign exchange, foreign trade and other foreign transactions. The Foreign Exchange
Regulations generally do not require governmental authorisation to engage in foreign exchange,
foreign trade or other foreign transactions, except in limited circumstances. In many cases, the
Foreign Exchange Regulations simply require post transaction notification with respect to certain
foreign exchange, foreign trade or other foreign transactions, including overseas payments in
excess of a specified amount and acquisition of equity securities of Japanese corporations by
foreign investors (which include corporations organised under the laws of foreign countries or
whose principal offices are located outside Japan). Such notification is likely to be required in the
acquisition by a non-Japanese corporation of specified or preferred shares in a TMK or shares in
a godo kaisha (GK).
Malaysia
There are foreign exchange policies in Malaysia which support the monitoring of capital flows in
and out of Malaysia in order to preserve its financial and economic stability. The foreign exchange
policies monitor and regulate both residents and non-residents. Under the current Exchange
Control Notices of Malaysia and the Foreign Exchange Administration Rules issued by the Central
Bank of Malaysia, non-residents are free to repatriate any amount of funds from Malaysia,
including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from
investment in Malaysia, subject to applicable reporting requirements and any withholding tax,
provided that the repatriation is made in foreign currency.
157
CAPITALISATION AND INDEBTEDNESS
The following table sets forth the pro forma capitalisation of FH-REIT as at the Listing Date and
after application of the total proceeds from the Offering and the issuance of the Sponsor Stapled
Securities, the TCC Stapled Securities and Cornerstone Stapled Securities, based on the Offering
Price, and the expected drawdowns under the FH-REIT Debt Facilities. The information in the
table below should be read in conjunction with Use of Proceeds.
CAPITALISATION
(1)
FH-REIT
As at the Listing Date
(S$000)
Total debt 728,553
FH-REIT Units in issue 1,049,513
Total Capitalisation 1,778,066
Note:
(1) No capitalisation is presented for FH-BT as it is dormant as at the Listing Date.
INDEBTEDNESS
FH-REIT
FH-REIT Debt Facilities
FH-REIT will put in place the FH-REIT Debt Facilities, being (i) up to S$615 million of Term Loan
Facilities (the TLF) from DBS Bank Ltd., The Hongkong and Shanghai Banking Limited,
Singapore Branch and Bank of China (together, the Lenders) to the REIT Trustee as borrower,
(ii) the JPY2.35 billion Kobe Excellence TMK series 1 Bonds, (iii) the MYR95 million senior MTNs,
(iv) a revolving credit facility of up to MYR4 million and (v) a revolving credit facility of S$50 million.
The TLF comprises the following SGD tranches:
(i) Tranche A up to S$115 million; and
(ii) Tranche B up to S$500 million.
The FH-REIT Debt Facilities have staggered loan maturities of three-year and five-year terms as
detailed below and will be drawn down in full on the Listing Date:
Tranche A: Three years from the date of first drawdown under the TLF; and
Tranche B: Five years from the date of first drawdown under the TLF.
The FH-REIT Debt Facilities agreement contains covenants which are typical for financing of such
nature. The material covenants require, inter alia, that:
(1) The Consolidated Unitholders funds shall not be less than S$800 million on the last day of
each period;
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(2) Minimum consolidated Interest Coverage Ratio of 1.5 times; and
(3) Maximum Gearing Ratio of (i) 35% (without rating by an acceptable rating agency) or (ii) 60%
(with rating by an acceptable rating agency).
The financial covenants will be tested on a consolidated basis by reference to the unaudited
quarterly and audited annual financial statements of the borrower.
Consolidated Net Income means, in relation to any period, the amount identified in the most
recent financial statements of FH-REIT and its subsidiaries (the Group) as the total return
(taking into account all realised foreign exchange loss or gain and all realised loss or gain arising
in respect of any derivative financial instruments) of the Group during that period but before net
changes in unrealised foreign exchange loss or gain, fair value of investment properties, fair value
of other investments and derivative financial instruments, income tax and distribution and share
of results of associates for that period.
Gearing Ratio means the ratio of consolidated total financial indebtedness plus deferred
payments to consolidated total assets of the Group.
Interest Coverage Ratio means the ratio of (a) the Net Cash Available for Interest Servicing to
(b) the aggregate amount of interest and any other finance charges (whether or not paid or
payable) accrued by the Group excluding the amortisation of borrowing costs in respect of any
front end fees paid under any loan facilities (Interest Expenses) by the Group.
Net Cash Available for Interest Servicing means, in relation to any period, the Consolidated
Net Income of the Group for that period after including/adding back:
(a) the Consolidated Total Interest Expenses for that period;
(b) the amortisation of front end fees actually paid; and
(c) all management (including property management) fees paid or to be paid via the issue of
additional units in the borrower for that period.
In addition, other customary covenants include but are not limited to the following:
(1) The manager of FH-REIT shall remain majority owned
1
(directly or indirectly) by the Sponsor
unless with the prior written consent of all the Lenders. The manager of the FH-REIT is not
to resign or be removed as manager of FH-REIT without a replacement or substitute
manager which is approved by the Monetary Authority of Singapore unless with the prior
written consent of all the Lenders.
(2) FH-REIT shall remain listed on the SGX-ST.
(3) The operator of the hospitality or serviced residences properties shall be the Sponsor, its
Subsidiaries, FH-BT, any member of the TCC Group or (as the case may be) any hotel or
serviced residences operator appointed by the Sponsor or its subsidiaries.
(4) There shall not be a material amendment or termination of any Master Lease Agreement
signed between FH-REIT and the Sponsor (or its subsidiaries), unless in connection with
such termination, a replacement Master Lease Agreement is entered into with the Sponsor
or another subsidiary of the Sponsor.
1
The Sponsor has undertaken to notify the REIT Manager and the REIT Trustee as soon as it becomes aware of any
pledging arrangements relating to its shares in the REIT Manager, and of any event which may result in a breach
of the loan provisions or financial covenants in accordance with Rule 728 of the Listing Manual.
159
(5) The borrower shall take out and maintain such insurances in respect of FH-REITs properties
as a prudent company located in the same or similar location and carrying on the same or
similar business would effect.
(6) Subject to exceptions, the borrower shall not and shall ensure that none of its relevant
subsidiaries will create or permit to arise or subsist any mortgage, charge, pledge, lien or
other security interest securing any obligation of any person or any other agreement or
arrangement having a similar effect over any of its properties or the share capital of any of
its relevant subsidiaries.
(7) Subject to exceptions, the borrower shall not and shall ensure that none of its relevant
subsidiaries will enter into a single transaction or a series of transactions (whether related or
not and whether voluntary or involuntary) to sell, lease, transfer or otherwise dispose of any
of its properties or the share capital of any of its relevant subsidiaries.
(8) The REIT Trustee is not to resign or be removed as the trustee of FH-REIT without a
replacement or substitute trustee which is a reputable trust company approved by the
Monetary Authority of Singapore to act as a trustee of collective investment schemes in
Singapore having been appointed in accordance with the terms of the FH-REIT Trust Deed.
(9) The borrower is to submit a certificate on a quarterly basis as regards compliance with the
financial covenants issued by a director, chief financial officer or authorised signatory at the
same time as submission of the relevant financial statements.
(10) The borrower (in its capacity as trustee for FH-REIT) shall represent that it has the right
under the FH-REIT Trust Deed to be indemnified out of the assets of FH-REIT for all payment
obligations (actual and contingent) incurred under or in connection to the finance documents.
(11) There shall be no amendment to any material term of the FH-REIT Trust Deed without the
prior written consent of the Majority Lenders (such consent not to be unreasonably withheld)
(unless required by law or requested to do so by a relevant governmental agency).
FH-REIT will put in place a short-term S$50.0 million short term revolving credit facility (RCF)
from DBS Bank Ltd..
Asset-backed Securitisation of The Westin Kuala Lumpur
The MTN Programme pursuant to the asset-backed securitisation of The Westin Kuala Lumpur
(the ABS Transaction) will be implemented, for the purpose of, inter alia, funding the acquisition
by the Malaysian SPV from the Originator of The Westin Kuala Lumpur.
The issue size of the MTN Programme is up to MYR750,000,000 in nominal value and the MTN
Programme shall comprise Class A Senior MTNs, Class B Junior MTNs and Class C Junior MTNs.
The Class A Senior MTNs will be issued by direct placement on a best effort basis or bought deal
basis or book running on a best effort basis without prospectus. The Class A Senior MTNs will be
placed to institutional investors in Malaysia, and in any case, will be underwritten by Standard
Chartered Bank, subject to meeting certain customary conditions precedent. The Class B Junior
MTNs and Class C Junior MTNs will be issued by way of private placement without prospectus.
FH-REIT will subscribe for the Class B Junior MTNs and Class C Junior MTNs through Singapore
SPV, which is wholly-owned by the REIT Trustee.
160
The MTN Programme shall have a tenure of 20 years from the date of first issuance (expected to
be on Listing Date). All MTNs to be issued under the MTN Programme shall have an Expected
Maturity Date (that is, the date specified for the expected redemption of the outstanding face
amount of the MTN in issue) and a Legal Maturity Date (that is, the date specified for the
redemption of the outstanding face amount of the MTN in issue).
For the first issuance of Class A Senior MTNs, Class B Junior MTNs and Class C Junior MTNs,
the Expected Maturity Date shall be five years and the Legal Maturity Date shall be 6.5 years.
Non-redemption of the MTNs on the Expected Maturity Date will not in itself constitute an event
of default under the MTN Programme (Event of Default), but a Trigger Event (see Events of
Default and Trigger Events below) is deemed to have occurred. The non-redemption of the
MTNs on the Legal Maturity Date shall be an Event of Default.
The actual issue size for the first issuance of the MTNs is set out below:
(MYR million)
Class A Senior MTNs: 95.0
Class B Junior MTNs: 95.0
Class C Junior MTNs: 266.5
TOTAL 456.5
For subsequent issuances of MTNs by the Malaysian SPVs, the issue size of the MTNs will be
determined at the point of issuance, subject to the total MTNs outstanding being no more than
MYR750,000,000.
Subsequent issuances of MTNs may be made to (i) finance any capital expenditure on The Westin
Kuala Lumpur and/or for working capital purposes including payment to the debt service reserve
account for compliance with the DSRA Requirement (as defined below) and (ii) refinance any
MTNs on its respective Expected Maturity Date.
Coupon on the MTNs
The coupon on the Class A Senior MTNs shall be based on a fixed rate to be determined prior to
each issuance. A step-up coupon rate shall apply to all the outstanding Class A Senior MTNs for
the period from Expected Maturity Date to Legal Maturity Date, which will be determined prior to
each issuance.
The coupon on the Class B Junior MTNs shall be based on a variable rate in that payment of
coupon will be subject to availability of cash flow after fulfilling payment obligations that are senior
to the coupon on the Class B Junior MTNs and such rate shall be determined on each coupon
payment date and capped at 12.0% per annum for the first issuance. For subsequent issuances
of the Class B Junior MTNs, the coupon and/or cap rate for the coupon shall be determined prior
to each issuance.
The coupon on the Class C Junior MTNs shall be based on a variable rate in that payment of the
coupon will be subject to availability of cash flow after fulfilling payment obligations that are senior
to the coupon on the Class C Junior MTNs.
The coupon on the MTNs issued shall be paid semi-annually in arrears.
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In the event the Malaysian SPV has insufficient funds to pay coupon on the Class B Junior MTNs
and Class C Junior MTNs on the coupon payment date, the coupon payable on that date shall be
deferred and be payable on the next coupon payment date, and so on (i.e. on a cumulative basis).
Such unpaid coupon shall not be subject to penalty interest.
Call Options
The ABS Transaction is structured with the following
1
:
(i) a call option over all Class A Senior MTNs (the Class A Senior MTNs Call Option) granted
by Malaysian Trustees Berhad (the Bond Trustee) in favour of the REIT Trustee; and
(ii) a call option over The Westin Kuala Lumpur granted by the Malaysian SPV in favour of the
REIT Trustee (the Property Call Option).
Under the ABS Transaction, the subscription of the Class A Senior MTNs by the institutional
holders are subject to the terms of the Class A Senior MTNs Call Option. The Bond Trustee, acting
as the trustee of the Class A Senior MTNs holders, shall grant the Class A Senior MTNs Call
Option in favour of the REIT Trustee, on behalf of the Class A Senior MTNs holders.
The Class A Senior MTNs Call Option price shall be an amount equivalent to the principal amount
outstanding under the Class A Senior MTNs together with interest payable (including default
interest, if any) on all outstanding Class A Senior MTNs up to the Class A Senior MTNs Call Option
settlement date.
The Class A Senior MTNs Call Option is exercisable after the occurrence of a Trigger Event or an
Event of Default and shall expire on the earlier of the following:
(i) On the day of expiry of the MTN Programme and due satisfaction in full of all monies owing
thereunder;
(ii) After expiry of the MTN Programme, on the day of satisfaction in full of all MTNs under the
MTN Programme;
(iii) In the event of exercise of the Property Call Option, on the day of due completion thereof;
and
(iv) On the day the Security Trustee has exercised the Power of Attorney pursuant to the
occurrence of a Trigger Event.
The Property Call Option is exercisable:
(i) at least three months
2
(or such other longer period as may be mutually agreed) prior to the
Expected Maturity Date of the Class A Senior MTNs; or
(ii) within fourteen (14) business days (or such other period as may be mutually agreed) from the
date of the notification by the Bond Trustee that a Trigger Event has occurred; or
1
The Class A Senior MTNs Call Option and the Property Call Option are intended to provide FH-REIT with the ability
to take back the Property in stress events (which are the trigger events listed below) either through (i) acquiring
the Property directly or (ii) acquiring the Class A Senior MTNs (which are held by third parties) so that all the MTNs
are held by FH-REIT and it can choose how and when to wind down the ABS structure.
2
The Property Call Option is exercisable at least three months prior to the Expected Maturity Date of the Class A
Senior MTNs to allow the call option party sufficient time to purchase the Property and for the sale proceeds to be
applied towards redemption of the Class A Senior MTNs on the Expected Maturity Date.
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(iii) within fourteen (14) business days (or such other period as may be mutually agreed) from the
date of the notification by the Bond Trustee that an Event of Default has been declared.
The Property Call Option price shall not be lower than the aggregate of the unpaid and accrued
coupon payments and outstanding nominal value of the Class A Senior MTNs, and the unpaid
interest and principal under the Liquidity Facility (see Liquidity Facility below) and all
outstanding fees and expenses due to all parties under the ABS Transaction and/or being incurred
by the Malaysian SPV.
Upon completion of the sale and purchase of the Property pursuant to the exercise of the Property
Call Option, all MTNs (including the Class A Senior MTNs) shall be subject to mandatory
redemption.
Servicer and Administrator
The REIT Manager, in its capacity as the Servicer under the ABS transaction, will be responsible
for any operations in relation to the Property (including whether and when to draw down on the
Liquidity Facility).
However, TMF Global Services (Malaysia) Sdn Bhd will be the administrator of the Malaysian SPV,
appointed to provide company secretarial services to and administer the statutory duties of the
Malaysian SPV, including but not limited to the following:
Opening and maintaining bank accounts;
Prepare and maintain accounting books and records;
Providing corporate secretarial services; and
Providing two independent resident directors to the Malaysian SPV.
Security / Collateral
The MTNs are intended to be secured by the following securities, with the Class A Senior MTNs
ranking first, followed by the Class B Junior MTNs and the Class C Junior MTNs:
(1) first legal assignment of the Malaysian SPVs rights under the sale and purchase agreement
between the Malaysian SPV and the Originator in respect of The Westin Kuala Lumpur and
all its beneficial rights in respect of The Westin Kuala Lumpur;
(2) first legal charge over The Westin Kuala Lumpur upon discharge of the existing charge on
The Westin Kuala Lumpur created by the Originator in favour of Public Bank (L) Ltd which will
be discharged upon payment of the redemption sum to Public Bank (L) Ltd;
(3) first ranking fixed and floating charge over all the present and future assets and undertakings
of the Malaysian SPV;
(4) first legal charge/assignment over the designated accounts and the credit balances therein;
(5) first legal assignment over the Malaysian SPVs present and future rights, title, interest and
benefits in and under the Tenancy Agreement or lease and all other contracts, and all
warranties and guarantees pertaining to The Westin Kuala Lumpur;
163
(6) first legal assignment over the Malaysian SPVs present and future rights, title, interest and
benefits in and under the relevant insurance policies procured in respect of The Westin Kuala
Lumpur;
(7) irrevocable power of attorney in respect of The Westin Kuala Lumpur executed in favour of
the security trustee appointed under the MTN Programme (the ABS Security Trustee) to
grant full authority to the ABS Security Trustee to (i) dispose of The Westin Kuala Lumpur
upon the occurrence of certain trigger event and/or (ii) to dispose of The Westin Kuala
Lumpur pursuant to the exercise of the call option to buy The Westin Kuala Lumpur;
(8) first legal assignment of the Malaysian SPVs rights under the call option to buy The Westin
Kuala Lumpur;
(9) first legal assignment of the Malaysian SPVs rights under the servicing agreement;
(10) first legal assignment of the Malaysian SPVs rights under the administration agreement; and
(11) any other securities deemed appropriate,
(collectively, the Securities).
The Malaysian SPV shall use the proceeds from the first issuance under the MTN Programme to:
(i) settle the purchase consideration for the acquisition of the Property;
(ii) meet expenses in relation to the ABS Transaction (including reimbursement of expenses
paid) and The Westin Kuala Lumpur including without limitation to meet expenses in relation
to the acquisition of The Westin Kuala Lumpur and transfer of the title, payments of deposits
to the relevant authorities, any apportionment of outgoing payments in accordance with the
sale and purchase agreement and the tenancy agreement or lease and any expenses in
relation to the MTN Programme; and
(iii) make first contribution to the operating accounting (which is used to meet all operating,
management, repairs, service/maintenance and capital expenses on The Westin Kuala
Lumpur).
The trust deed constituting the Junior MTNs and the Class A Senior MTNs (ABS Trust Deed)
provide that approval of both Class A Senior MTN holders and Junior MTNs holders would be
required in relation to the key operational issues set out in paragraph 6.5(b) of the Property Funds
Appendix, save that in the case of sub-paragraph (ix) (transfer or disposal of the assets), the
Class A Senior MTNs holders may unilaterally dispose of the assets of the Malaysian SPV in
accordance with the terms of the MTN Programme upon the occurrence of a Trigger Event (as
defined below) or Event of Default.
Trigger Events
The occurrence of any of the following events will constitute a trigger event (Trigger Event):
(i) The Malaysian SPV fails to meet such amounts captured under the debt service reserve
account as agreed with RAM Rating Services Berhad
1
which shall be determined prior to
the first issuance of the MTNs (DSRA Requirement) within the stipulated timeframe;
1
RAM Rating Services Berhad is a registered rating agency in Malaysia. Appointment of a credit rating agency is
required under the guidelines issued by the Securities Commission Malaysia.
164
(ii) The Malaysian SPV fails to redeem or refinance any of the outstanding Class A Senior
MTNs on its Expected Maturity Date;
(iii) The Originator as the tenant/lessee of The Westin Kuala Lumpur fails to renew the term of
the Tenancy Agreement or lease;
(iv) The Tenancy Agreement or lease is terminated prior to its scheduled termination date; or
(v) Failure of the Malaysian SPV to repay all amounts due and owing in respect of the Liquidity
Facility (as defined below).
Upon occurrence of a Trigger Event, Malaysian Trustees Berhad (Bond Trustee) shall be
entitled to serve a written notice (Trigger Event Notice) to the call option party (being the REIT
Trustee) to grant the call option party the right to either:
(i) exercise the call option to buy the Class A Senior MTNs; or
(ii) exercise the call option to buy The Westin Kuala Lumpur.
The call option party (being the REIT Trustee) shall within 14 business days (or such other period
as may be mutually agreed) of receipt of the Trigger Event Notice, notify the Bond Trustee of its
decision in relation to (i) or (ii) above, failing which, the ABS Security Trustee shall have the
discretion to proceed with the disposal of The Westin Kuala Lumpur. The disposal process shall
be managed by the ABS Security Trustee, under the rights conferred to the ABS Security Trustee
pursuant to the power of attorney executed by the Malaysian SPV in favour of the ABS Security
Trustee. The disposal price shall be determined in accordance with a pre-agreed mechanism.
The sale proceeds from disposal of The Westin Kuala Lumpur shall be deposited into the revenue
account and shall be dealt with in accordance to the provisions stipulated therein, including but not
limited to the mandatory redemption of all the outstanding MTNs.
The occurrence of a Trigger Event shall not constitute an Event of Default.
Events of Default
The events of default include, but are not limited to, the following:
(i) Failure to pay any amount due under the Class A Senior MTNs when due and payable save
and except for non-repayment of the nominal value on Expected Maturity Date;
(ii) Failure to pay any amount due under the Junior MTNs when due and payable save and
except for non-repayment of the nominal value on Expected Maturity Date;
(iii) The proceeds raised from the disposal of The Westin Kuala Lumpur subsequent to the
occurrence of a Trigger Event is insufficient to repay/redeem all the outstanding Class A
Senior MTNs;
(iv) Failure by the Malaysian SPV to observe or perform any of its obligations or covenants
under any of the issue documents or under any undertaking or arrangement entered into in
connection therewith (other than the obligation under paragraph (i) and (ii) above) and in
the case of failure which in the opinion of the Bond Trustee is capable of being remedied,
the Malaysian SPV does not remedy the failure within such period as to be agreed upon in
the issue documents after receipt by the Malaysian SPV of a written notification from the
Bond Trustee of the failure;
165
(v) Any representation, warranty, covenant or undertaking made or given by the Malaysian SPV
under the issue documents or which is contained in any certificate, document or statement
furnished at any time pursuant to the terms of the issue documents proves to have been
incorrect in any material respect on or as of the date made or deemed made and in the case
of a breach which is in the opinion of the Bond Trustee is capable of being remedied, the
Malaysian SPV does not remedy such breach within such period as to be agreed upon in
the issue documents after receipt by the Malaysian SPV of a written notification from the
Bond Trustee of such breach;
(vi) Where any other indebtedness for borrowed monies (other than the Liquidity Facility or
guarantee of the Malaysian SPV becomes due and payable prior to its stated maturity or is
not discharged at maturity or where the security created for such indebtedness for borrowed
monies (other than the Liquidity Facility) becomes immediately enforceable;
(vii) The Malaysian SPV fails to obtain, renew, maintain or comply in any material respect with
all governmental approvals, licences and/or permits which are necessary for the
performance by the Malaysian SPV of its obligations under the issue documents and such
failure continues for such period as to be agreed upon in the issue documents after written
notice is delivered to the Malaysian SPV;
(viii) Any corporate action is taken or any legal proceedings are commenced for the winding up
of the Malaysian SPV except where any such step is of a vexatious or frivolous nature and
the Malaysian SPV has taken action in good faith to set aside such proceedings within such
period as to be agreed upon in the issue documents from the date of service thereof;
(ix) Where any scheme of arrangement under Section 176 of the Malaysian Companies Act
1965 (as amended) has been instituted against the Malaysian SPV;
(x) Insolvency, i.e. the Malaysian SPV is;
(a) deemed unable to pay its debts within the meaning of Section 218(2) of the Companies
Act 1965 of Malaysia (as amended) or becomes unable to pay its debts as they fall
due; or
(b) suspends or threatens to suspend making payments (whether of principal or coupon
or otherwise) with respect to all or any class of its debts arising from borrowed moneys
or a moratorium is agreed or declared in respect of or affecting all or any substantial
part of the borrowed moneys of the Malaysian SPV or any security party;
(xi) At any time any of the provisions of the issue documents is or becomes illegal, void,
voidable or unenforceable;
(xii) A winding order has been made against the Malaysian SPV;
(xiii) A resolution to wind up the Malaysian SPV has been passed;
(xiv) The Malaysian SPV repudiates any of the issue documents or the Malaysian SPV does or
causes to be done any act or thing evidencing an intention to repudiate any of the issue
documents;
(xv) A receiver or a manager or a receiver/manager has been appointed over the whole or any
substantial part of the assets of the Malaysian SPV;
166
(xvi) Revocation, withholding, invalidation or modification of a licence, authorisation or approval
that impairs or prejudices the Malaysian SPVs ability to comply with the terms and
conditions of the MTNs or the provisions of the issue documents;
(xvii) Where the first legal charge over The Westin Kuala Lumpur (the Property Charge) is not
registered at the relevant land office/registry for any reason whatsoever within a period of
twelve (12) months from the presentation date of the Property Charge or such extended
period as may be agreed between the Malaysian SPV and the Bond Trustee;
(xviii) All or a material part of the undertakings, assets, rights or revenue of the Malaysian SPV
is seized, nationalised, expropriated or compulsorily acquired by or under the authority of
any governmental body;
(xix) The Malaysian SPV fails to satisfy any judgment at any time passed against the Malaysian
SPV by any court of competent jurisdiction and no appeal against such judgment or an
application for a stay of execution has been made to any appropriate appellate court within
the time prescribed by law, or such appeal or application for a stay of execution has been
dismissed and no appeal has been made against such dismissal within the time prescribed
by law; and
(xx) Such other events of default as prescribed by the Securities Commission of Malaysias
Trust Deeds Guidelines and such other events of default stipulated by the lead arranger of
the MTN Programme and/or the Solicitors of the lead arranger of the MTN Programme.
Upon occurrence of any of the above events of default, subject to the terms of the ABS Trust Deed,
the Bond Trustee may and shall, at the direction of an agreed majority of the Class A Senior MTNs
holders (or the holders of the Class B Junior MTNs in the event all monies payable under or in
respect of the Class A Senior MTNs have been fully satisfied or where relevant, the holders of the
Class C Junior MTNs in the event all monies payable under or in respect of the Class A Senior
MTNs and the Class B Junior MTNs have been fully satisfied), by written notice to the Malaysian
SPV declare that an event of default has occurred whereupon the ABS Trust Deed and the security
documents shall become immediately enforceable in accordance with their respective terms.
The Class B Junior MTNs holders will not be able to declare an event of default ahead of the Class
A Senior MTNs holders provided that this restriction will not be applicable if there is no Class A
Senior MTNs outstanding at the time of declaration.
The Class C Junior MTNs holders will not be able to declare an event of default ahead of the Class
A Senior MTNs holders and the Class B Junior MTNs holders provided that this restriction will not
be applicable if there is no Class A Senior MTNs and Class B Junior MTNs outstanding at the time
of declaration.
Upon declaration of an event of default pursuant to the ABS Trust Deed, amounts standing to the
credit of the revenue account (save for all deposits received from the tenant/lessee of The Westin
Kuala Lumpur) shall be applied in the following priority and manner:
(i) To pay/set aside any taxes due;
(ii) To pay any fees and expenses due to and/or incurred by the Bond Trustee and other parties
to the transaction in the following order of priority:
(a) Central Bank of Malaysia fees and expenses;
(b) Bond Trustee and transaction administrator fees and expenses;
(c) ABS Security Trustee fees and expenses;
(d) Rating fees and expenses;
167
(e) Facility agent fees and expenses;
(f) Administrator fees and expenses;
(g) Any other fees and expenses due to or incurred by other parties in relation to the
transaction (including Servicer fees) and any charges, commitment fee or commission
in respect of the Liquidity Facility) (if any);
(iii) To pay any accrued and unpaid coupon in respect of the Class A Senior MTNs and the
interest due under the Liquidity Facility (if any);
(iv) To pay the principal outstanding of the Class A Senior MTNs and the principal payments due
under the Liquidity Facility (if any);
(v) To pay/set aside all fees, costs and expenses incurred or to be incurred in connection with
or incidental to the winding up of the Malaysian SPV;
(vi) To pay any accrued and unpaid coupon in respect of Class B Junior MTNs;
(vii) To pay the principal outstanding of the Class B Junior MTNs;
(viii) To pay the principal outstanding of the Class C Junior MTNs;
(ix) To pay any accrued and unpaid coupon in respect of Class C Junior MTNs;
(x) To pay dividends on the preference shares (if any); and
(xi) To redeem all the outstanding preference shares (if any).
In consideration of Standard Chartered Bank Malaysia Berhad (as lead arranger, facility agent and
lead manager for the MTN Programme) (SCBMB) agreeing to their respective roles in relation
to the MTN Programme, the REIT Trustee has agreed to indemnify each of SCBMB and its
affiliates, directors, officers, employees and agents (collectively Relevant Party) from and
against any claims, loss, damage or liability which SCMB and the Relevant Party may incur as a
consequence of, inter alia:
(a) any actual or alleged breach of representations, warranties and undertakings made by the
Malaysian SPV under the MTN Programme;
(b) the Malaysian SPVs failure to perform any of its obligations under the MTN Programme or
to issue on the agreed issue date;
(c) the performance by SCBMB of their participation in the transactions contemplated under the
MTN Programme and their obligations under the MTN Programme;
(d) any untrue or misleading (or allegedly untrue or misleading) statement in, or any omission (or
alleged omission) from the information memorandum in connection with the MTN Programme
or any additional written information provided by the Malaysian SPV to SCBMB; and
(e) any failure or alleged failure by the Malaysian SPV or its agents
1
to comply with any laws and
regulations in any jurisdiction in relation to the MTN Programme,
1
As the Malaysian SPV is an orphan company, its operations are conducted by service providers, acting as the
Malaysian SPVs agents, for example, TMF Global Services (Malaysia) Sdn Bhd as the administrator of the
Malaysian SPV and the REIT Manager acting as the servicer.
168
save and except in the case of any gross negligence, wilful default or fraud of SCBMB and the
Relevant Party.
(See Overview of the Acquisition of the Properties Acquisition of The Westin Kuala Lumpur for
further details on the holding structure of the Property.)
Liquidity Facility
The Malaysian SPV will obtain from Standard Chartered Bank Malaysia Berhad (Liquidity
Facility Provider) a revolving credit facility of up to MYR4,000,000.00 or such other amount as
may be agreed between the Liquidity Facility Provider and the Malaysian SPV (the Liquidity
Facility).
The Liquidity Facility shall also be secured by the Securities with the Liquidity Facility ranking pari
passu with the Class A Senior MTNs.
The Liquidity Facility will be utilised to fund the DSRA Requirement under the ABS Transaction.
JPY3.0 billion Kobe Excellence TMK Series 1 Bonds issuance in relation to ANA Crowne
Plaza Kobe
The debt facilities contain covenants on the maintenance of the current ownership of the preferred
equity and specified equity of Kobe Excellence TMK
1
.
A summary of selected information on the JPY3.0 billion Kobe Excellence TMK Series 1 Bonds
due on 14 July 2019 (the Bonds) issued by Kobe Excellence TMK is set out in the table below:
Debt Provider United Overseas Bank Limited, acting through its
Tokyo Branch
Debt Amount JPY2.35 billion (S$28.9 million)
2
Purpose of Issue To (i) partially fund Kobe Excellence TMKs capex,
(ii) fund Kobe Excellence TMKs upfront fees of
JPY9.0 million, and (iii) fund Kobe Excellence
TMKs (a) debt service reserve and capex reserve
and/or (b) recoup initial equity investment for the
purchase of the beneficial interest under the trust
established under the Real Estate Management
and Disposition Trust Restatement Agreement by
and between the Bank of New York Mellon (Japan)
Ltd. and Kobe Excellence TMK (as beneficial
interest holder) dated September 3, 2009 (as
amended and assigned).
Tenor (years) (as at the Listing Date) Five years
Interest Rate The Bonds bear interest of:
(i) Yen LIBOR plus 1.6% per annum from and
including the Issue Date up to but excluding
the Listing Date; and
(ii) Yen LIBOR plus 1.28% per annum from and
including the Listing Date up to but excluding
the final maturity date.
1
For as long as United Overseas Bank Limited, acting through its Tokyo Branch, is a Bond holder, Kobe Excellence
TMK shall cause FH-REIT to directly or indirectly hold 100% of the specified equity interests (tokutei shusshi) and
preferred equity interests (yusen shusshi), respectively, of Kobe Excellence TMK.
2
Although an aggregate of JPY 3.0 billion in principal amount of bonds was initially issued, the current principal
amount of bonds outstanding is JPY2,349,870,000.
169
Default Interest Rate 3% per annum, on a 360-day year basis
Interest Payment Date 30 March, 30 June, 30 September and 30
December of each year
Redemption Kobe Excellence TMK is required to pay in one
lump sum the principal outstanding on the Bonds at
100% of the principal amount thereof (together with
accrued interest).
Kobe Excellence TMK shall not during the term of the Bonds:
(1) instruct the trustee to:
(a) borrow money or create any lien over ANA Crowne Plaza Kobe; or
(b) sell, assign, transfer or dispose of ANA Crowne Plaza Kobe without the consent of the
Bond holders; and
(2) borrow money or create any lien over the beneficial interest for any purpose without the
consent of Bond holders.
For the avoidance of doubt, Kobe Excellence TMK may, after the Listing Date, (i) sell, transfer,
assign, or dispose of the beneficial interest and (ii) instruct the trustee to sell, transfer, assign, or
dispose of ANA Crowne Plaza Kobe, in whole or in part, provided that Kobe Excellence TMK
effects an early redemption of the Bonds pursuant to the terms and conditions of the Bonds.
Aggregate Leverage
As at the Listing Date, FH-REIT will have an Aggregate Leverage of 41.7% based on the Offering
Price. The REIT Manager has obtained, in respect of FH-REIT, a provisional credit rating of (P)
Baa2 (stable outlook) from Moodys.
1
On the basis of the S$613 million under the TLF, JPY2.35
billion (equivalent to approximately S$29 million) of Kobe Excellence TMK Series 1 Bonds and
MYR95 million (equivalent to approximately S$37 million) of Class A Senior MTNs, being all the
debt that will be drawn down on the Listing Date, S$112.7 million (being 16.6%) will mature after
approximately three years from the Listing Date and S$565.8 million (being 83.4%) will mature
after approximately five years from the Listing Date. The S$50.0 million under the RCF drawn
down on Listing Date is a short term loan.
FH-BT
As at the Listing Date, FH-BT will be dormant and will not have any debt facilities in place.
1
The provisional credit rating assumes the listing of FHT on the SGX-ST, the drawdown of debt facilities of S$728.6
million and the acquisition of the Properties by FH-REIT. The final rating is conditional upon the successful
completion of all the events described in the foregoing sentence. The REIT Manager expects Moodys to assign its
final rating of FH-REIT on the Listing Date and will make an announcement on SGXNET of the final rating when it
has been assigned to FH-REIT. All ratings are subject to revision or withdrawal at any time. Moodys has not
provided its consent, for the purposes of Section 249 (read with Section 302) of the SFA, to the inclusion of the credit
rating information and is therefore not liable for such information under Sections 253 and 254 (read with Section
302) of the SFA and Sections 282N and 282O of the SFA. While the REIT Manager has taken reasonable action to
ensure that the information has been reproduced in its proper form and context, and that it has been extracted fairly
and accurately, neither the REIT Manager nor any other party has conducted an independent review of, nor verified
the accuracy of, such information. The provisional credit rating obtained from Moodys is current and Moodys will
be paid by FH-REIT to provide the credit rating. The credit rating is not a recommendation to invest in any securities.
Issuer credit ratings express Moodys opinion of an entitys creditworthiness and ability to meet its senior financial
obligations. More information on Moodys and its ratings are available on its website www.moodys.com.
170
UNAUDITED PRO FORMA FINANCIAL INFORMATION
FH-REIT
The following tables present Unaudited Pro Forma Financial Information based on the Offering
Price, assuming the Over-Allotment Option is fully exercised.
The Independent Reporting Auditor, Ernst & Young LLP, have reported on the Unaudited Pro
Forma Financial Information and their report is included in Appendix B, Independent Reporting
Auditors Report On The Compilation Of Unaudited Pro Forma Financial Information. The
Unaudited Pro Forma Financial Information has been prepared on the basis of the assumptions
and accounting policies set out in Appendix C, Unaudited Pro Forma Financial Information, and
should be read together with these assumptions and accounting policies.
The Unaudited Pro Forma Statements of Total Return of FH-REIT for FY2011, FY2012 and
FY2013 and Q1 FY2013 and Q1 FY2014, reflect the total return of FH-REIT assuming that the
following events or agreements had occurred, were entered into or were effective on 1 October
2010, or date of acquisition, if later, under the same terms as set out in the Prospectus:
(1) the Offering;
(2) the acquisition of the Singapore SPC and Japan SPC and Properties;
(3) the Master Lease and Tenancy Agreements;
(4) the Master Serviced Residence Management Agreements;
(5) the Hotel Management Agreements; and
(6) the fee arrangements of the REIT Manager, the REIT Trustee, the Hotel Managers, the
Serviced Residence Operators, and other asset managers and third parties as set out in
Overview Certain Fees and Charges (the Fee Arrangements)
The Unaudited Pro Forma Balance Sheets of FH-REIT as at 30 September 2013 and as at 31
December 2013 present the financial position of FH-REIT assuming that the following events or
agreements had occurred, were entered into or were effective on 30 September 2013 and 31
December 2013, respectively, under the same terms as set out in the Prospectus:
(1) the Offering;
(2) the acquisition of the Singapore SPC and Japan SPC and Properties;
(3) the Master Lease and Tenancy Agreements;
(4) the Master Serviced Residence Management Agreements;
(5) the Hotel Management Agreements; and
(6) the Fee Arrangements
The Unaudited Pro Forma Cash Flow Statement of FH-REIT for the year ended 30 September
2013 and 3 months ended 31 December 2013 shows the cash flows of FH-REIT assuming the
following events or agreements had occurred, were entered into or were effective on 1 October
2012, under the same terms as set out in the Prospectus:
(1) the Offering;
171
(2) the acquisition of the Singapore SPC and Japan SPC and Properties;
(3) the Master Lease and Tenancy Agreements;
(4) the Master Serviced Residence Management Agreements;
(5) the Hotel Management Agreements; and
(6) the Fee Arrangements
The objective of the Unaudited Pro Forma Financial Information is to show what the total returns,
cash flow and financial position might have been had FH-REIT existed at an earlier date. However,
the Unaudited Pro Forma Financial Information of FH-REIT is not necessarily indicative of the total
returns and cash flow of the operations or financial position that would have been attained had
FH-REIT actually existed earlier. The Unaudited Pro Forma Financial Information has been
compiled for illustrative purposes only and, because of its nature, may not give a true picture of
the actual total return, cash flows or financial position of FH-REIT.
FH-BT AND FH-TRUST
No pro forma financial information of FH-BT has been presented as it is newly established and will
be dormant as at the Listing Date. Accordingly, no consolidated pro forma financial information of
FH-Trust has been presented.
Unaudited Pro Forma Statements of Total Return for FH-REIT
FY2011 FY2012 FY2013
Q1
FY2013
Q1
FY2014
(S$000) (S$000) (S$000) (S$000) (S$000)
Gross revenue 84,843 93,880 97,583 25,752 26,034
Property operating expenses (16,046) (17,014) (17,254) (4,269) (4,359)
Net property income 68,797 76,866 80,329 21,483 21,675
REIT Managers management
fees (6,499) (6,959) (7,055) (1,819) (1,840)
Other management fees (1,650) (1,666) (1,633) (432) (415)
Trustees fees (481) (482) (453) (118) (110)
Other expenses
(1)
(31,631)
(2)
(2,327) (2,201) (567) (547)
Interest and other income
(3)
50 7 8
Finance costs
(5)
(16,241) (15,964) (15,544) (4,088) (3,817)
Total return before tax and
distribution 12,345 49,475 53,451 14,459 14,946
Taxation (2,975) (1,801) (2,297) (703) (825)
Total return after tax 9,370 47,674 51,154 13,756 14,121
Non-tax deductible items and
other adjustments
(4)
43,573 14,593 15,264 3,811 4,046
Income available for
distribution to holders of
Stapled Securities 52,943 62,267 66,418 17,567 18,167
172
Notes:
(1) Other expenses comprise operating expenses such as compliance expenses, annual listing fees, registry fees, audit
and tax advisory fees, valuation fees, insurance fees, commission fees, costs associated with the preparation and
distribution of reports to the holders of the Stapled Securities, investor communication costs and other
miscellaneous costs.
(2) In FY2011, in addition to the expenses referred to in (1) above, it includes stamp duty in relation to the acquisition
of United Kingdom and Australia properties and non-capitalised listing fees.
(3) Interest and other income comprise mainly interest earned on cash and bank balances. There is no payment top-up
recognised in the pro forma financial statements because such top-up relates to specific conditions in the future that
are not applicable to the historical pro forma periods presented (i.e. up to 30 November 2015 so long as the Property
is not sold).
(4) Non-tax deductible items and other adjustments comprise the REIT Managers management fees paid/payable in
Stapled Securities, MIT Managers management fees paid/payable in Stapled Securities, REIT Trustees fees,
amortisation of debt-related transaction costs/insurance fee, serviced residences management fees and trademark
licence fees which are paid/payable in Stapled Securities, stamp duty and non-capitalised listing fees.
(5) Finance costs comprise interest expense and amortisation of debt-related transaction costs.
Unaudited Pro Forma Balance Sheets of FH-REIT
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Non-current assets
Investment properties
(1)
1,648,798 1,645,015
Deferred tax assets
(2)
317 89
Current assets
Cash and cash equivalents 27,117 27,330
Tax recoverable
(3)
62,942 65,798
Other current assets 270 261
Total assets 1,739,444 1,738,493
Current liabilities
Other current liabilities 1,288 1,386
Borrowings
(5)
50,000 50,000
Non-current liabilities
Security deposits
(4)
23,717 23,861
Deferred tax liabilities
(2)
4,393 4,813
Borrowings
(5)
664,232 662,807
Total liabilities 743,630 742,867
Net assets attributable to holders of
Stapled Securities 995,814 995,626
Number of Stapled Securities in issue (000)
(6)
1,192,628 1,192,628
Net asset value per Stapled Securities (S$) 0.83 0.83
Notes:
(1) Assumes that costs of the investment properties remain unchanged from S$1,649 million at 30 September 2013 and
S$1,645 million at 31 December 2013.
173
(2) Deferred tax assets and deferred tax liabilities arose from the acquisition of the entities by FH-REIT in relation to
ANA Crowne Plaza Kobe.
(3) Tax recoverable relates to recoverable UK value added tax and Singapore goods and services tax paid for the
acquisition of certain investment properties. It also includes the tax receivable amount which arose from the
acquisition of the entities by FH-REIT in relation to ANA Crowne Plaza Kobe.
(4) Cash security deposits are collected from master lessees as part of the lease agreements (except for master lessee
in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being provided by
master lessee and tenant in the form of bankers guarantee. The use of such cash from security deposits are
disclosed under Use of Proceeds.
(5) Comprises principal amount of borrowings of S$714 million, after deducting unamortised debt upfront costs of S$7
million at 30 September 2013 and comprises principal amount of borrowings of S$713 million, after deducting
unamortised debt upfront costs of S$7 million at 31 December 2013.
(6) Based on the Offering Price of S$0.88 per Stapled Security.
Unaudited Pro Forma Cash Flow Statements of FH-REIT
FY2013 Q1 FY2014
(S$000) (S$000)
Operating activities
Net income before income tax 24,211 14,946
Adjustments for:
Amortisation expense
(1)
1,588 398
REIT Managers management fees paid or payable in
Stapled Securities
(2)
7,043 1,840
Other management fees paid or payable in Stapled
Securities
(3)
1,301 336
Borrowing costs 14,205 3,420
Serviced Residences Management Fees and Trademark
License Fees paid or payable in Stapled Securities
(4)
5,008 1,401
Other expenses 29,014 8
Operating income before working capital changes 82,370 22,349
Changes in receivables (8,132) (546)
Changes in payables 246 (4)
Cash security deposits received
(5)
24,095
Cash flows from operations 98,579 21,799
Taxes paid (1,297) (1,386)
Net cash inflows generated from operating activities 97,282 20,413
Investing activities
Purchase of investment properties (1,525,858)
Acquisition costs (26,453)
Net cash outflow on acquisition of subsidiaries
(6)
(169,661)
Cash flows used in investing activities (1,721,972)
Financing activities
Proceeds from issue of Stapled Securities 1,049,513
Issue expenses (28,542)
Proceeds from borrowings 742,046
Repayment of borrowings (50,000)
174
FY2013 Q1 FY2014
(S$000) (S$000)
Payment of upfront debt and arrangement costs (7,232)
Distribution to holders of Stapled Securities (32,593) (33,617)
Interest paid (14,164) (3,420)
Cash flows generated from/(used in) financing activities 1,659,028 (37,037)
Net increase/(decrease) in cash and cash equivalents 34,338 (16,624)
Cash and cash equivalents at beginning of year/period 34,338
Cash and cash equivalents at end of year/period 34,338 17,714
Notes:
(1) This relates to the amortisation of the debt upfront costs.
(2) The REIT Manager has elected to receive 100% of the Base Fee and Performance Fee in the form of Stapled
Securities.
(3) The MIT Trustee has elected to pay the MIT Manager 100% of the Base Fee and Performance Fee in the form of
Stapled Securities.
(4) The Managers have elected that the Serviced Residences Operators receive 100% of the Serviced Residences
Management Fees and Trademark License Fees in the form of Stapled Securities.
(5) Cash security deposits are collected from master lessees as part of the lease agreements (except for master lessee
in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being provided by
master lessee and tenant in the form of bankers guarantee. The use of such cash from security deposits are
disclosed under Use of Proceeds.
(6) The effect of acquisition of the entities by FH-REIT in the pro forma cash flows for the year ended 30 September
2013 is set out below:
FY2013
(S$000)
Non-current assets
Investment property 176,406
Others 417
176,823
Current assets
Cash 3,922
Others 337
Total assets 181,082
Less: Non-current liabilities (38,730)
Less: Current liabilities (5,781)
Fair value of net assets of subsidiaries acquired 136,571
Purchase price 136,571
Less: Cash acquired (3,922)
Add: Bank borrowings assumed 37,012
Net cash outflow 169,661
175
Significant Non-Cash Transactions
During the year ended 30 September 2013 and the three months ended 31 December 2013,
respectively, 15,114,000 and 3,978,000 Stapled Securities at S$0.88 per unit, were issued and
accrued as payment for the followings:
(1) The REIT Managers management fees which are payable in the form of Stapled Securities
(see Section G Note (1) in Appendix C) amounting to approximately S$7.0 million and S$1.8
million, respectively, during the year ended 30 September 2013 and the three months ended
31 December 2013;
(2) The MIT Managers management fees which are payable in the form of Stapled Securities
(see Section G Note (2) in Appendix C) amounting to approximately S$1.3 million and S$0.3
million, respectively, during the year ended 30 September 2013 and the three months ended
31 December 2013; and
(3) The Serviced Residences Management Fees and Trademark License Fees which are
payable in the form of Stapled Securities amounting to approximately S$5.0 million and
S$1.4 million, respectively, during the year ended 30 September 2013 and the three months
ended 31 December 2013.
176
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read together with the information in the Unaudited Pro Forma
Financial Information, included elsewhere in this document. Statements contained in this
Managements Discussion and Analysis of Financial Condition and Results of Operations that
are not historical facts may be forward-looking statements. Such statements are subject to certain
risks, uncertainties and assumptions that could cause actual results to differ materially from those
forecasts. Under no circumstances should the inclusion of such information herein be regarded as
a representation, warranty or prediction with respect to the accuracy of the underlying
assumptions by the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the
Global Coordinator, the Joint Bookrunners or any other persons, or that these results will be
achieved or are likely to be achieved (see Forward-Looking Statements and Risk Factors for
further details). Recipients of this Prospectus and all prospective investors in the Stapled
Securities are cautioned not to place undue reliance on these forward-looking statements.
The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only,
and is based on certain assumptions after making certain adjustments to:
(i) reflect the unaudited pro forma statements of total return for FY2011, FY2012, FY2013, Q1
FY2013 and Q1 FY2014 assuming the Offering, the acquisition of the Singapore SPC and
Japan SPC and Properties, the Master Lease and Tenancy Agreements and the Fee
Arrangements had occurred or were effective on 1 October 2010, or date of acquisition, if
later;
(ii) present the unaudited pro forma balance sheets as at 30 September 2013 and 31 December
2013 assuming the Offering, the acquisition of the Singapore SPC and Japan SPC and
Properties, the Master Lease and Tenancy Agreements and the Fee Arrangements had
occurred on or were effective on 30 September 2013 and 31 December 2013; and
(iii) show the unaudited pro forma cash flow statements for FY2013 and Q1 FY2014 assuming
the Offering, the acquisition of the Singapore SPC and Japan SPC and Properties, the
Master Lease and Tenancy Agreements and the Fee Arrangements had occurred or were
effective on 1 October 2012.
The Unaudited Pro Forma Financial Information is not necessarily indicative of the results of the
operations or the financial position that would have been attained had the acquisition of the
Properties and the Fee Arrangements actually occurred in the relevant periods. The Unaudited
Pro Forma Financial Information, because of its nature, may not give a true or accurate picture of
FH-REITs actual total returns or financial position.
The following discussion and analysis of the financial condition and results of operations is based
on and should be read in conjunction with the Unaudited Pro Forma Financial Information, and
related notes thereto, which are included elsewhere in this Prospectus.
(See Appendix C, Unaudited Pro Forma Financial Information for further details.)
GENERAL BACKGROUND
FH-REIT is a real estate investment trust established in Singapore as a unit trust pursuant to the
FH-REIT Trust Deed. As FH-REIT was only established on 12 June 2014, FH-REIT has no
historical operating results and financial information based on which recipients of this Prospectus
may evaluate FH-REIT. FH-REITs first financial year will be from 12 June 2014, the date of its
establishment, to 30 September 2015.
177
FH-REIT is established with the principal investment strategy of investing on a long-term basis,
directly or indirectly, in a diversified portfolio of income-producing real estate located anywhere in
the world except Thailand, which is used primarily for hospitality and/or hospitality-related
purposes, whether wholly or partially, as well as real estate-related assets in connection to the
foregoing.
FH-REIT
As at the Listing Date, the Initial Portfolio comprises the six Hotels and six Serviced Residences
in Singapore and overseas. The tenures of the Properties to be acquired by FH-REIT from their
respective Vendors, which will commence on the Listing Date, are set out in the table below:
Hotel
Leasehold
Tenure
(years) Vendor
Master Lessee or
Tenant
InterContinental Singapore 75 BCH Hotel Investment
Pte Ltd
BCH Hotel Investment
Pte Ltd
Novotel Rockford Darling Harbour 84 Viewgrand Trust B Viewgrand Trust C
Park International London 75 Global-Link Investments
Limited
P I Hotel Management
Limited
Best Western Cromwell London 75 Global-Link Investments
Limited
P I Hotel Management
Limited
ANA Crowne Plaza Kobe
(1)
Freehold Excellence Prosperity
(Singapore) Pte. Ltd.
Hotel component:
K.K. Shinkobe Holding
Retail component: Y.K.
Toranomon Properties
The Westin Kuala Lumpur Freehold JBB Hotels Sdn. Bhd. JBB Hotels Sdn. Bhd.
Note:
(1) ANA Crowne Plaza Kobe is held through a trust beneficiary interest (TBI), in the form of a beneficiary interest in
a Japanese trust that holds title to ANA Crowne Plaza Kobe.
Serviced Residence
Leasehold
Tenure
(years) Vendor Master Lessee
Fraser Suites Singapore 75 River Valley Apartments
Pte Ltd, River Valley
Shopping Centre Pte
Ltd and River Valley
Tower Pte Ltd
River Valley Apartments
Pte Ltd
Fraser Suites Sydney 75 Frasers Townhall
Residences Pty Ltd
Frasers Townhall
Residences Operations
Pty Ltd
Fraser Place Canary Wharf 75 Fairdace Limited Fairdace Limited
Fraser Suites Queens Gate 75 Queensgate Garden
(C.I.) Limited
39QGG Management
Limited
Fraser Suites Glasgow 75 Fairdace Limited Fairdace Limited
Fraser Suites Edinburgh 75 Frasers (St Giles Street)
Edinburgh Limited
Frasers (St Giles Street)
Management Limited
178
The term of the Master Lease or Tenancy Agreements for each of the Properties is set out in the
table below:
Hotel Term of Master Lease or Tenancy (years)
InterContinental Singapore 20 + 20 years commencing from the Listing Date
(at the option of the Master Lessee)
Novotel Rockford Darling Harbour
Park International London 10 + 10 +10 +10 years commencing from the Listing
Date (at the option of the Master Lessee)
Best Western Cromwell London
ANA Crowne Plaza Kobe 10 years commencing from the Listing Date
(fixed and non-renewable)
The Westin Kuala Lumpur Three + three + three years commencing from the
Listing Date
(at the option of the Tenant)
Serviced Residence Term of Master Lease (years)
Fraser Suites Singapore
20 + 20 years commencing from the Listing Date
(at the option of the Master Lessee)
Fraser Suites Sydney
Fraser Place Canary Wharf
Fraser Suites Queens Gate
Fraser Suites Glasgow
Fraser Suites Edinburgh
FH-REIT may, in relation to any Property for which the option for an additional lease is not
exercised by the relevant Master Lessee or Tenant, enter into a new master lease agreement or
tenancy agreement, on terms to be agreed, with either the existing Master Lessee or Tenant or a
new master lessee or tenant. The Master Lease Agreements contain long lease terms with a view
to securing a long-term stream of quality rental income for FH-REIT.
FH-REIT may be unable to appoint a master lessee or tenant for any of the Properties in its
portfolio at the expiry of the relevant master lease or tenancy agreement, for example because of
a failure to reach commercially favourable terms with the relevant Master Lessee or Tenant or
potential new master lessees or tenants. In the event that this happens, in order to ensure the
Propertys continued operation and revenue generation, FH-REIT will appoint FH-BT as a master
lessee or tenant for that Property on substantially the same terms as the relevant Master Lease
Agreement or Tenancy Agreement.
In relation to each Property, the relevant Master Lessee or Tenant will appoint the Hotel Managers
and Serviced Residence Operators to manage the day-to-day operations and marketing of that
Property.
FH-BT
No pro forma financial information of FH-BT has been presented as it was newly established and
will be dormant as at the Listing Date. Accordingly, no consolidated pro forma financial information
of FH-Trust has been presented.
179
Acquisition of the Properties
Based on the unaudited pro forma balance sheets as at 30 September 2013 and 31 December
2013, FH-REIT has purchased the leasehold or freehold interests (as the case may be) in the
Properties at an aggregate purchase price of approximately S$1,649 million and S$1,645 million,
respectively, after taking into consideration two independent valuations as at 31 December 2013
assuming FH-REIT (through the REIT Trustee and/or its wholly-owned subsidiaries or entities) has
entered into the following agreements on a willing buyer and willing seller basis with the Vendors:
(i) Sale and Purchase Agreements for all properties except for ANA Crowne Plaza Kobe and;
(ii) Share Purchase Agreements for acquiring Excellence Prosperity TMK Pte. Ltd (the
Singapore SPC) and Excellence Prosperity (Japan) K.K (the Japan SPC) in relation to
ANA Crowne Plaza Kobe.
The leasehold or freehold interests (as the case may be) in each of the Properties will not be
acquired at more than the higher of the two independent valuations. The purchase price under the
Property Sale and Purchase Agreements, Westin Sale and Purchase Agreement and Share
Purchase Agreements will be satisfied either wholly in cash, or partly in cash and partly by way
of Stapled Securities. FH-REIT will fund the purchase price partly by the issue of S$1,050 million
in and S$1,050 million in Stapled Securities and the balance by borrowings as at 30 September
2013 and 31 December 2013, respectively.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties and Use of
Proceeds for further details.)
FACTORS AFFECTING FH-REITS RESULTS OF OPERATIONS
Total Gross Revenue of FH-REIT
The total gross revenue of FH-REIT (the Total Gross Revenue) consists of gross rental income
from the Properties under the Master Lease and Tenancy Agreements.
Gross Rental Income from the Properties under the Master Lease and Tenancy Agreements
FH-REIT will receive gross rental income under the terms of the Master Lease and Tenancy
Agreements, comprising a fixed rent (the Fixed Rent) and a variable rent (the Variable Rent).
The Fixed Rent and Variable Rent of the Properties are set out in the table below:
Hotel Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of Gross
Operating Revenue and Percentage
of Gross Operating Profit less
Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
InterContinental
Singapore SGD 8,000 0.0 76.0
Novotel Rockford
Darling Harbour AUD 2,500 0.0 84.0
Park International
London GBP 1,300 0.0 91.5
180
Hotel Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of Gross
Operating Revenue and Percentage
of Gross Operating Profit less
Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
Best Western Cromwell
London GBP 600 0.0 91.5
ANA Crowne Plaza
Kobe JPY 600,000 0.0 77.8
The Westin Kuala
Lumpur MYR 14,800 0.0 78.5
Serviced Residence Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of Gross
Operating Revenue and Percentage
of Gross Operating Profit less
Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
Fraser Suites Singapore SGD 7,700 20.0 59.0
Fraser Suites Sydney AUD 4,200 20.0 54.5
Fraser Place Canary
Wharf GBP 1,400 20.0 65.0
Fraser Suites Queens
Gate GBP 1,800 20.0 67.0
Fraser Suites Glasgow GBP 400 20.0 50.0
Fraser Suites Edinburgh GBP 500 20.0 45.0
Note:
(1) May include unutilised FF&E reserve not carried forward to the following year.
Should the calculation of the Variable Rent yield a negative figure, the overall rent will then be the
Fixed Rent amount. It is assumed that there is no unutilised FF&E reserves and hence, there is
no such element in variable rent.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Master Lease
and Tenancy Agreements for further details.)
Property Expenses
Property expenses for FH-REIT comprise (i) property tax for hospitality properties, (ii) insurance
expenses, (iii) Management Corporation Strata Title Plan (MCST) sinking fund contribution
(Sinking Fund Contributions) in Singapore or its equivalent funds in overseas and (iv) other
property expenses.
181
Property Tax for Hospitality Properties
Property Tax for Hotels
For hotel properties, it has been assumed that the basis of assessment for property tax by the tax
authorities in each of the jurisdictions will remain the same as the latest year of assessment.
Property Tax for Serviced Residences
For serviced residences, it has been assumed that the basis of assessment for property tax by the
tax authorities in each of the jurisdictions will remain the same as the latest year of assessment.
Insurance Expenses
FH-REIT incurs expenses for certain insurance coverage, including fire insurance, physical
damage and terrorism insurance for the Properties.
Common Area Maintenance Fees
Some properties form part of MCST (or the equivalent of a MCST in overseas jurisdiction) and are
required to pay their respective share value of contributions towards maintenance and other
expenses in the development to the MCST. Under the Master Lease and Tenancy Agreements,
FH-REIT will bear the common area maintenance fees which are levied for repairs and
improvements to, and maintenance of, the common property and the renewal or replacement of
parts of the common property, fixtures, fittings and other property held by or on behalf of the MCST
and such other liabilities expected to be incurred in the future.
Serviced Residences Management Fee and Trademark Licence Fee
A serviced residences management fee comprising base management fee, marketing fee and
incentive fee is payable to the Serviced Residence Operators for management services rendered
for the Serviced Residences. A trademark licence fee is payable to the Serviced Residence
Operator for use of the relevant trademarks used in connection with the operations of the Serviced
Residences. The base management fee, marketing fee and trademark license fee are all 1.0% per
annum of the gross operating revenue of the Serviced Residences respectively. The incentive fee
is 8.0% per annum of gross operating profit of the Serviced Residences.
It has been assumed that the REIT Manager has elected to pay 100.0% of fees payable to the
Serviced Residences Operators in the form of Stapled Securities. Where the management fees
are payable in Stapled Securities, the REIT Manager has assumed that such Stapled Securities
are issued at the Offering Price.
REIT Managers Management Fee
Pursuant to the FH-REIT Trust Deed, the REIT Manager is entitled to a management fee
comprising a Base Fee of 0.3% per annum of the value of the FH-REITs Deposited Property and
a Performance Fee of 5.5% of the aggregate Distributable Income of FHT in the relevant financial
year (calculated before accounting for the REIT Performance Fee and BT Performance Fee but
after accounting for the REIT Base Fee and the BT Base Fee).
182
There should be no double-counting of fees. In the event that both the REIT Manager and the
Trustee-Manager are entitled to the Performance Fee, such fees payable to both the REIT
Manager and the Trustee-Manager will be apportioned based on the respective proportionate
contributions of FH-REIT and FH-BT in the Performance Fee
1
. For the avoidance of doubt, the
maximum Performance Fee payable to both the REIT Manager and the Trustee-Manager
collectively is 5.5% per annum of the aggregate Distributable Income of FHT in the relevant
financial year (calculated before accounting for the Performance Fee but after accounting for the
Base Fee).
The REIT Managers management fee includes the reimbursement of other asset management
fee paid by FH-REIT and its subsidiaries.
The REIT Manager has been assumed to receive 100.0% of its management fees in the form of
Stapled Securities for Forecast Period 2014 and Projection Year 2015. Where the management
fees are payable in Stapled Securities, the REIT Manager has assumed that such Stapled
Securities are issued at the Offering Price.
(See Management and Corporate Governance Fees Payable to the REIT Manager for further
details of the fees payable to the REIT Manager, which include other fees such as the acquisition
fee and divestment fee.)
MIT Managers management fee
Pursuant to the Investment Management Agreement for MIT Australia, the MIT Manager is entitled
to a management fee comprising a base fee of 0.3% per annum of the total value of the property
of MIT Australia and a performance fee of 5.5% of the aggregate earnings before interest, taxes,
depreciation and amortisation of MIT Australia in the relevant financial year. For the purposes of
the unaudited Pro Forma Financial Information, it is assumed that 100.0% of the MIT Managers
management fees were paid in Stapled Securities. Where the management fees are payable in
Stapled Securities, the MIT Manager has assumed that such Stapled Securities are issued at the
Offering Price.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to Australian Properties for further details.)
Kobe Asset Managers management fee
Pursuant to the Asset Management Agreement, the Kobe Asset Manager is entitled to
(a) an annual management fee of JPY14.0 million (exclusive of consumption tax); and
(b) where the disposition of ANA Crowne Plaza Kobe (or any part thereof, directly or indirectly,
including the disposition of the equity shares in Kobe Excellence TMK or any restructuring
involved in the disposition) occurs, Kobe Excellence TMK shall pay to the Kobe Asset
Manager an additional fee (Additional Fee), which shall be determined at the time of the
disposition based on consultation between the parties on good faith, for the additional
services rendered by the Kobe Asset Manager for the disposition, provided that no
disposition fee is payable to the Kobe Asset Manager for the disposition of ANA Crowne
Plaza Kobe as part of the Listing; and
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
183
(c) a brokerage services fee for brokerage services (the Brokerage Services Fee) rendered
by the Kobe Asset Manager for the disposition of ANA Crowne Plaza Kobe (or any part
thereof, directly or indirectly, including the disposition of the equity shares in Kobe
Excellence TMK or any restructuring involved in the disposition), the amount of which shall
be determined at the time of the disposition based on consultation between the parties on
good faith, payable separately from the Additional Fee, upon the completion of the
disposition through the brokerage services provided by the Kobe Asset Manager.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to ANA Crowne Plaza Kobe for further details.)
ABS Servicer Fee
Pursuant to the Servicing agreement, the Servicer is entitled to a Servicer fee (exclusive of
applicable service tax or goods and services tax), payable in arrears on a semi-annual basis (save
and except for the first and the last servicing period) which is equivalent to an amount of
MYR360,000.00.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to The Westin Kuala Lumpur for further details.)
Trustees Fees
REIT Trustees fees
Pursuant to the FH-REIT Trust Deed, the REIT Trustees fee is presently charged on a scaled
basis of up to 0.015% per annum of the value of the FH-REIT Deposited Property, subject to a
minimum fee of S$15,000 per month, excluding out-of-pocket expenses and GST.
(See Management and Corporate Governance Fees Payable to the REIT Trustee for further
details.)
MIT Trustees Fees and MIT Sub-Trustees Fees
Pursuant to the MIT Trust Deeds, the MIT Trustees fee and MIT Sub-trustees fees are
AUD55,000 per annum and AUD15,000 per annum per sub-trust respectively, excluding out-of-
pocket expenses and GST. As there are two MIT Sub-trusts, the aggregate fee payable to the MIT
Sub-trustee is AUD30,000 per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to Australian Properties for further details.)
TMK Trustees Fee
Pursuant to the Japan Trust Agreement, the TMK Trustees fee is JPY5.4 million per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to ANA Crowne Plaza Kobe for further details.)
ABS Security Trustees Fee
Pursuant to the ABS Trust Deed, the ABS Security Trustees fee is MYR60,000 per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to The Westin Kuala Lumpur for further details.)
184
Trustee-Managers Fees
Pursuant to the FH-BT Trust Deed, the Trustee-Manager is entitled to:
(a) a management fee comprising a Base Fee of 0.3% per annum of the value of the FH-BT Trust
Property and a Performance Fee of 5.5% of the aggregate Distributable Income of FHT in the
relevant financial year (calculated before accounting for the REIT Performance Fee and BT
Performance Fee), payable in the event that FH-BT becomes active; and
(b) a trustee fee of a maximum of 0.1% per annum of the value of the FH-BT Trust Property,
subject to a minimum fee of S$10,000 per month provided that the value of the FH-BT Trust
Property is at least S$50.0 million, payable in the event that FH-BT becomes active.
In relation to the Performance Fee, there should be no double-counting of fees. In the event that
both the Trustee-Manager and the REIT Manager are entitled to the Performance Fee, such fees
payable to both the Trustee-Manager and the REIT Manager will be apportioned based on the
respective proportionate contributions of FH-REIT and FH-BT in the Performance Fee
1
. For the
avoidance of doubt, the maximum Performance Fee payable to both the Trustee-Manager and the
REIT Manager collectively is 5.5% per annum of the aggregate Distributable Income of FHT in the
relevant financial year (calculated before accounting for the Performance Fee but after accounting
for the Base Fee).
For the purposes of the unaudited Pro forma Financial Information, it is assumed that FH-BT is
dormant.
(See Management and Corporate Governance Fees Payable to the Trustee-Manager for
details of the fees payable to the Trustee-Manager, which include other fees such as the
acquisition fee and divestment fee.)
Other Expenses
Other expenses comprise operating expenses such as compliance expenses, annual listing fees,
registry fees, audit and tax advisory fees, valuation fees, stamp duty, insurance fees, commission
fees, costs associated with the preparation and distribution of reports to the holders of the Stapled
Securities, investor communication costs and other miscellaneous costs.
Finance Costs
Finance costs consist of interest expense, commitment fee, legal fees and upfront debt
establishment fees incurred in relation to the Loan Facilities. Debt-related transaction costs are
amortised over the term of the Loan Facilities.
The REIT Manager has assumed an amount of S$763 million of the Loan Facilities will be drawn
down and that the average effective interest rate for unaudited pro forma statements of total
returns for FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014 will be approximately 2.2% per
annum for term loan, including upfront debt establishment costs and 1.0% per annum for short
term revolving credit facility as determined based on the loan facilities in place as at Listing Date.
The upfront debt establishment costs incurred in relation to the initial debt facility is assumed to
be amortised over its term and has been included as part of the finance costs.
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
185
Taxes
The following taxes have been taken into account in the unaudited pro forma statements of total
return for FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014:
(i) Australia withholding tax
(ii) UK income tax
(iii) Japan corporate/withholding tax
(iv) Malaysia corporate/withholding tax
(v) Singapore corporate tax
(See Taxation for further details of the taxes mentioned above.)
Total Income for the Year
The total income for the year distributable to Stapled Securityholders is derived by adding back
the following items to the net income after tax of FH-REIT:
(a) 100.0% of the REIT Managers management fees, being the portion of management fees
paid or payable to the REIT Manager in the form of Stapled Securities at the prevailing
market price instead of cash;
(b) 100.0% of the MIT Managers management fees, being the portion of management fees paid
or payable to the MIT Manager in the form of Stapled Securities at the prevailing market price
instead of cash;
(c) REIT Trustees fees;
(d) Amortisation of debt-related transaction costs/insurance fees;
(e) stamp duty and non-capitalised listing fees; and
(f) 100.0% of fees payable to the Serviced Residences Operators in the form of Stapled
Securities (the Serviced Residences Management Fee and Trademark Licence Fee).
Comparison of FH-REITs Performance
FY2013 over FY2012
Gross Rental Income from the Properties under the Master Lease and Tenancy Agreements
Gross rental income from all the properties increased by 3.9% or S$3.7 million from S$93.9 million
in FY2012 to S$97.6 million in FY2013.
(See Analysis of the Performance of the Properties from FY2012 to FY2013 for further details
on the factors contributing to the improvement in performance of the Properties.)
Property Expenses
Property expenses increased by 1.8% or S$0.3 million to S$17.3 million in FY2013 from S$17.0
million in FY2012.
186
Net Property Income
Net property income increased by 4.4% or S$3.4 million to S$80.3 million in FY2013 from S$76.9
million in FY2012.
REIT Managers Management Fees
The management fees of the REIT Manager amounted to S$7.1 million in FY2013 and remained
substantially unchanged from FY2012 to FY2013.
Other Management Fees
Other management fees amounted to S$1.6 million in FY2013 and remained substantially
unchanged from FY2012 to FY2013.
Trustees Fees
The Trustees fees amounted to S$0.5 million and remained substantially unchanged from FY2012
to FY2013 as the underlying value of the FH-REIT Deposited Property remained substantially
unchanged.
Other Expenses
Other expenses amounted to S$2.2 million in FY2013 and remained substantially unchanged from
FY2012 to FY2013. Other expenses relate mainly to audit, accounting, tax and secretary fees.
Finance Costs
Finance costs decreased by 3.1% or S$0.5 million from S$16.0 million in FY2012 to S$15.5 million
in FY2013.
Taxation
Taxation increased by 27.8% or S$0.5 million to S$2.3 million in FY2013 from S$1.8 million in
FY2012.
Net Income after Tax
As a result of the above factors, net income after tax increased by S$3.5 million.
FY2012 over FY2011
Gross Rental Income from the Properties under the Master Lease and Tenancy Agreements
Gross rental income from all the properties increased by 10.7% or S$9.1 million from S$84.8
million in FY2011 to S$93.9 million in FY2012.
(See Analysis of the Performance of the Properties from FY2011 to FY2012 for further details
on the factors contributing to the improvement in performance of the Properties.)
Property Expenses
Property expenses increased by 6.3% or S$1.0 million to S$17.0 million in FY2012 from S$16.0
million in FY2011.
187
Net Property Income
Net property income increased by 11.8% or S$8.1 million to S$76.9 million in FY2012 from S$68.8
million in FY2011.
REIT Managers Management Fees
The management fees of the REIT Manager increased by 7.7% or S$0.5 million to S$7.0 million
in FY2012 from S$6.5 million in FY2011, in line with the increase in Net Property Income in
FY2012.
Other Management Fees
Other management fees amounted to S$1.7 million in FY2012 and remained substantially
unchanged from FY2011 to FY2012.
Trustees Fees
The Trustees fees amounted to S$0.5 million and remained substantially unchanged from FY2011
to FY2012 as the underlying value of the FH-REIT Deposited Property remained substantially
unchanged.
Other Expenses
Other expenses decreased by 92.7% or S$29.3 million to S$2.3 million in FY2012 from S$31.6
million in FY2011. This is mainly due to stamp duty and non-capitalised listing fees, being
one-time costs written off in FY2011.
Finance Costs
Finance costs in FY2012 amounted to S$16.0 million and remained substantially unchanged from
FY2011 to FY2012.
Taxation
Taxation decreased by 40.0% or S$1.2 million to S$1.8 million in FY2012 from S$3.0 million in
FY2011. The decrease is mainly due to the higher tax expense incurred in relation to Japan
property in FY2011.
Net Income after Tax
As a result of the above factors, net income after tax increased by S$38.3 million.
Q1 FY2014 over Q1 FY2013
Gross Rental Income from the Properties under the Master Lease and Tenancy Agreements
Gross rental income from all the properties increased by 0.8% or S$0.2 million from S$25.8 million
in Q1 FY2013 to S$26.0 million in Q1 FY2014.
(See Analysis of the Performance of the Properties from Q1 FY2013 to Q1 FY2014 for further
details on the factors contributing to the improvement in performance of the Properties.)
188
Property Expenses
Property fees amounted to S$4.4 million in Q1 FY2014 and remained substantially unchanged
from Q1 FY2013 to Q1 FY2014.
Net Property Income
Net property income increased by 0.9% or S$0.2 million from S$21.5 million in Q1 FY2013 to
S$21.7 million in Q1 FY2014.
REIT Managers Management Fees
The management fees of the REIT Manager amounted to S$1.8 million in Q1 FY2014 and
remained substantially unchanged from Q1 FY2013 to Q1 FY2014.
Other Management Fees
Other management fees amounted to S$0.4 million in Q1 FY2014 and remained substantially
unchanged from Q1 FY2013 to Q1 FY2014.
Trustees Fees
The Trustees fees amounted to S$0.1 million and remained substantially unchanged from Q1
FY2013 to Q1 FY2014 as the underlying value of the FH-REIT Deposited Property remained
substantially unchanged.
Other Expenses
Other expenses amounted to S$0.5 million in Q1 FY2014 and remained substantially unchanged
from Q1 FY2013 to Q1 FY2014. Other expenses relate mainly to audit, accounting, tax and
secretary fees.
Finance Costs
The finance costs decreased by 7.3% or S$0.3 million from S$4.1 million in Q1 FY2013 to S$3.8
million in Q1 FY2014.
Taxation
Taxation amounted to S$0.8 million in Q1 FY2014 and remained substantially unchanged from Q1
FY2013 to Q1 FY2014.
Net Income after Tax
As a result of the above factors, net income after tax increased by S$0.3 million.
Analysis of the Performance of the Properties
FH-REITs performance is significantly affected by the performance of the underlying hotel
operations and serviced residences operations, which in turn is affected by various factors,
including changes in revenue mix and occupancy levels. The performance of the Properties for
FY2011, FY2012, FY2013, Q1 FY2013 and, Q1 FY2014 is discussed in more detail below.
189
Gross Operating Revenue and Gross Operating Profit Trends of the Properties
The Gross Operating Revenue and gross operating profit, comprising Gross Operating Revenue
less operating expenses (Gross Operating Profit), of the Hotels and the Serviced Residences
for FY2011, FY2012, FY2013, Q1 FY2013 and, Q1 FY2014 are set out below:
FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
GOR GOP GOR GOP GOR GOP GOR GOP GOR GOP
(S$000) (S$000) (S$000) (S$000) (S$000) (S$000) (S$000) (S$000) (S$000) (S$000)
Hotels 218,855 69,415 243,328 82,111 223,093 77,805 64,115 21,814 61,390 21,772
Serviced
Residences 55,390 30,636 57,509 29,011 63,302 34,890 14,870 8,275 17,013 9,126
Total 274,245 100,051 300,837 111,122 286,395 112,695 78,985 30,089 78,403 30,898
A breakdown of the Gross Operating Revenue and Gross Operating Profit of each Property in
FY2011 is set out below:
Hotels
(S$000)
Inter-
Continental
Singapore
Novotel
Rockford
Darling
Harbour
Park
International
London
and Best
Western
Cromwell
ANA
Crowne
Plaza
Kobe
The
Westin
Kuala
Lumpur Total
Gross Operating Revenue
(1)
60,375 20,090 5,472 97,477 35,441 218,855
Operating Expenses
(2)
(36,642) (11,529) (4,511) (74,348) (22,410) (149,440)
Gross Operating Profit 23,733 8,561 961 23,129 13,031 69,415
Gross Operating Profit Margin (%) 39.3 42.6 17.6 23.7 36.8 31.7
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Hotel is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue.
(2) These comprise cost of sales, staff costs, utilities, and other expenses.
Serviced Residences
(S$000)
Fraser
Suites
Singapore
Fraser
Suites
Sydney
Fraser
Place
Canary
Wharf
Fraser
Suites
Queens
Gate
(3)
Fraser
Suites
Glasgow
Fraser
Suites
Edinburgh Total
Gross Operating Revenue
(1)
21,254 19,740 6,219 3,577 4,600 55,390
Operating Expenses
(2)
(8,546) (9,377) (1,927) (2,165) (2,739) (24,754)
Gross Operating Profit 12,708 10,363 4,292 1,412 1,861 30,636
Gross Operating Profit Margin (%) 59.8 52.5 69.0 39.5 40.5 55.3
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Serviced Residences is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental
Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
(3) Fraser Suites Queens Gate was acquired on 8 December 2011.
190
A breakdown of the Gross Operating Revenue and Gross Operating Profit of each Property in
FY2012 is set out below:
Hotels
(S$000)
Inter-
Continental
Singapore
Novotel
Rockford
Darling
Harbour
Park
International
London
and Best
Western
Cromwell
ANA
Crowne
Plaza
Kobe
The
Westin
Kuala
Lumpur Total
Gross Operating Revenue
(1)
69,095 20,605 13,915 101,259 38,454 243,328
Operating Expenses
(2)
(41,571) (12,018) (7,298) (76,786) (23,544) (161,217)
Gross Operating Profit 27,524 8,587 6,617 24,473 14,910 82,111
Gross Operating Profit Margin (%) 39.8 41.7 47.6 24.2 38.8 33.7
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Hotel is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
Serviced Residences
(S$000)
Fraser
Suites
Singapore
Fraser
Suites
Sydney
Fraser
Place
Canary
Wharf
Fraser
Suites
Queens
Gate
(3)
Fraser
Suites
Glasgow
Fraser
Suites
Edinburgh Total
Gross Operating Revenue
(1)
15,874 20,174 6,446 6,958 3,352 4,705 57,509
Operating Expenses
(2)
(9,039) (9,605) (2,177) (2,298) (2,145) (3,234) (28,498)
Gross Operating Profit 6,835 10,569 4,269 4,660 1,207 1,471 29,011
Gross Operating Profit Margin (%) 43.1 52.4 66.2 67.0 36.0 31.3 50.4
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Serviced Residences is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental
Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
(3) Fraser Suites Queens Gate was acquired on 8 December 2011.
191
A breakdown of the Gross Operating Revenue and Gross Operating Profit of each Property in
FY2013 is set out below:
Hotels
(S$000)
Inter-
Continental
Singapore
Novotel
Rockford
Darling
Harbour
Park
International
London
and Best
Western
Cromwell
ANA
Crowne
Plaza
Kobe
The
Westin
Kuala
Lumpur Total
Gross Operating Revenue
(1)
66,603 21,041 14,336 82,833 38,280 223,093
Operating Expenses
(2)
(40,173) (11,695) (7,190) (62,661) (23,569) (145,288)
Gross Operating Profit 26,430 9,346 7,146 20,172 14,711 77,805
Gross Operating Profit Margin (%) 39.7 44.4 49.8 24.4 38.4 34.9
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Hotel is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
Serviced Residences
(S$000)
Fraser
Suites
Singapore
Fraser
Suites
Sydney
Fraser
Place
Canary
Wharf
Fraser
Suites
Queens
Gate
(3)
Fraser
Suites
Glasgow
Fraser
Suites
Edinburgh Total
Gross Operating Revenue
(1)
25,176 20,390 8,132 1,241 3,417 4,946 63,302
Operating Expenses
(2)
(9,468) (9,848) (2,774) (1,080) (2,273) (2,969) (28,412)
Gross Operating Profit 15,708 10,542 5,358 161 1,144 1,977 34,890
Gross Operating Profit Margin (%) 62.4 51.7 65.9 13.0 33.5 40.0 55.1
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Serviced Residences is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental
Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
(3) Fraser Suites Queens Gate was acquired on 8 December 2011.
192
A breakdown of the Gross Operating Revenue and Gross Operating Profit of each Property in Q1
FY2013 is set out below:
Hotels
(S$000)
Inter-
Continental
Singapore
Novotel
Rockford
Darling
Harbour
Park
International
London
and Best
Western
Cromwell
ANA
Crowne
Plaza
Kobe
The
Westin
Kuala
Lumpur Total
Gross Operating Revenue
(1)
17,486 5,639 3,533 27,295 10,162 64,115
Operating Expenses
(2)
(10,399) (3,260) (1,832) (20,424) (6,386) (42,301)
Gross Operating Profit 7,087 2,379 1,701 6,871 3,776 21,814
Gross Operating Profit Margin (%) 40.5 42.2 48.1 25.2 37.2 34.0
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Hotel is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
Serviced Residences
(S$000)
Fraser
Suites
Singapore
Fraser
Suites
Sydney
Fraser
Place
Canary
Wharf
Fraser
Suites
Queens
Gate
(3)
Fraser
Suites
Glasgow
Fraser
Suites
Edinburgh Total
Gross Operating Revenue
(1)
5,662 5,166 1,910 412 662 1,058 14,870
Operating Expenses
(2)
(1,944) (2,431) (623) (320) (527) (750) (6,595)
Gross Operating Profit 3,718 2,735 1,287 92 135 308 8,275
Gross Operating Profit Margin (%) 65.7 52.9 67.4 22.3 20.4 29.1 55.6
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Serviced Residences is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental
Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
(3) Fraser Suites Queens Gate was acquired on 8 December 2011.
193
A breakdown of the Gross Operating Revenue and Gross Operating Profit of each Property in Q1
FY2014 is set out below:
Hotels
(S$000)
Inter-
Continental
Singapore
Novotel
Rockford
Darling
Harbour
Park
International
London
and Best
Western
Cromwell
ANA
Crowne
Plaza
Kobe
The
Westin
Kuala
Lumpur Total
Gross Operating Revenue
(1)
19,287 5,533 4,059 22,474 10,037 61,390
Operating Expenses
(2)
(12,109) (2,900) (2,110) (16,698) (5,801) (39,618)
Gross Operating Profit 7,178 2,633 1,949 5,776 4,236 21,772
Gross Operating Profit Margin (%) 37.2 47.6 48.0 25.7 42.2 35.5
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Hotel is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
Serviced Residences
(S$000)
Fraser
Suites
Singapore
Fraser
Suites
Sydney
Fraser
Place
Canary
Wharf
Fraser
Suites
Queens
Gate
(3)
Fraser
Suites
Glasgow
Fraser
Suites
Edinburgh Total
Gross Operating Revenue
(1)
5,093 5,375 1,851 2,424 1,066 1,204 17,013
Operating Expenses
(2)
(2,228) (2,614) (733) (916) (626) (770) (7,887)
Gross Operating Profit 2,865 2,761 1,118 1,508 440 434 9,126
Gross Operating Profit Margin (%) 56.3 51.4 60.4 62.2 41.3 36.0 53.6
Notes:
(1) See Revenue Mix of the Properties for an analysis of the revenue mix of each Property. The RevPAR of each
Serviced Residences is listed in Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental
Revenue.
(2) These comprise cost of sales, staff costs, shared services costs, utilities, and other expenses.
(3) Fraser Suites Queens Gate was acquired on 8 December 2011.
194
Revenue Mix of the Properties
Hotels
The following table sets out the composition of the Gross Operating Revenue of the Hotels during
FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014:
FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
(S$000) % (S$000) % (S$000) % (S$000) % (S$000) %
Room revenue 105,882 48.4 120,928 49.7 116,294 52.1 30,680 47.8 30,926 50.4
F&B revenue 93,986 42.9 102,620 42.2 89,849 40.3 28,835 45.0 26,204 42.7
Other Income 18,987 8.7 19,780 8.1 16,950 7.6 4,600 7.2 4,260 6.9
Total 218,855 100.0 243,328 100.0 223,093 100.0 64,115 100.0 61,390 100.0
The major contributors to the Gross Operating Revenue of the Hotels are room and F&B revenue.
F&B Revenue comprises revenue from the restaurants, lounges and bars, including revenue from
catering services, banqueting sales, room service and room mini-bar sales, wedding dinners,
corporate meetings and other corporate events.
Other income includes income from provision of telecommunication services, internet broadband
services, laundry services, operation of car parks, spa and health clubs and the usage of business
centres.
Serviced Residences
The following table sets out the composition of the Gross Operating Revenue of the Serviced
Residences during FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014:
FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
(S$000) % (S$000) % (S$000) % (S$000) % (S$000) %
Room Revenue 52,202 94.2 54,489 94.7 60,324 95.3 14,137 95.1 16,215 95.3
Other Income 3,188 5.8 3,020 5.3 2,978 4.7 733 4.9 798 4.7
Total 55,390 100.0 57,509 100.0 63,302 100.0 14,870 100.0 17,013 100.0
Rental revenue generally contributes around 95% of the Serviced Residences Gross Operating
Revenue.
Other income refers mainly to income from the provision of F&B services, usage of the business
centres and laundry services, income from the provision of telecommunication services, internet
broadband services, the operation of the car park, rental income from concessionaires (where
applicable) and hiring of furniture and equipment by guests in addition to standard provisions.
195
Key Drivers of Hotel Room Revenue and Serviced Residence Unit Rental Revenue
The RevPAR of the individual Hotels for FY2011, FY2012, FY2013, Q1 FY2013 and Q1 FY2014
are set out below:
Hotel Currency
RevPAR
FY2011 FY2012 FY2013
Q1
FY2013
Q1
FY2014
InterContinental
Singapore SGD 241 272 263 261 274
Novotel Rockford Darling
Harbour AUD 133 137 147 151 164
Park International
London
(1)
GBP 38 67 70 66 75
Best Western Cromwell
London GBP 68 69 69 67 73
ANA Crowne Plaza Kobe JPY 8,686 8,589 8,865 9,676 10,262
The Westin Kuala
Lumpur MYR 322 356 374 364 397
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
The RevPAR of the respective Serviced Residences for FY2011, FY2012, FY2013, Q1 FY2013
and Q1 FY2014 are further set out below:
Serviced Residence Currency
RevPAR
FY2011 FY2012 FY2013
Q1
FY2013
Q1
FY2014
Fraser Suites
Singapore
(1)
SGD 228 168 267 238 214
Fraser Suites Sydney AUD 184 188 201 197 224
Fraser Place Canary
Wharf
(2)
GBP 134 125 118 108 121
Fraser Suites Queens
Gate
(3)
GBP
(4)
108 17 21 129
Fraser Suites Glasgow
(5)
GBP 48 45 52 50 57
Fraser Suites Edinburgh GBP 75 77 87 73 80
Notes:
(1) Fraser Suites Singapore was partially closed in FY2012 for renovation.
(2) Fraser Place Canary Wharf was partially closed in FY2012 for renovation.
(3) Fraser Suites Queens Gate was closed in FY2013 for renovation.
(4) Fraser Suites Queens Gate was acquired in December 2011 and accordingly, there are no comparative results of
its operations for FY2011.
(5) Fraser Suites Glasgow was partially closed from August 2012 to March 2013 for renovation.
196
General Commentary on the Performance of the Properties
FY2012 over FY2011
The improved macroeconomic conditions in 2012 had led to a generally cautious but optimistic
mood among corporate clients, leading to a general improvement in the hospitality sector,
improving performances of both the Hotels and Serviced Residences.
Hotels
Gross Operating Revenue for the Hotels increased by 11.0% from SGD 219 million in FY2011 to
SGD 243 million in FY2012, while Gross Operating Profits for the Hotels increased by 18.8% from
SGD 69 million in FY2011 to SGD 82 million in FY2012.
One of the key drivers for the Hotels growth was the strong performance of InterContinental
Singapore, where renovation of 65 Shop House Rooms and Suites were completed in FY2011. In
addition, revenue growth of InterContinental Singapore can also be attributed to an increase in
visitor arrivals and spending in Singapore, driven in part by strong tourism performance due to
major tourist attractions such as the Singapore Air-show. As a result, the ADR increased 3.8%
from SGD 293 in FY2011 to SGD 304 in FY2012, as well as an increase in occupancy from 82%
in FY2011 to 90% in FY2012. Correspondingly, the RevPAR increased 12.9% from SGD 241 to
SGD 272 from FY2011 to FY2012.
Another major driver for the Hotels growth comes from Park International London Hotel. Park
International London Hotel underwent a major refurbishment in FY2011 to FY2012 to connect all
of its seven townhouses and was renamed Park International London. The 2012 London Olympics
also provided a tourism boost to the London hospitality industry. These have resulted in an
increase in ADR from GBP 88 in FY2011 to GBP 113 in FY2012, and an increase in occupancy
rate from 43% in FY2011 to 59% in FY2012. Correspondingly, the RevPAR increased 76.3% from
GBP 38 in FY2011 to GBP 67 in FY2012.
Serviced Residences
Gross Operating Revenue for the Serviced Residences increased by 5.5% from SGD 55 million
from FY2011 to SGD 58 million in FY2012, while Gross Operating Profits for the Serviced
Residences decreased by 6.5% from SGD 31 million in FY2011 to SGD 29 million in FY2012.
The acquisition of Fraser Suites Queens Gate boosted the Gross Operating Revenue for FY2012,
which has benefited from the full year contribution of this property.
However, these were offset by major asset enhancement initiatives carried out on Fraser Suites
Singapore and Fraser Place Canary Wharf, which contributed to the decrease in Gross Operating
Profits of the Serviced Residences. These properties underwent major renovation works which
involved renovation and reconfiguration of apartments and public areas, leading to overall
decrease in the RevPAR of the Serviced Residences.
FY2013 over FY2012
In FY2013, despite a generally cautious environment and a slight slowdown in the general
economy, the Properties have maintained or improved in performance. This was largely driven by
the benefits arising from the completion of asset enhancement initiatives relating to the Serviced
Residences.
197
Hotels
Gross Operating Revenue for the Hotels decreased by 8.2% from SGD 243 million in FY2012 to
SGD 223 million in FY2013, while Gross Operating Profits for the Hotels decreased by 4.9% from
SGD 82 million in FY2012 to SGD 78 million in FY2013. This can be primarily attributed to
macroeconomic uncertainties in Singapore, Australia and Japan.
In Singapore, an overall increase in the supply of hotel rooms as well as a general decline in
corporate travel budgets negatively affected both ADR and occupancy rates. As a result,
InterContinental Singapore saw a decrease in RevPAR from SGD 272 in FY2012 to SGD 263 in
FY2013.
For the Crowne Plaza ANA Kobe hotel, improvements in ADR resulted in increase in RevPAR from
JPY 8,589 in FY2012 to JPY 8,865 in FY2013. However, this was offset by the declining business
in the F&B Business coupled with the depreciation of the Japanese Yen against the Singapore
Dollar. As a result, Gross Operating Profit of Crowne Plaza ANA Kobe hotel decreased from JPY
1,525 million in FY2012 to JPY 1,503 million in FY2013.
Serviced Residences
Gross Operating Revenue for the Serviced Residences increased by 8.6% from S$58 million in
FY2012 to S$63 million in FY2013, while Gross Operating Profits increased by 20.7% from S$29
million in FY2012 to S$35 million in FY2013. This can be primarily attributed to the benefits arising
from the completion of asset enhancement initiatives relating to the various Serviced Residences.
Post completion of major assets enhancement initiatives in Fraser Suites Singapore, and Fraser
Place Canary Wharf, where the collective Gross Operating Revenue of these properties improved
by 50.0% from S$22 million in FY2012 to S$33 million in FY2013.
The increases in Gross Operating Revenue were partially offset by the temporary closure of
Fraser Suites Queens Gate for more than 10 months in FY2013 for extensive renovations and to
rebrand the property from Fraser Place to Fraser Suites, which resulted in a substantial decline
in Gross Operating Revenue for this property.
In line with subdued but recovering economic growth, the rest of the Serviced Residences
(excluding Fraser Suites Queens Gate, Fraser Suites Singapore, and Fraser Place Canary Wharf)
continued to experience marginal revenue growth in FY2013. Excluding these properties, the
other three Serviced Residences recorded a 1.8% increase in Gross Operating Revenue to S$29
million in FY2013 and a 3.1% increase in Gross Operating Profit to S$14 million in FY2013.
Q1 FY2014 over Q1 FY2013
In spite of the volatile macroeconomic outlook for 2014 which had led to a generally cautious mood
among corporate clients, the completion of asset enhancement initiative has helped to stabilise
the overall performance of the properties, resulting in a relatively resilient performance for both
the Hotels and the Serviced Residences.
Hotels
The Hotels recorded a 4.2% decrease in Gross Operating Revenue to S$61.4 million in Q1
FY2014 from S$64.1 million in Q1 FY2013 and Gross Operating Profit remained substantially
unchanged at S$21.8 million from Q1 FY2013 to Q1 FY2014.
198
The decrease in Gross Operating Revenue was mainly due to depreciation of Japanese Yen and
Australian Dollar against the Singapore Dollar. All hotels recorded an increase in RevPAR and
room revenue in Q1 FY2014 from Q1 FY2013.
In addition, the Gross Operating profit margin for the hotels improved to 35.5% in Q1 FY2014 from
34.0% in Q1 FY2013. This is primarily due to improved cost margins for The Westin Kuala Lumpur.
Serviced Residences
The Serviced Residences recorded a 14.1% increase in Gross Operating Revenue to S$17.0
million in Q1 FY2014 from S$14.9 million in Q1 FY2013 and a 9.6% increase in Gross Operating
Profit to S$9.1 million in Q1 FY2014 from S$8.3 million in Q1 FY2013.
Room revenue increased 14.9% to S$16.2 million in Q1 FY2014 from S$14.1 million in Q1
FY2013. This was driven mainly by business ramping up at Fraser Suites Queens Gate after the
closure for refurbishments from October 2012 to August 2013 and strong performances in Fraser
Suites Sydney and Fraser Suites Glasgow. This was slightly offset by decline in the performance
of Fraser Suites Singapore due to rebuilding of customer base in Q1 FY2014 post completion of
renovation.
INDEBTEDNESS
As at the Listing Date, FH-REIT has put in place total unsecured and secured bank facilities
(excluding the two revolving credit facilities referred to below) of approximately S$643.9 million
and approximately S$36.9 million, respectively.
The unsecured bank facilities comprise of:
Multi-currency term loan facilities (TLF) with loan maturities of three to five years:
(i) a five-year loan facility of S$500 million;
(ii) a three-year loan facility of S$115 million; and
(iii) Kobe Excellence TMK Series 1 (Kobe Excellence TMK), issued bond amounting to JPY
2.35 billion (equivalent to approximately S$28.9 million, with a maturity of five years.
A medium term note (MTN) Senior Bond of MYR95 million (equivalent to S$36.9 million) with
a maturity of five years is secured by the property, The Westin Kuala Lumpur.
There are two revolving credit facilities (RCF), comprising a five-year secured revolving credit
facility of MYR4.0 million (equivalent to approximately S$1.6 million) in Malaysia and an
unsecured short term revolving credit facility of S$50 million in Singapore.
Based on Unaudited Pro Forma Balance Sheet as at 31 December 2013, FH-REIT has drawn
down approximately S$605 million of the TLF, S$50 million of the RCF, JPY 2.35 billion (equivalent
to approximately S$28 million) of Kobe Excellence TMK bond and MYR95 million (equivalent to
approximately S$37 million) of Senior MTNs, with an Aggregate Leverage of approximately 41.3%
of the FH-REIT Deposited Property. (See Capitalisation and Indebtedness Indebtedness
Aggregate Leverage for details of the debt maturity profile.)
The Property Funds Appendix allows FH-REIT to borrow up to 35.0% of the FH-REIT Deposited
Property without a credit rating and up to a maximum of 60.0% of the value of the FH-REIT
Deposited Property if a credit rating from acceptable rating agency is obtained and disclosed to
the public. FH-REIT will be engaging acceptable rating agency for a credit rating to be issued.
199
The REIT Manager intends to employ an appropriate mix of debt and equity in financing
acquisitions of properties and property enhancements. The REIT Manager will also utilise interest
rate hedging strategies, where appropriate, in order to reduce exposure to market volatility.
(See Strategy FH-REITs Strategy Capital and Risk Management Strategy for further details.)
Liquidity and Capital Resources
The REIT Manager will endeavour to maintain a strong balance sheet, employ an appropriate mix
of debt and equity in financing acquisitions of properties, secure diversified funding sources to
access both financial institutions and capital markets, optimise its cost of debt financing and utilise
interest rate and foreign exchange hedging strategies, where appropriate, in order to minimise
exposure to market volatility. In the event that FH-REIT incurs any future borrowings, the REIT
Manager will periodically review FH-REITs capital management policy with respect to its
Aggregate Leverage and modify its strategy in the light of prevailing market conditions.
Accounting Policies
For a discussion of the principal accounting policies of FH-REIT, FH-BT and FHT, see Appendix
C, Unaudited Pro Forma Financial Information for further details.
200
PROFIT FORECAST AND PROFIT PROJECTION
FH-BT will not make distributions for the period in which it is dormant. Therefore distributions by
FHT, when FH-BT is dormant, will comprise distributions by FH-REIT solely.
Statements contained in the Profit Forecast and Profit Projection section that are not historical
facts may be forward-looking statements. Such statements are based on the assumptions set out
in this section of this Prospectus and are subject to certain risks and uncertainties which could
cause actual results to differ materially from those forecast and projected. Under no
circumstances should the inclusion of such information herein be regarded as a representation,
warranty or prediction with respect to the accuracy of the underlying assumptions by any of FHT,
FH-REIT, FH-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the
Global Coordinator, the Joint Bookrunners or any other person, or that these results will be
achieved or are likely to be achieved (see Forward-looking Statements and Risk Factors).
Prospective investors in the Stapled Securities are cautioned not to place any undue reliance on
these forward-looking statements that are valid only as at the date of this Prospectus.
None of FHT, FH-REIT, FH-BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the
Sponsor, the Global Coordinator or the Joint Bookrunners guarantees the performance of
FHT, FH-REIT and FH-BT, the repayment of capital or the payment of any distributions, or
any particular return on the Stapled Securities.
The following tables show the forecast and projected statements of total return for
Forecast Period 2014 (from 1 April 2014 to 30 September 2014) and Projection Year 2015
(from 1 October 2014 to 30 September 2015) of FH-REIT. The forecast and projected yields
stated in the following tables are calculated based on:
the Offering Price of $0.88; and
the forecast and projected statements of total returns for the Forecast Period 2014 and
Projection Year 2015 of FH-REIT.
Such yields will vary accordingly to the extent that the Listing Date is later than 1 April
2014, or for investors who purchase the Stapled Securities in the secondary market at a
market price that differs from the Offering Price.
The financial year-end of FH-REIT is 30 September. The Profit Forecast and Profit Projection may
be different to the extent that the actual date of issuance of the Stapled Securities is later than
1 April 2014. The Profit Forecast and Profit Projection are based on the assumptions set out in
Profit Forecast and Profit Projection and have been examined by the Independent Reporting
Auditor and should be read together with the report set out in Appendix A, Independent Reporting
Auditors Report on the Profit Forecast and Profit Projection, as well as the assumptions and the
sensitivity analysis set out in this section of the Prospectus.
While profit forecasts have been prepared for Forecast Period 2014, being the period commencing
from 1 April 2014 and ending 30 September 2014, it should be noted that due to the seasonal
nature of the hospitality business, the financial performance of hospitality entities and properties
is generally better in the second half of the financial year as compared to the first half of the
financial year. Hence, comparisons between the annualised financial performance of the
hospitality entities and properties from Forecast Period 2014 and Projection Year 2015 are
unlikely to provide accurate reflections of the expected changes in financial performance from
2014 to 2015.
201
Forecast and Projected Statements of Total Return of FH-REIT
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
(S$000) (S$000)
Gross revenue 51,557 103,039
Property operating expenses (10,021) (19,953)
Net property income 41,536 83,086
REIT Managers management fees (3,995) (7,974)
Other management fees
(1)
(772) (1,553)
Trustees fees (227) (445)
Other expenses
(2)
(30,241)
(3)
(2,215)
Payment top-up
(4)
2,800
(5)
6,900
Interest and other income 27 92
Finance costs
(6)
(7,756) (14,980)
Total return before tax and distribution 1,372 62,911
Taxation (2,996) (5,776)
Total (loss)/return after tax and before
distribution adjustments (1,624) 57,135
Non-tax deductible items and other
adjustments
(7)
38,120 17,689
Income available for distribution to
holders of Stapled Securities 36,496 74,824
Notes:
(1) Other management fees comprise MIT Manager fees, Kobe Asset Manager fees and ABS Servicer fees.
(2) Other expenses comprise operating expenses such as compliance expenses, annual listing fees, registry fees, audit
and tax advisory fees, valuation fees, insurance fees, commission fees, costs associated with the preparation and
distribution of reports to the holders of the Stapled Securities, investor communication costs and other
miscellaneous costs.
(3) In Forecast Period 2014, in addition to the expenses referred to in (2) above, it includes stamp duty in relation to
the acquisition of United Kingdom and Australia properties and non-capitalised listing fees.
(4) BCH Hotel Investment Pte Ltd, the vendor of InterContinental Singapore and River Valley Apartments Pte Ltd, one
of the vendors of Fraser Suites Singapore, will provide Payment Top-Up to FHT for the period from the Listing Date
to 30 November 2015. No amortisation is applied to the Payment Top-Up as the Payment Top-Up is expected to be
received in each of the relevant periods in Forecast Period 2014 and Projection Year 2015.
(5) Although the maximum amounts that FH-REIT can receive in respect of the first payment period from the Listing
Date up to 30 September 2014 (assuming the respective Properties are not sold) under the two Top-Up Deeds is
S$2.5 million, S$2.8 million is assumed to be received by FH-REIT under the Top-Up Deeds as the Forecast Period
2014 (being from 1 April 2014 to 30 September 2014) is for a longer period as compared to the period from the actual
Listing Date to 30 September 2014 covered by the Top-Up Deeds. Accordingly, the additional S$0.3 million
represents the amount of cashflows in respect of InterContinental Singapore and Fraser Suites Singapore that
would have been affected from 1 April 2014 to the Listing Date.
(6) Finance costs comprise interest expense and amortisation of debt-related transaction costs.
(7) Non-tax deductible items and other adjustments comprise the REIT Managers management fees paid/payable in
Stapled Securities, the MIT Managers management fees paid/payable in Stapled Securities, REIT Trustees fees,
amortisation of upfront debt-related transaction costs/insurance fee, serviced residences management fees and
trademark licence fees which are paid/payable in Stapled Securities, stamp duty and non-capitalised listing fees.
202
FH-REIT Forecast and Projected Statements of Distribution
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Total number of issued and issuable Stapled
Securities at end of period/year (000) 1,201,759 1,215,085
Distribution per Stapled Security (cents) 3.04 6.16
Distribution per Stapled Security (without
Payment Top-Up) (cents) 2.86 5.72
Offering Price (S$) 0.88 0.88
Distribution yield (%) 6.90
(1)
7.00
Distribution yield (without Payment
Top-Up) (%) 6.50
(1)
6.51
Note:
(1) Annualised by extrapolating the Forecast Period 2014 figures for a full financial year.
Gross Revenue and Net Property Income Contribution of Individual Property
The forecast and projected contribution of the Properties to Gross Revenue is as follows:
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
(S$000) % (S$000) %
Hotels
InterContinental Singapore 9,501 18.4 19,262 18.7
Novotel Rockford Darling Harbour 2,739 5.3 5,772 5.6
Park International London
(1)
3,323 6.4 5,738 5.6
Best Western Cromwell London
(1)
1,471 2.9 2,540 2.5
ANA Crowne Plaza Kobe 6,797 13.2 14,815 14.4
The Westin Kuala Lumpur 5,404 10.5 11,066 10.7
Sub-Total 29,235 56.7 59,193 57.5
Serviced Residences
Fraser Suites Singapore 7,432 14.4 15,843 15.3
Fraser Suites Sydney 4,716 9.2 9,570 9.3
Fraser Place Canary Wharf 3,052 5.9 6,138 6.0
Fraser Suites Queens Gate
(1)
4,387 8.5 8,098 7.8
Fraser Suites Glasgow
(1)
1,347 2.6 2,032 2.0
Fraser Suites Edinburgh
(1)
1,388 2.7 2,165 2.1
Sub-Total 22,322 43.3 43,846 42.5
Total 51,557 100.0 103,039 100.0
203
Gross Revenue of Geographical segments
The forecast and projected contribution of the geographical segments to Gross Revenue is as
follows:
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Singapore 16,933 32.8 35,105 34.0
Australia 7,455 14.5 15,342 14.9
The United Kingdom
(1)
14,968 29.0 26,711 26.0
Japan 6,797 13.2 14,815 14.4
Malaysia 5,404 10.5 11,066 10.7
51,557 100.0 103,039 100.0
The forecast and projected contribution of the Properties to Net Property Income is as follows:
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
(S$000) % (S$000) %
Hotels
InterContinental Singapore 8,341 20.1 16,943 20.4
Novotel Rockford Darling Harbour 2,074 5.0 4,453 5.4
Park International London
(1)
2,964 7.1 5,024 6.0
Best Western Cromwell London
(1)
1,282 3.1 2,165 2.6
ANA Crowne Plaza Kobe 5,491 13.2 12,167 14.6
The Westin Kuala Lumpur 5,093 12.3 10,458 12.6
Sub-Total 25,245 60.8 51,210 61.6
Serviced Residences
Fraser Suites Singapore 5,580 13.4 12,005 14.5
Fraser Suites Sydney 3,339 8.0 6,809 8.2
Fraser Place Canary Wharf 2,136 5.1 4,228 5.1
Fraser Suites Queens Gate
(1)
3,349 8.1 6,042 7.3
Fraser Suites Glasgow
(1)
984 2.4 1,430 1.7
Fraser Suites Edinburgh
(1)
903 2.2 1,362 1.6
Sub-Total 16,291 39.2 31,876 38.4
Total 41,536 100.0 83,086 100.0
Note:
(1) Annualised Gross Revenue and Net Property Income for Forecast Period 2014 are comparatively higher than
Projection Year 2015 mainly due to seasonality impact.
204
ASSUMPTIONS
The REIT Manager has prepared the profit forecasts of FH-REIT for Forecast Period 2014 and the
profit projections for Projection Year 2015 based on the Offering Price and the assumptions listed
below. The REIT Manager considers these assumptions to be appropriate and reasonable as at
the date of this Prospectus. However, investors should consider these assumptions as well as the
profit forecasts and profit projections and make their own assessment of the future performance
of FH-REIT.
Gross Revenue
Gross Revenue comprises gross rental income under the Master Lease and Tenancy Agreements.
Gross rental income under the terms of the Master Lease and Tenancy Agreements comprises a
Fixed Rent and a Variable Rent, as set out in the table below:
Hotel Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of
Gross Operating Revenue and
Percentage of Gross Operating
Profit less Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
InterContinental Singapore SGD 8,000 0.0 76.0
Novotel Rockford Darling Harbour AUD 2,500 0.0 84.0
Park International London GBP 1,300 0.0 91.5
Best Western Cromwell London GBP 600 0.0 91.5
ANA Crowne Plaza Kobe JPY 600,000 0.0 77.8
The Westin Kuala Lumpur MYR 14,800 0.0 78.5
Serviced Residence Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of Gross
Operating Revenue and Percentage
of Gross Operating Profit less
Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
Fraser Suites Singapore SGD 7,700 20.0 59.0
Fraser Suites Sydney AUD 4,200 20.0 54.5
Fraser Place Canary Wharf GBP 1,400 20.0 65.0
Fraser Suites Queens Gate GBP 1,800 20.0 67.0
Fraser Suites Glasgow GBP 400 20.0 50.0
Fraser Suites Edinburgh GBP 500 20.0 45.0
Note:
(1) May include unutilised FF&E reserve not carried forward to the following year.
Should the calculation of the Variable Rent yield a negative figure, the overall rent will then be the
Fixed Rent amount. It is assumed that the unutilised FF&E reserves that are not carried forward
to the following year are as follows:
205
Property Currency
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Hotels
InterContinental Singapore SGD 750,000 1,500,000
Serviced Residences
Fraser Suites Singapore SGD 328,557 693,582
Fraser Place Canary
Wharf GBP 54,924 110,089
Fraser Suites Queens
Gate GBP 73,294 138,383
Gross Operating Revenue and Gross Operating Profit of the Hotels
The Gross Operating Revenue and Gross Operating Profit of the Hotels are forecast and projected
based on the following assumptions.
Gross Operating Revenue of the Hotels
The Gross Operating Revenue of the Hotels consists of (i) room revenue, (ii) F&B revenue and (iii)
other income.
(i) Room revenue
The forecast and projected hotel revenue for Forecast Period 2014 and Projection Year 2015
are based on each Hotels total available rooms and RevPAR, which is in turn driven by the
ADR and the Occupancy Rate assumptions.
ADR (in local currency)
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Hotels
InterContinental Singapore SGD 300 301
Novotel Rockford Darling
Harbour AUD 163 169
Park International London GBP 107 105
Best Western Cromwell London GBP 92 90
ANA Crowne Plaza Kobe JPY 11,965 12,195
The Westin Kuala Lumpur MYR 494 506
206
Occupancy Rate
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Hotels
InterContinental Singapore 83.9% 83.2%
Novotel Rockford Darling
Harbour 76.5% 78.4%
Park International London 79.7% 73.4%
Best Western Cromwell London 88.2% 81.8%
ANA Crowne Plaza Kobe 78.8% 77.1%
The Westin Kuala Lumpur 78.6% 78.5%
RevPAR (in local currency)
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Hotels
InterContinental Singapore SGD 252 250
Novotel Rockford Darling
Harbour AUD 125 133
Park International London GBP 85 77
Best Western Cromwell London GBP 81 74
ANA Crowne Plaza Kobe JPY 9,424 9,407
The Westin Kuala Lumpur MYR 389 397
Note:
Forecast and projected Occupancy Rate and ADR are derived after taking into account the historical and current
operating performance of each of the Hotels. Other factors considered include the prospects of the respective
markets hospitality industry, the expected demand and supply of hotel rooms, the competitive position of competing
hotels, major conventions and events that are scheduled to take place, the historical and expected future
renovations or refurbishments at the Hotels, the respective location of the Hotels and the materialisation rate of the
existing and potential hotel room contracts.
(ii) F&B revenue
F&B revenue comprises revenue from the restaurants, lounges and bars, including revenue
from catering services, banqueting sale, room service and room mini-bar sales, wedding
dinners, corporate meetings and other corporate events. For Forecast Period 2014 and
Projection Year 2015, F&B revenue is expected to constitute approximately 37.9% and
39.9% of the total revenue of the Hotels respectively.
The forecast and projected F&B revenue are estimated based on the historical performance
of the F&B sales of the Hotels and taking into account the expected occupancy rates of the
Hotels, the competitive position and location of the Hotels, as well as expected bookings for
banquets, wedding dinners, corporate meetings and other corporate events.
207
(iii) Other income
Other income includes income from provision of telecommunication services, internet
broadband services, laundry services, operation of car parks, spa and health clubs and the
usage of business centres. For Forecast Period 2014 and Projection Year 2015, other
income is expected to constitute approximately 9.3% of the total revenue of the Hotels.
Operating expenses of the Hotels
The operating expenses of the Hotels include (i) payroll expenses, (ii) cost of sales, (iii) energy
and utilities as well as (iv) other expenses.
(i) Payroll expenses
Payroll expenses relate to wages, salaries and the related staff benefits in connection with
the hiring of full-time and temporary staff to carry out day-to-day operations at the Hotels
including housekeeping services, reception services, security services, F&B, administrative,
marketing, property operation and maintenance and other services.
For Forecast Period 2014 and Projection Year 2015, payroll expenses are estimated based
on the Hotels historical payroll costs and after adjusting for an expected increment in each
year. In addition, consideration has been given to staffing requirements at the Hotels by
taking into account the forecast and projected performance of the Hotels (in particular,
expected occupancy levels, expected banqueting demand and expected operating
efficiencies).
(ii) Cost of sales
Cost of sales relates to direct costs incurred in the provision of F&B services,
telecommunication services, internet broadband services and laundry services. Cost of sales
has been forecast and projected to vary in proportion to room revenue and F&B revenue for
Forecast Period 2014 and Projection Year 2015, taking into consideration cost efficiencies.
(iii) Energy and utilities
For Forecast Period 2014 and Projection Year 2015, it has been assumed that energy and
utilities costs are based on the estimated utilities costs, taking into consideration historical
rates, expected rate increments and expected utilisation.
(iv) Other expenses
Other hotel expenses include costs of guest supplies, repair and maintenance expenses,
selling and marketing expenses, hotel management fee, rental for sidewalk area and
administrative and general expenses.
Costs of guest supplies include costs of linen laundry and room consumables.
Repair and maintenance expenses relate to costs incurred for the upkeep of the Hotels,
including the cost of materials, supplies and contracts related to the general repair and
maintenance of the Hotels.
Selling and marketing expenses relate to costs incurred in marketing, advertising and
promoting the Hotels as well as commission to third parties.
208
Hotel management fee relate to base management fee and incentive fee payable to Hotel
Operators for management services rendered for the Park International London and Best
Western Cromwell.
Administrative and general expenses include credit card commissions, security services,
maintenance of IT systems and other general and administrative expenses.
Gross Operating Revenue and Gross Operating Profit of the Serviced Residences
The Gross Operating Revenue and Gross Operating Profit of the Serviced Residences are
forecast and projected based on the following assumptions.
Gross Operating Revenue of the Serviced Residences
The Gross Operating Revenue of the Serviced Residences consists of (i) rental revenue and (ii)
other income.
(i) Rental revenue
The forecast and projected rental revenue for Forecast Period 2014 and Projection Year
2015 are based on each Serviced Residences RevPAR, which in turn is driven by the ADR
and the Occupancy Rate assumptions.
ADR (in local currency)
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Serviced Residences
Fraser Suites Singapore SGD 329 335
Fraser Suites Sydney AUD 233 244
Fraser Place Canary Wharf GBP 133 138
Fraser Suites Queens Gate GBP 161 166
Fraser Suites Glasgow GBP 85 78
Fraser Suites Edinburgh GBP 117 108
Occupancy Rate
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Serviced Residences
Fraser Suites Singapore 84.5% 87.9%
Fraser Suites Sydney 87.8% 87.8%
Fraser Place Canary Wharf 87.7% 81.0%
Fraser Suites Queens Gate 91.2% 84.0%
Fraser Suites Glasgow 86.1% 77.7%
Fraser Suites Edinburgh 91.5% 83.9%
209
RevPAR (in local currency)
Forecast Period 2014
April 2014 to
September 2014
Projection Year 2015
October 2014 to
September 2015
Serviced Residences
Fraser Suites Singapore SGD 278 295
Fraser Suites Sydney AUD 205 214
Fraser Place Canary Wharf GBP 116 112
Fraser Suites Queens Gate GBP 147 140
Fraser Suites Glasgow GBP 73 61
Fraser Suites Edinburgh GBP 107 91
Forecast and projected occupancies and ADR are derived after taking into account the
historical and current operating performance of each of the Serviced Residences. Other
factors considered include the underlying forecast economic conditions in the respective
markets, the expected demand and supply of serviced residences units, the competitive
position of competing serviced residences, the historical and expected future renovations or
refurbishments at the Serviced Residences, the respective location of the Serviced
Residences and the materialisation rate of the existing and potential serviced residences
contracts.
(ii) Other income
Other income refers mainly to income from the provision of F&B services, usage of the
business centres and laundry services, income from the provision of telecommunication
services, internet broadband services, the operation of the car park, rental income from
concessionaires (where applicable) and hiring of furniture and equipment by guests in
addition to standard provisions.
Operating expenses of the Serviced Residences
The operating expenses of the Serviced Residences include (i) payroll expenses, (ii) cost of sales,
(iii) energy and utilities as well as (iv) other expenses.
(i) Payroll expenses
Payroll expenses relate to wages, salaries and the related staff benefits in connection with
the hiring of full-time and temporary staff to carry out day-to-day operations at the Serviced
Residences including reception services, property operation and maintenance and other
services.
For Forecast Period 2014 and Projection Year 2015, payroll expenses are estimated based
on the Serviced Residences historical payroll costs and after adjusting for an expected
increment in each year. In addition, consideration has been given to staffing requirements at
the Serviced Residences by taking into account the forecast and projected performance of
the Serviced Residences (in particular, expected occupancy levels and expected operating
efficiencies).
210
(ii) Cost of sales
Cost of sales includes costs incurred in the provision of F&B services telecommunication
services and laundry services. Cost of sales has been forecast and projected to vary in
proportion to rental revenue for Forecast Period 2014 and Projection Year 2015, taking into
consideration cost efficiencies.
(iii) Energy and utilities
For Forecast Period 2014 and Projection Year 2015, it has been assumed that energy and
utilities costs are based on the estimated utilities costs, taking into consideration historical
rates, expected rate increments and expected utilisation.
(iv) Other expenses
Other serviced residences expenses include costs of guest supplies, agency commission
and reservation expenses, repair and maintenance expenses, advertising and promotion
expenses, and administrative and general expenses.
Costs of guest supplies include costs incurred for airport transfers and shuttle services,
breakfast provisions, linen laundry and cable subscriptions.
Agency commission and reservation expenses include costs incurred for commission and
reservation fees paid to third parties.
Repair and maintenance expenses relate to costs incurred for the upkeep of the Serviced
Residences, including the cost of materials, as well as supplies and contracts related to the
general repair and maintenance of the Serviced Residences.
Selling and marketing expenses relate to costs incurred in marketing, advertising and
promoting the Serviced Residences.
Administrative and general expenses include credit card commission, security services,
maintenance of IT systems and other general and administrative expenses.
Property Expenses
Property expenses for FH-REIT comprise (i) property tax for hospitality properties, (ii) insurance
expenses, (iii) Management Corporation Strata Title Plan (MCST) sinking fund contribution
(Sinking Fund Contributions) in Singapore or its equivalent funds in overseas and (iv) other
property expenses.
Property Tax for Hospitality Properties
Property Tax for Hotels
For hotel properties, it has been assumed that the basis of assessment for property tax by the tax
authorities in each of the jurisdictions will remain the same as the latest year of assessment.
Property Tax for Serviced Residences
For Serviced Residences, it has been assumed that the basis of assessment for property tax by
the tax authorities in each of the jurisdictions will remain the same as the latest year of
assessment.
211
Insurance Expenses
FH-REIT incurs expenses for certain insurance coverage, including fire insurance, physical
damage and terrorism insurance for the Properties.
Common Area Maintenance Fees
Some properties form part of MCST (or the equivalent of a MCST in overseas jurisdiction) and are
required to pay their respective share value of contributions towards maintenance and other
expenses in the development to the MCST. Under the Master Lease and Tenancy Agreements,
FH-REIT will bear the common area maintenance fees which will are levied for repairs and
improvements to, and maintenance of, the common property and the renewal or replacement of
parts of the common property, fixtures, fittings and other property held by or on behalf of the MCST
and such other liabilities expected to be incurred in the future.
Serviced Residences Management Fee and Trademark Licence Fee
Serviced residences management fee comprising base management fee, marketing fee and
incentive fee is payable to the Serviced Residences Operators for management services rendered
for the Serviced Residences. A trademark licence fee is payable to the Serviced Residence
Operator for use of the relevant trademarks used in connection with the operations of the Serviced
Residences. The base management fee, marketing fee and trademark license fee is 1.0% per
annum of the gross operating revenue of the Serviced Residences respectively. The incentive fee
is 8.0% per annum of gross operating profit of the Serviced Residences.
For Forecast Period 2014 and Projection Year 2015, it has been assumed that the REIT Manager
has elected to pay 100.0% of fees payable to the Serviced Residences Operators in the form of
Stapled Securities. Where the management fees are payable in Stapled Securities, the REIT
Manager has assumed that such Stapled Securities are issued at the Offering Price.
Payment Top-Up
The vendors of InterContinental Singapore and Fraser Suites Singapore will each provide
Payment Top-Up to FHT for the period from Listing Date to 30 November 2015. Pursuant to the
terms of the payment top-up, the vendors of InterContinental Singapore and Fraser Suites
Singapore will pay to the REIT Trustee an amount equivalent to the terms of the respective
Payment Top-Up Agreement.
The aggregate payment top-up amount for InterContinental Singapore for the Forecast Period
2014 and Projection Year 2015 amounts to S$2.15 million and S$5.9 million, respectively. The
aggregate payment top-up amount for Fraser Suites Singapore for the Forecast Period 2014 and
Projection Year 2015 amounts to S$0.65 million and S$1 million, respectively.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Payment Top-Up
Deeds for further details.)
REIT Managers management fees
Pursuant to the FH-REIT Trust Deed, the REIT Manager is entitled to a management fee
comprising a Base Fee of 0.3% per annum of the value of the FH-REITs Deposited Property and
a Performance Fee of 5.5% of the aggregate Distributable Income of FHT in the relevant financial
year (calculated before accounting for the REIT Performance Fee and BT Performance Fee but
after accounting for the REIT Base Fee and the BT Base Fee).
212
There should be no double-counting of fees. In the event that both the REIT Manager and the
Trustee-Manager are entitled to the Performance Fee, such fees payable to both the REIT
Manager and the Trustee-Manager will be apportioned based on the respective proportionate
contributions of FH-REIT and FH-BT in the Performance Fee
1
. For the avoidance of doubt, the
maximum Performance Fee payable to both the REIT Manager and the Trustee-Manager
collectively is 5.5% per annum of the aggregate Distributable Income of FHT in the relevant
financial year (calculated before accounting for the Performance Fee but after accounting for the
Base Fee).
The REIT Managers management fee shall be reduced by other asset management related fee
paid by FH-REIT and its subsidiaries.
The REIT Manager has been assumed to receive 100.0% of its management fees in the form of
Stapled Securities for Forecast Period 2014 and Projection Year 2015. Where the management
fees are payable in Stapled Securities, the REIT Manager has assumed that such Stapled
Securities are issued at the Offering Price.
(See Management and Corporate Governance Fees Payable to the REIT Manager for details
of the fees payable to the REIT Manager, which include other fees such as the acquisition fee and
divestment fee.)
Other management fees
MIT Managers management fee
Pursuant to the Investment Management Agreement for MIT Australia, the MIT Manager is entitled
to a management fee comprising a base fee of 0.3% per annum of the total value of the trust
property of MIT Australia and a performance fee of 5.5% of the aggregate earnings before interest,
taxes, depreciation and amortisation of MIT Australia in the relevant financial year. For the
purposes of the Forecast Period 2014 and Projection Year 2015 Financial Information, it is
assumed that 100.0% of the MIT Managers management fees were paid in Stapled Securities.
Where the management fees are payable in Stapled Securities, the MIT Manager has assumed
that such Stapled Securities are issued at the Offering Price.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to Australian Properties for further details.)
Kobe Asset Managers management fee
Pursuant to the Asset Management Agreement, the Kobe Asset Manager is entitled to:
(a) an annual management fee of JPY14.0 million (exclusive of consumption tax); and
(b) where the disposition of ANA Crowne Plaza Kobe (or any part thereof, directly or indirectly,
including the disposition of the equity shares in Kobe Excellence TMK or any restructuring
involved in the disposition) occurs, Kobe Excellence TMK shall pay to the Kobe Asset
Manager an additional fee (Additional Fee), which shall be determined at the time of the
disposition based on consultation between the parties on good faith, for the additional
services rendered by the Kobe Asset Manager for the disposition, provided that no
disposition fee is payable to the Kobe Asset Manager for the disposition of ANA Crowne
Plaza Kobe as part of the Listing; and
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
213
(c) a brokerage services fee for brokerage services rendered by the Kobe Asset Manager for the
disposition of ANA Crowne Plaza Kobe (or any part thereof, directly or indirectly, including the
disposition of the equity shares in Kobe Excellence TMK or any restructuring involved in the
disposition), the amount of which shall be determined at the time of the disposition based on
consultation between the parties on good faith, payable separately from the Additional Fee,
upon the completion of the disposition through the brokerage services provided by the Kobe
Asset Manager.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to ANA Crowne Plaza Kobe for further details.)
ABS Servicer Fee
Pursuant to the Servicing Agreement, the Servicer is entitled to a Servicer fee (exclusive of
applicable service tax or goods and services tax), payable in arrears on a semi-annual basis (save
and except for the first and the last servicing period) which is equivalent to an amount of
MYR360,000.00.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to The Westin Kuala Lumpur for further details.)
Trustees fees
REIT Trustees fees
Pursuant to the FH-REIT Trust Deed, the REIT Trustees fee is presently charged on a scaled
basis of up to 0.015% per annum of the value of the FH-REIT Deposited Property, subject to a
minimum of S$15,000 per month, excluding out-of-pocket expenses and GST.
(See Management and Corporate Governance Fees Payable to the REIT Trustee for further
details.)
MIT trustees fee and MIT Sub-Trustees Fees
Pursuant to the MIT Trust Deed, the MIT Trustees fee and MIT Sub-trustees fees are AUD55,000
per annum and AUD15,000 per annum per sub-trust respectively, excluding out-of-pocket
expenses and GST. As there are two MIT Sub-trusts, the aggregate fee payable to the MIT
Sub-trustee is AUD30,000 per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to Australian Properties for further details.)
TMK Trustees Fee
Pursuant to the Japan Trust Agreement, the TMK Trustees fee is JPY5.4 million per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to ANA Crowne Plaza Kobe for further details.)
ABS Security Trustees Fee
Pursuant to the ABS Trust Deed, the ABS Security Trustees fee is MYR60,000 per annum.
(See Certain Agreements Relating to FHT, FH-REIT, FH-BT and the Properties Agreements
Relating to The Westin Kuala Lumpur for further details.)
214
Trustee-Managers Fees
Pursuant to the FH-BT Trust Deed, the Trustee-Manager is entitled to:
(a) a management fee comprising a Base Fee of 0.3% per annum of the value of the FH-BT Trust
Property and a Performance Fee of 5.5% of the aggregate Distributable Income of FHT in the
relevant financial year (calculated before accounting for the REIT Performance Fee and BT
Performance Fee but after accounting for the REIT Base Fee and the BT Base Fee), payable
in the event that FH-BT becomes active; and
(b) a trustee fee of a maximum of 0.1% per annum of the value of the FH-BT Trust Property,
subject to a minimum fee of S$10,000 per month provided that the value of the FH-BT Trust
Property is at least S$50.0 million, payable in the event that FH-BT becomes active.
In relation to the Performance fee, there should be no double-counting of fees. In the event that
both the Trustee-Manager and the REIT Manager are entitled to the Performance Fee, such fees
payable to both the Trustee-Manager and the REIT Manager will be apportioned based on the
respective proportionate contributions of FH-REIT and FH-BT in the Performance Fee
1
. For the
avoidance of doubt, the maximum Performance Fee payable to both the Trustee-Manager and the
REIT Manager collectively is 5.5% per annum of the aggregate Distributable Income of FHT in the
relevant financial year (calculated before accounting for the Performance Fee but after accounting
for the Base Fee.
For the purposes of the Forecast Period 2014 and Projection Year 2015 Financial Information, it
is assumed that FH-BT is dormant.
(See Management and Corporate Governance Fees Payable to the Trustee-Manager for
details of the fees payable to the Trustee-Manager, which include other fees such as the
acquisition fee and divestment fee.)
Other expenses
Other expenses comprise operating expenses such as compliance expenses, annual listing fees,
registry fees, audit and tax advisory fees, valuation fees, stamp duty, insurance fees, commission
fees, costs associated with the preparation and distribution of reports to the holders of the Stapled
Securities, investor communication costs and other miscellaneous costs.
Finance costs
Finance costs consist of interest expense, commitment fee, legal fees and upfront debt
establishment fees incurred in relation to the Loan Facilities. Debt-related transaction costs are
amortised over the term of the Loan Facilities.
An amount of S$728.6 million of the Loan Facilities will be drawn down on the Listing Date. The
REIT Manager has assumed that the average effective interest rate for Forecast Period 2014 and
Projection Year 2015 will be approximately 2.2% per annum for the term loan, including upfront
debt establishment costs and 1% per annum for short term revolving credit facility. The upfront
debt establishment costs incurred in relation to the initial debt facility is assumed to be amortised
over its term and has been included as part of the finance costs. It is assumed that the short term
revolving credit facility will be repaid in December 2014.
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
215
Taxes
The following taxes have been taken into account in the Forecast Period 2014 and Projection Year
2015:
(i) Australia withholding tax
(ii) UK income tax
(iii) Japan corporate/withholding tax
(iv) Malaysia corporate/withholding tax
(v) Singapore corporate tax
(See Taxation for further details of the taxes mentioned above.)
Initial Portfolio
The aggregate value of the Properties as at Listing Date was S$1,663.7 million, based on
purchase price of each Property. For the purposes of the profit forecasts and profit projections, the
REIT Manager has assumed an increase in the value of the Properties only to the extent of the
budgeted capital expenditure.
Capital expenditure
Certain forecast and projected capital expenditure has been included based on the REIT
Managers budgets. The budgeted capital expenditure is intended to fund asset enhancement
works such as the upgrading of lifts, room renovations and refurbishments and the renovation of
the faade of the Properties. Capital expenditure is expected to be capitalised as part of the
investment properties.
The cost of FF&E will be borne by the Master Lessee or Tenant under the Master Lease and
Tenancy Agreements for each of the hotels and residences. The Master Lessees or Tenant will set
aside periodic FF&E Reserves ranging from 2.5% 4.0% of the Gross Revenue per annum.
Planned Refurbishment for InterContinental Singapore
A budgeted capital expenditure of S$6.0 million is expected to be incurred for InterContinental
Singapore in Forecast Period 2014 and another S$20.0 million in Projection Year 2015 to refurbish
the guest rooms, the food & beverage areas, the public areas and the gym. S$20.0 million of such
capital expenditure is expected to be funded by working capital and/or borrowings under the
FH-REIT Debt Facilities, with the balance funded from FF&E Reserve carried forward from prior
years.
Planned Refurbishment for Fraser Place Canary Wharf
Fraser Place Canary Wharf has expanded its room count from 96 units as at 31 December 2013
to 108 units upon completion of Phase 2 refurbishment in end-May 2014.
216
Hotels with Planned Refurbishment
For Novotel Rockford Darling Harbour and ANA Crowne Plaza Kobe, the Managers anticipate that
there will be minor works to refurbish the public areas, replacement of certain operating equipment
and upgrade of certain mechanical and electrical equipment funded by Master Lessees using the
FF&E Reserve carried forward from prior years.
Accounting standards
The REIT Manager has assumed that there will be no change in applicable accounting standards
or other financial reporting requirements that may have a material effect on the forecast or
projected net income.
Other Assumptions
The REIT Manager has made the following additional assumptions in preparing the profit forecasts
for Forecast Period 2014 and the profit projections for Projection Year 2015:
(i) the Initial Portfolio remains unchanged throughout the periods;
(ii) no further capital will be raised during the periods;
(iii) there will be no material change in taxation legislation or other applicable legislation;
(iv) the relevant tax exemptions, tax remissions, preferential tax treatments and Tax Rulings
granted remain valid and applicable;
(v) there will be no material change to the circumstance upon which the Tax Rulings are granted
and that the terms and conditions of the Tax Rulings are complied with;
(vi) the FH-REIT Debt Facilities are available during the periods at the same effective interest
rate;
(vii) all leases are enforceable and will be performed in accordance with their terms;
(viii) there will be no pre-termination of any committed leases;
(ix) 100.0% of the distributable income will be distributed;
(x) 100% of the distributable income in foreign currency for Forecast Period 2014 and Projection
Year 2015 will be hedged; and
(xi) the foreign exchange rates applied in the preparation of Forecast Period 2014 and Projection
Year 2015 are assumed as follows:
As at
the Listing Date Forecast Period 2014 Projection Year 2015
AUD/SGD 1.17670 1.17260 1.14430
GBP/SGD 2.12775 2.12700 2.11320
JPY/SGD 0.01229 0.01229 0.01234
MYR/SGD 0.38873 0.38730 0.37710
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SENSITIVITY ANALYSIS
The forecast and projected distributions included in this Prospectus are based on a number of
assumptions that have been outlined above. The forecast and projected distributions are also
subject to a number of risks as outlined in Risk Factors.
Investors should be aware that future events cannot be predicted with any certainty and deviations
from the figures forecast or projected in this Prospectus are to be expected. To assist investors
in assessing the impact of these assumptions on the profit forecasts and profit projections, a
series of tables demonstrating the sensitivity of the distribution per Stapled Security to changes
in the principal assumptions are set out below.
The sensitivity analysis is intended to provide a guide only and variations in actual performance
could exceed the ranges shown. Movement in other variables may offset or compound the effect
of a change in any variable beyond the extent shown.
Gross Revenue
Changes in Gross Revenue will impact the Net Property Income of FH-REIT and, consequently,
the distribution yield. The assumptions for Gross Revenue have been set out earlier in this
section.
The effect of variations in the Gross Revenue on the distribution yield is set out below:
Based on Issue Price Forecast Period 2014 Projection Year 2015
(%) (%)
5.0% above base case 7.39 7.48
Base Case 6.90 7.00
5.0% below base case 6.42 6.52
Property Expenses
Changes in Property Expenses will impact the Net Property Income of FH-REIT and,
consequently, the distribution yield. The assumptions for Property Expenses have been set out
earlier in this section.
The effect of variations in the Property Expenses on the distribution yield is set out below:
Based on Issue Price Forecast Period 2014 Projection Year 2015
(%) (%)
5.0% above base case 6.81 6.90
Base Case 6.90 7.00
5.0% below base case 7.00 7.09
Payment Top-Up
The payment top-up will impact the net income of FH-REIT and, consequently, the distribution
yield. The assumptions for payment top-up have been set out earlier in this section.
The effect of payment top-up on the distribution yield is set out below:
218
Based on Issue Price Forecast Period 2014 Projection Year 2015
(%) (%)
With Payment Top Up 6.90 7.00
Without Payment Top Up 6.50 6.51
Finance Costs
Changes in finance costs will impact the net income of FH-REIT and, consequently, distribution
yield. The assumptions for finance costs have been set out earlier in this section.
The effect of variations in the finance costs on the distribution yield is set out below:
Based on Issue Price Forecast Period 2014 Projection Year 2015
(%) (%)
5.0% above base case 6.84 6.94
Base Case 6.90 7.00
5.0% below base case 6.97 7.06
REIT Managers Management Fees, MIT Managers Management Fees and the Serviced
Residences Operators Management/ Trademark Licence Fees Payable in Stapled Securities
The REIT Manager has assumed, for the Forecast Period 2014 and the Projection Year 2015, that
100.0% of the REIT Managers management fees and MIT Managers management fees will be
paid in Stapled Securities. The REIT Manager has also assumed that 100.0% of fees payable to
the Serviced Residences Operators will be paid in Stapled Securities. The REIT Manager has
assumed that such Stapled Securities are issued at the Offering Price.
The effect of an increase in the level of portion of the REIT Managers management fees and the
Serviced Residences Operators management/trademark licence fees payable in Stapled
Securities on the distribution yield is set out below:
Impact on Distribution Yield pursuant to
changes in the REIT Managers management
fees and Serviced Residences Operators
management/trademark licence fees payable
in Stapled Securities
Forecast Period 2014
(%)
Projection Year 2015
(%)
Offering Price
(S$/Stapled Security) 0.88 0.88
Base Case (100% of REIT Managers management
fees, MIT Managers management fees and
Serviced Residences Operators
management/trademark licence fees payable in
Stapled Securities) 6.90 7.00
50% of REIT Managers management fees, MIT
Managers management fees and Serviced
Residences Operators management/
trademark licence fees payable in Stapled
Securities 6.19 6.34
0% of REIT Managers management fees, MIT
Managers management fees and Serviced
Residences Operators management/
trademark licence fees payable in Stapled
Securities 5.51 5.70
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STRATEGY
INVESTMENT POLICY
FH-REIT is a Singapore-based REIT and FH-BT is a Singapore-based business trust. FHT is
regulated by the Deeds as well as any legislation and regulations governing FHT, FH-REIT and
FH-BT.
FH-REIT is established with the principal investment strategy of investing on a long-term basis,
directly or indirectly, in a diversified portfolio of income-producing real estate located in anywhere
in the world except Thailand, which is used primarily for hospitality and/or hospitality-related
purposes, whether wholly or partially, as well as real estate-related assets in connection to the
foregoing. FH-REIT is principally regulated by the SFA, the CIS Code, including the Property
Funds Appendix, other relevant regulations as well as the Stapling Deed and the FH-REIT Trust
Deed.
In accordance with the requirements of the Listing Manual, this principal investment policy will be
adhered to for at least three years following the Listing Date unless changed by Extraordinary
Resolution passed by the holders of FH-REIT Units. After the expiry of the three-year period, the
REIT Manager may, subject to the requirements under the relevant laws, regulations and rules
(including the Listing Manual) and within the limits of the Deeds, from time to time change the
principal investment policy of FH-REIT without the approval of the holders of FH-REIT Units by
giving not less than 30 days prior notice of the change to the REIT Trustee and the Stapled
Securityholders by way of an announcement on SGXNET.
OBJECTIVES
The initial portfolio of FHT will, on the Listing Date, comprise 12 properties consisting of six Hotels
and six Serviced Residences held through FH-REIT. The Managers principal objectives are to
deliver stable and growing distributions to Stapled Securityholders and to achieve long-term
growth in DPS and in the NAV per Stapled Security, while maintaining an appropriate capital
structure.
KEY STRATEGIES
FH-REITs Strategies
The REIT Manager plans to achieve its objectives through the following key strategies:
Acquisition Growth Strategy Supported by Acquisition Opportunities in respect of the
Sponsor ROFR Properties, the TCC ROFR Properties and Other Third Party Properties
The REIT Manager will source for and pursue asset acquisition opportunities which provide
attractive cash flows and yields and which satisfy the REIT Managers investment mandate
for FH-REIT to enhance the returns to Stapled Securityholders and improve potential
opportunities for future income and capital growth.
Active Asset Management and Enhancement Strategy The REIT Manager will
implement pro-active measures to enhance the Properties and to improve their operational
performance, so as to optimise the cash flow and value of the Properties. Through such
active management, the REIT Manager seeks to enhance the efficiency of the Properties to
improve occupancy rates, ADR and RevPAR, as well as to create a better lodging experience
for its clientele.
220
Capital and Risk Management Strategy The REIT Manager will endeavour to maintain a
strong balance sheet, employ an appropriate mix of debt and equity in financing acquisitions
of properties, secure diversified funding sources to access both financial institutions and
capital markets, optimise its cost of debt financing and utilise interest rate and foreign
exchange hedging strategies, where appropriate, in order to minimise exposure to market
volatility.
FH-BTs Strategy
As at the Listing Date, FH-BT will be dormant. It will, however, become active if any of the
following occurs:
it is appointed by FH-REIT, in the absence of any other master lessee(s) being appointed, as
a master lessee of one of the Properties. FH-BT exists primarily as a master lessee of last
resort;
FH-REIT acquires hotels or serviced residences in the future, and, if there are no other
suitable master lessees, FH-REIT will lease these acquired hotels or serviced residences to
FH-BT. FH-BT will then become a master lessee for that hotel or serviced residence and will
appoint a professional manager to manage that hotel or serviced residence; or
it undertakes certain hospitality or hospitality-related development projects, acquisitions and
investments which may not be suitable for FH-REIT.
FH-BT will generally be considered to be active in the event that it carries on any business activity
other than:
activities which FH-BT is required to carry out under any applicable law, regulation, rule or
directive of any agency, regulatory or supervisory body;
the lending or use of the initial S$10,000 working capital raised from the Offering; or
equity fund-raising activities and issue of FH-BT Units carried out in conjunction with
FH-REIT which are solely for the purposes of funding FH-REITs business activities.
When FH-BT becomes active, the Trustee-Manager intends, where appropriate, to manage the
exposure arising from adverse market movements in interest rates through appropriate hedging
strategies. The extent of the foreign exchange exposure would depend on the jurisdictions in
which FH-BT becomes active in and the extent of the interest rate exposure would depend on the
type of financing facilities, if any, to be obtained by FH-BT. FH-BT is currently dormant but if it
becomes active, the Trustee-Manager will put in place appropriate internal controls to ensure that
hedging activities will only be undertaken for risk management purposes.
FH-REIT will not guarantee any debt of FH-BT, and vice versa. This will help to shield each entity
from the others financial obligations because each entitys creditors will not have recourse to the
other.
Acquisition Growth Strategy Supported by Acquisition Opportunities in respect of the
Sponsor ROFR Properties, the TCC ROFR Properties and Other Third Party Properties
The REIT Manager intends to meet its objectives of enhancing the returns to Stapled
Securityholders and improving potential opportunities for future income and capital growth by
carefully evaluating acquisition opportunities in accordance with the REIT Managers strategy and
investment mandate for FH-REIT.
221
In evaluating future acquisition opportunities, the REIT Manager will rely on the following
investment criteria in relation to the property under consideration:
Yield requirements
The REIT Manager will seek to acquire only properties which are value-enhancing after
taking into account regulatory, commercial, political and other relevant factors, with yields
that are estimated to be above the cost of capital and which are expected to maintain or
enhance returns to Stapled Securityholders while balancing the various risks associated with
such an investment.
Geographical location
The REIT Manager will assess each propertys location and the potential for business growth
in its market, as well as its impact on the overall geographic diversification of its asset
portfolio. The REIT Manager will also evaluate a range of location-related criteria, including,
but not limited to, ease of access, connectivity to major business, tourist and transportation
hubs, visibility of properties from the surrounding markets and the presence and
concentration of competitors in the vicinity of the property.
Strong fundamentals and organic growth potential
The REIT Manager will seek to acquire properties with good potential for increasing RevPAR
and occupancy rates going forward.
Asset enhancement potential
The REIT Manager may also seek to acquire properties which have the potential to add value
through improved hotel and serviced residence management, market repositioning or other
asset enhancements.
Building and facilities specification
With respect to potential properties to be acquired by FH-REIT, the REIT Manager will
endeavour to conduct thorough property due diligence and adhere strictly to relevant legal
and zoning regulations as well as quality specifications, with consideration given to the size
and age of the buildings. The properties will be assessed by independent experts relating to
repairs, maintenance and capital expenditure requirements in the short to medium term.
The acquisition strategy will be supported by opportunities arising from trends in the hospitality
industry. The REIT Manager believes that hospitality service providers are increasingly looking to
free up capital for business expansion, which may increase the availability of hotels and serviced
residences for acquisition.
In addition, FHTs acquisition strategy is complemented by the Sponsor ROFR and the TCC
ROFR. Collectively, the Sponsor ROFR and the TCC ROFR will provide FHT with access to future
acquisition opportunities of income-producing properties located anywhere in the world except
Thailand which are primarily used for hospitality and/or hospitality-related purposes.
FH-REIT may also leverage on the extensive industry experience of the Sponsor and the TCC
Group, expertise in assessing potential acquisition opportunities and track record in developing
integrated mixed-use developments, and may also tap on the established network of relationships
which the Sponsor and the TCC Group have developed in the global hospitality sector to pursue
222
its growth strategy. Leveraging on this strategy, the REIT Manager believes that it will be able to
source value-enhancing acquisitions within the immediate network of relationships of the Sponsor
and the TCC Group.
As at the date of this Prospectus, there are 12 Sponsor ROFR Properties, which could potentially
be offered to FHT as hotels or, as the case may be, serviced residences, under the Sponsor
ROFR. The acquisition of the Sponsor ROFR Properties is subject to Chapter 9 of the Listing
Manual and may be required to be approved by the holders of the Stapled Securities at the
relevant time in accordance with Chapter 9 of the Listing Manual.
Details of the Sponsor ROFR properties are set out below:
Capri by Fraser, Changi City, Singapore
Capri by Fraser, Changi City is a hotel residence situated within Changi Business Park,
Singapore. Opened in 2012, the property has 313 spacious studios equipped with kitchenettes
and enjoys close proximity to the Singapore Expo, which is one of Southeast Asias largest
exhibition centres, and is a five-minute ride away from Changi International Airport. The hotel
residence is also accessible from the CBD via expressways and the MRT. The facilities at the hotel
residence include a fully-equipped gymnasium which overlooks the swimming pool, a board room
with touch-screen capabilities and a function room, as well as an all-day dining restaurant.
Launderettes are also located on every floor.
The Sponsor holds a 50.0% stake in Capri by Fraser, Changi City, Singapore.
Sofitel Sydney Wentworth, Australia
Sofitel Sydney Wentworth is an iconic hotel located in the heart of Sydneys Central Business
District, surrounded by offices with high profile tenants from the finance, legal and government
sectors. It is also within walking distance to other landmarks in Sydney such as the Opera House,
Sydney Harbour Bridge, The Rocks, Hyde Park, Pitt Street Mall and Darling Harbour. The hotel
features 436 guest rooms & suites together with a lobby bar, restaurant, club lounge and
substantial conference facilities, including one of the largest pillarless ballrooms in Sydney.
Capri by Fraser, Barcelona, Spain
Located in the 22@ district, one of the largest redevelopment schemes in Barcelona, the existing
Porta Marina Hotel will undergo a refurbishment programme to be rebranded to Capri by Fraser
Barcelona. The hotel residence is expected to open in 1H2015. It is within walking distance to the
business hub around the Torre Agbar Tower and Marina Metro station which is 3 stops to Plaza
Catalunya. It enjoys close proximity to the internationally renowned Sagrada Familia, the National
Theatre of Catalonia and LAuditori, Barcelonas new auditorium. The property has a restaurant
and large meeting facilities.
Fraser Place Robertson Walk, Singapore
Fraser Place Robertson Walk is located near the historical Singapore River and enjoys close
proximity to the CBD. It is also within walking distance to the Boat Quay and Clarke Quay areas.
Fort Canning Park, which is one of Singapores historical landmarks, is also nearby. The serviced
residence comprises 164 units, ranging from one, two to three-bedroom suites. The facilities at the
serviced residence include a fully-equipped gymnasium, a swimming pool, a pool table and an
all-day dining cafe with an outdoor terrace.
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Fraser Place Manila, Philippines
Fraser Place Manila is a serviced residence located at Salcedo Village, Makati City, the
Philippines. The serviced residence is strategically located in the heart of Makatis CBD, providing
easy access to the banking and financial districts, as well as the citys entertainment and
restaurant belt. Cultural attractions such as the Ayala Museum are also nearby. The serviced
residence has 89 units comprising of one, two, three and four-bedroom units. Selected units are
furnished with a jet pool with access to the Sky Gardens. The facilities at the serviced residence
include a fully-equipped gymnasium, a swimming pool, a childrens playroom and a wading pool,
as well as meeting rooms.
Fraser Residence Sudirman Jakarta, Indonesia
Fraser Residence Sudirman Jakarta is a serviced residence located in the Golden Triangle district
of Jakartas CBD. It offers convenient access to the surrounding office towers, government offices
and embassies. It is also within close proximity to the shopping district with malls such as Grand
Indonesia, Plaza Senayan and Plaza Indonesia. The serviced residence offers 108 units of one,
two and three-bedroom units. Facilities in the serviced residence include a swimming pool, a
gymnasium and tennis, squash and basketball courts.
Fraser Suites Beijing, China
Fraser Suites Beijing is a serviced residence located at Beijings Chao Yang District. Located in
the heart of Beijings bustling commercial hub, the China World Trade Centre commercial circle.
Fraser Suites Beijing also provides prime access to a spectrum of leisure activities, from the iconic
Forbidden City to China World Shopping Mall and Kerry Centre. A scenic park is located just
minutes away from this property. Fraser Suites Beijings 357 apartments comprises studios, one
and two-bedroom apartments. Facilities include a fully equipped gymnasium, indoor heated
swimming pool, steam and sauna rooms, childrens playroom and a snooker lounge. There is also
a business centre and meeting rooms.
Fraser Suites Kensington, London, UK
Fraser Suites Kensington is a serviced residence located within walking distance to
Knightsbridge, Chelsea, Hyde Park, the Royal Albert Hall and Harrods. The serviced residence
has 69 apartments comprising suites, one, two and three-bedroom units. Guests also have access
to the 2.5 acre private garden. The facilities at the serviced residence include a gymnasium and
a sauna.
Capri by Fraser Brisbane, Australia
Currently undergoing conversion from an office building and expected to be opened in 2015, Capri
by Fraser Brisbane is a hotel residence centrally located in the heart of Brisbanes CBD, with close
proximity to the Brisbane City Botanical Gardens, Queen Street pedestrian mall and office
buildings such as the Rio Tinto Tower. A range of dining and entertainment options are also located
in the vicinity. Upon completion, it will have 239 studios and facilities such as meeting and
conference rooms, a fully-equipped gymnasium and an all-day dining restaurant.
Capri by Fraser Frankfurt, Germany
Currently under construction and expected to be completed in 2015, Capri by Fraser Frankfurt is
a hotel residence located just next to the citys exhibition center and is within close proximity to
the CBD. It is also within close proximity to the new Skyline Plaza shopping mall, a mixed
development with a retail mall, a leisure centre and the PWC office tower. Upon completion, it will
have meeting and conference rooms, a fully-equipped gymnasium and a breakfast dining area.
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Fraser Place Melbourne, Australia
Fraser Place Melbourne is a serviced residence located in the Melbourne CBD, with convenient
access to Chinatown and the Greek Precinct. It is also within close proximity to attractions such
as the Melbourne Museum, the IMAX Theatre, the Royal Melbourne Exhibition Building and Lygon
Street. The serviced residence offers 112 units of studio apartments. Facilities include a
gymnasium and a caf.
Fraser Suites Perth, Australia
Fraser Suites Perth is a serviced residence located in East Perth on the fringe of the CBD.
Located right next to the Swan River and within close proximity to the WACA cricket ground and
Langley Park, the serviced residence offers 236 units of studio and one-bedrooms units. Facilities
in the serviced residence include a restaurant, a lobby lounge with a bar, a swimming pool, a
gymnasium, a sauna and meeting rooms.
As at the date of this Prospectus, there are six TCC ROFR Properties, which could potentially be
offered to FHT as hotels or, as the case may be, serviced residences, under the TCC ROFR. The
acquisition of the TCC ROFR Properties is subject to Chapter 9 of the Listing Manual and may be
required to be approved by the holders of the Stapled Securities at the relevant time in accordance
with Chapter 9 of the Listing Manual.
Details of the TCC ROFR properties are set out below:
InterContinental Adelaide, Australia
InterContinental Adelaide is a luxury hotel located in the heart of Adelaides city centre, beside the
banks of the Torrens River and next to the Adelaide Festival Centre, the Adelaide Convention
Centre, Casino and Festival Centre. It is within walking distance to the cultural area of the North
Terrace. The Hotel offers 367 guest rooms and suites with room sizes ranging from 36 sq m to 157
sq m. Facilities in the Hotel include two restaurants, a lounge, a business centre, a fitness centre
and an outdoor heated swimming pool.
Plaza Athenee, New York, USA
The Htel Plaza Athne, New York was built in 1927 and has undergone two multi-million dollar
refurbishment projects in recent years. The latest refurbishment includes the renovation of the
majority of guestrooms and suites, the addition of four premier luxury suites, a new lobby look, a
spacious fitness center and business center, as well as the addition of the luxurious Plaza Athne
Spa. The hotels 142 guestrooms and suites have been individually designed to reflect a grand,
European townhouse dcor. Many suites feature glass-enclosed atriums and outdoor balconies
with views of the Manhattan skyline.
Located on Manhattans Upper East Side, one block from Central Park, the hotel is within walking
distance of luxury retail shopping, including Barneys New York, Bloomingdales, and Bergdorf
Goodman department stores.
Le Meridien Angkor, Cambodia
With its Khmer-themed architecture, Le Meridien Angkor is located approximately 8 km from the
Angkor Temple Complex and 16 km from Siem Reap Airport. It is also situated 2 km from the
downtown area where two major markets are located. The hotel has 223 deluxe rooms and suites.
Hotel amenities include a spa and several dining options.
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Hyatt Hotel Canberra
Hyatt Hotel Canberra is a heritage hotel which is located in Canberras central business district,
next to Australias Parliamentary Triangle, and in close proximity to the city centre, the government
office and tourist attractions such as Questacon, Manuka Oval and the Australian War Memorial.
It is also within walking distance of the National Gallery of Australia, the National Portrait Gallery
and the National Library, and offers convenient access to the city and suburban areas, as well as
Canberra International Airport. The Hotel offers 253 guest rooms with room sizes ranging from
41.0 sq m to 310.0 sq m. Facilities in the Hotel include a restaurant lounge, a bar and a clubhouse.
The clubhouse features amenities such as a heated indoor swimming pool, fully-equipped
gymnasium, spa, sauna and a tennis court.
Crowne Plaza Hotel, Kunming, China
Crowne Plaza Kunming City Centre is a premium landmark hotel in the heart of Kunmings central
business district. Located at the intersection of the bustling Qingnian and Jinbi Roads, with the
Panlong River as its backdrop, the hotel is situated in a convenient downtown location. Guests can
easily access a wide range of nearby shopping and entertainment venues, as well as the Metro.
The hotel is strategically situated 3 km from Kunming Railway Station and a 30 minute drive from
Kunming Changshui International Airport.
Crowne Plaza Kunming City Centre has 19 floors with a total of 251 guest rooms and 52 suites,
3 restaurants, a cigar bar, a lobby lounge and a Crowne Plaza Club Lounge. All the guest rooms
provide a full set of amenities to meet the needs of all business, meeting, leisure and long-stay
guests. The hotel also provides a fitness centre, outdoor swimming pool, sauna and steam rooms,
and tennis courts. It also offers a total of 1,000 sq m conference spaces, including a Grand
Ballroom that can accommodate up to 500 guests, and 4 meeting rooms ranging in size from 54
sq m to 128 sq m.
Crowne Plaza Hotel Kunming is currently undergoing renovation, with completion expected in
2015.
Holiday Inn Hotel, Kunming, China
Holiday Inn Kunming City Centre is a premium landmark hotel in the heart of Kunmings central
business district. Located at the intersection of Dongfeng square, with the Baita business area as
its backdrop, the hotel offers a convenient downtown location to guests, who can easily access a
wide range of nearby shopping and entertainment venues, as well as the Metro. The hotel is
situated 3 km from the Kunming Railway Station and a 30 minute drive from Kunming Changshui
International Airport.
The hotel offers 269 comfortable guest rooms and 28 suites, 3 restaurants, a lobby lounge and an
executive lounge. It is equipped with a state-of-the-art fitness centre, indoor heated swimming
pool, as well as a broad range of professional services. Holiday Inn Kunming City Centre boasts
700 sq m of flexible event space in 7 meeting rooms, including a Grand Ballroom that seats up to
180 guests.
Holiday Inn Hotel, Kunming is currently undergoing renovation, with completion expected in 2015.
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Active Asset Management and Enhancement Strategy
The REIT Manager will implement pro-active measures to enhance the Properties and to improve
their operational performance in order to optimise the cash flow and value of the Properties, as
well as to leverage upon its strategic relationship with the Sponsor, which has extensive
experience in the hospitality and real estate industries. Through such active management, the
REIT Manager seeks to enhance the efficiency of the Properties to improve occupancy rates, ADR
and RevPAR, as well as to create a better lodging experience for its customers. The REIT
Manager will conduct refurbishment programmes on selected Properties which will be aimed at
maintaining and improving the image and attractiveness of the Properties to increase patronage,
and potentially, the Properties RevPAR.
Measures that the REIT Manager may implement to meet its objectives include, but are not limited
to:
Continuous portfolio optimisation
The REIT Manager intends to hold assets on a long-term basis, but with a pro-active
approach towards optimising the yield and value of FH-REITs portfolio. This includes
identifying assets within the portfolio which have reached their optimal maturity for
divestment and recycling capital from the sale proceeds towards higher yielding growth
opportunities.
Effective collaboration with the Master Lessees and Tenant
The hospitality management agreements between the Master Lessees and Tenant and the
Hotel Managers and/or the Serviced Residence Operators enable the Master Lessees or
Tenant to closely monitor the performance of the Hotel Managers and the Serviced
Residence Operators. The REIT Manager will work closely with the Master Lessees and
Tenant to ensure that each of the Hotel Managers and Serviced Residence Operators uses
its best efforts to optimise the performance of each Property. The Master Lessees and
Tenant, in consultation with the REIT Manager, will oversee the annual budgeting process for
the Properties and will be responsible for developing strategies to improve the Properties
revenue and performance against competitors in similar market segments. This will include
drawing upon the Sponsors extensive industry experience to provide strategic direction in
areas such as room yield management, optimising guest mix, developing marketing
programmes, accessing global hospitality market intelligence, and leveraging upon the
Sponsors in-depth understanding of the latest hospitality industry trends to implement
innovative hotel and F&B concepts.
In addition, the REIT Manager will work actively with the Master Lessees and Tenant to
create opportunities to enhance the Properties, such as by engaging the Master Lessees and
Tenant on discussions relating to renovation and refurbishment exercises designed to
enhance guest experience and improve the overall market share, and returns to unitholders.
Close interaction and consultation between the REIT Manager and the Master Lessees and
Tenant, and the Hotel Managers and/or the Serviced Residence Operator, will ensure that the
REIT Managers asset management strategies are implemented.
Refurbishments currently undertaken or being planned
The Managers and the Hotel Managers and the Serviced Residence Operators intend to
conduct refurbishment programs on selected Properties in a staged manner in order to
ensure income stability. The refurbishments will be aimed at maintaining and improving the
image and attractiveness of the Properties to increase patronage, and potentially, the
Properties RevPAR.
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Certain recent refurbishment programmes on the Serviced Residences are as follows.
Fraser Suites Singapore: the Property was opened in 1998 and underwent an extensive
renovation which was completed in 2012. The renovation was done in phases over a
three-year period and included changes in room layouts through the hacking and
reconfiguration of internal walls and complete refurbishment of rooms to bring the
Property ahead of the competition. As a result, the new rooms are more stylishly
furnished and space-efficient, thereby increasing ADR. Through proactive space
planning, GFA from the old outdoor changing and steam/sauna room was decanted into
a new pop-up glass box gymnasium on the podium deck overlooking the swimming
pool. The breakfast lounge was relocated onto the ground floor and reconfigured as a
more efficient set-up. Four one-bedroom apartments were also added in place of
under-utilised meeting rooms, bringing the total number of apartments to 255.
Asset Enhancement for Fraser Suites Singapore
After Before
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Fraser Suites Queens Gate: the Property underwent an extensive renovation in
end-2012 to rebrand itself from Fraser Place to Fraser Suites. All the serviced
residence units were refurbished and upgraded and all the common facilities were
completely re-designed. The reception area was re-designed to create a new sense of
arrival, leading to the recreated dining/breakfast room. New facilities installed include
the gymnasium, meeting rooms and the bar. New elevators were also added. The
renovation was completed within 11 months and the Property benefitted from an uplift
in room rates.
Asset Enhancement for Fraser Suites Queens Gate
After Before
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Fraser Place Canary Wharf: the Property was renovated in end-2011 to reconfigure 17
large two and three-bedroom apartments into higher-yielding 33 studios and one-
bedroom apartments. Through the renovation, the room inventory was increased by 16
units to 96 units. Together with the soft refurbishment of the other units, the Property
enjoyed higher room rates with improved occupancy when the renovation was
completed in 2012. The Property has recently completed its Phase 2 refurbishment
which involves reconfiguring more large two-bedroom apartments into studios and
one-bedroom apartments, increasing its total inventory from 96 to 108 units.
Asset Enhancement for Fraser Place Canary Wharf
After Before
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Capital and Risk Management Strategy
The REIT Manager will endeavour to maintain a strong balance sheet, employ an appropriate mix
of debt and equity in financing acquisitions of properties, secure diversified funding sources to
access both financial institutions and capital markets, optimise its cost of debt financing and utilise
interest rate and foreign exchange hedging strategies, where appropriate, in order to minimise
exposure to market volatility.
The REIT Manager intends to achieve the above by pursuing the following strategies:
Optimal capital structure strategy
The REIT Manager endeavours to optimise the capital structure and cost of capital, within the
borrowing limits set out in the Property Fund Appendix, by employing an optimal capital
structure comprising an appropriate mix of debt and equity in financing acquisitions of
properties and any asset enhancement activities. The REIT Managers capital management
strategy involves adopting and maintaining appropriate aggregate leverage levels to ensure
optimal returns to Stapled Securityholders, while maintaining flexibility in respect of future
capital expenditures or acquisitions.
In the event that FH-REIT incurs any future borrowings, the REIT Manager will periodically
review FH-REITs capital management policy with respect to its Aggregate Leverage and
modify its strategy in the light of prevailing market conditions. The REIT Manager will
endeavour to match the maturity of FH-REITs indebtedness with the maturity of its
investment assets, and to employ long-term, fixed-rate debt to the extent practicable in view
of market conditions in existence from time to time. As and when appropriate, the REIT
Manager will consider diversifying its sources of debt financing in the future, including by way
of accessing the public debt capital markets. The public debt capital markets may also
provide FH-REIT with the ability to secure longer-term funding options in a more cost efficient
manner. Nevertheless, the REIT Manager intends to maintain a prudent level of borrowings
while maximising returns for Stapled Securityholders.
As at the Listing Date, FH-REIT is expected to have incurred borrowings of S$728.6 million,
with an Aggregate Leverage of 41.7% based on the Offering Price. The REIT Manager has
obtained, in respect of FH-REIT, a provisional credit rating of (P) Baa2 (stable outlook) from
Moodys.
1
(See Capitalisation and Indebtedness for further details.)
1
The provisional credit rating assumes the listing of FHT on the SGX-ST, the drawdown of debt facilities of S$728.6
million and the acquisition of the Properties by FH-REIT. The final rating is conditional upon the successful
completion of all the events described in the foregoing sentence. The REIT Manager expects Moodys to assign its
final rating of FH-REIT on the Listing Date and will make an announcement on SGXNET of the final rating when it
has been assigned to FH-REIT. All ratings are subject to revision or withdrawal at any time. Moodys has not
provided its consent, for the purposes of Section 249 (read with Section 302) of the SFA, to the inclusion of the credit
rating information and is therefore not liable for such information under Sections 253 and 254 (read with Section
302) of the SFA and Sections 282N and 282O of the SFA. While the REIT Manager has taken reasonable action to
ensure that the information has been reproduced in its proper form and context, and that it has been extracted fairly
and accurately, neither the REIT Manager nor any other party has conducted an independent review of, nor verified
the accuracy of, such information. The provisional credit rating obtained from Moodys is current and Moodys will
be paid by FH-REIT to provide the credit rating. The credit rating is not a recommendation to invest in any securities.
Issuer credit ratings express Moodys opinion of an entitys creditworthiness and ability to meet its senior financial
obligations. More information on Moodys and its ratings are available on its website www.moodys.com.
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Proactive risk management hedging strategy
The REIT Manager endeavours to utilise interest rate hedging strategies, where appropriate,
to optimise risk-adjusted returns to Stapled Securityholders. The REIT Manager intends to
adopt the following risk management policies in relation to its hedging transactions:
(i) the distributable income of FH-REIT will be hedged as soon as the amount has been
earned from the underlying assets and can be reasonably estimated; and
(ii) at least 50.0% of FH-REITs debt will be on fixed rate terms.
Proactive foreign exchange rate and currency risk management strategy
The REIT Manager will manage foreign exchange volatility through the use of hedging
instruments and regularly evaluate the feasibility of implementing the appropriate level of
foreign exchange hedges, after taking into account the prevailing market conditions. In order
to manage the currency risk involved in investing in assets outside Singapore, the REIT
Manager may adopt a currency risk management strategy that includes the use of foreign
currency-denominated borrowings to match the currency of the asset investment as a natural
currency hedge.
Other financing strategies
The REIT Manager may, in future, consider other opportunities to raise additional equity
capital for FH-REIT through the issue of new Stapled Securities, for example to finance
acquisitions of properties. The decision to raise additional equity will also take into account
the stated strategy of maintaining an optimal capital structure.
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BUSINESS AND PROPERTIES
INITIAL PORTFOLIO OF FHT
The Initial Portfolio will, on the Listing Date, comprise 12 properties consisting of six Hotels and
six Serviced Residences, with a total of 1,928 hotel rooms and 842 serviced residence units. The
Properties are located in Singapore, Australia, the United Kingdom, Japan and Malaysia. The
Initial Portfolio is valued at an aggregate of approximately S$1,666.5 million
1
with a total GFA of
approximately 350,270 sq m.
(See Certain Information about the Properties for a breakdown of the individual valuations.)
Each of the Properties will be leased to the Master Lessees or Tenant. The following charts show
the contribution to the Initial Portfolio by countries in which the Properties are located.
Total Portfolio Geographical
Breakdown by Valuation
Total Portfolio Geographical
Breakdown by Number of Rooms
Singapore
49.5%
Australia
12.1%
UK
19.5%
Japan
8.3%
Malaysia
10.6%
Singapore
23.9%
Australia
15.5%
UK
23.2%
Japan
21.4%
Malaysia
16.0%
The following table sets out the market segment, the Master Lessees and Tenant and the Hotel
Managers of the Hotels.
Hotel Market Segment
Master Lessee or
Tenant Hotel Manager
InterContinental
Singapore
Luxury BCH Hotel Investment
Pte Ltd
InterContinental
Hotels Group (Asia
Pacific) Pte. Ltd.
Novotel Rockford
Darling Harbour
Mid-scale Viewgrand Trust C Rockford Indigo
(Hotels) Pty Limited
2
Park International
London
Mid-scale P I Hotel Management
Limited
TCC Hotels Group
Co., Ltd
Best Western
Cromwell London
Mid-scale P I Hotel Management
Limited
TCC Hotels Group
Co., Ltd
1
Based on the higher of the two independent appraisal values for the Properties and exchange rates of AUD/SGD:
1.17670 | GBP/SGD: 2.12775 | JPY/SGD: 0.01229 | MYR/SGD: 0.38873. The appraisal values of the Properties are
as at 31 March 2014 for Novotel Rockford Darling Harbour and Fraser Suites Sydney and 31 December 2013 for
the remaining Properties.
2
With effect from 1 January 2014, the hotel manager for Novotel Rockford Darling Harbour is Rockford Hotels Pty
Limited (as trustee for the Rockford Hotels Management Trust).
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Hotel Market Segment
Master Lessee or
Tenant Hotel Manager
ANA Crowne Plaza
Kobe
Upper Upscale Hotel component:
K.K. Shinkobe Holding
Retail component:
Y.K. Toranomon
Properties
IHG ANA Hotels
Group Japan LLC
The Westin Kuala
Lumpur
Upper Upscale JBB Hotels Sdn. Bhd. Starwood Asia Pacific
Hotels & Resorts
Pte Ltd
The following table sets out the market segment, the Master Lessees and the Serviced Residence
Operators of the Serviced Residences.
Serviced Residence Market Segment Master Lessee
Serviced Residence
Operator
Fraser Suites
Singapore
Upper Upscale River Valley
Apartments Pte Ltd
Frasers Hospitality
Pte. Ltd.
Fraser Suites Sydney Upper Upscale Frasers Townhall
Residences
Operations Pty Ltd
Frasers Hospitality
Pte. Ltd.
Fraser Place Canary
Wharf
Upper Upscale Fairdace Limited Frasers Hospitality
UK Ltd.
Fraser Suites
Queens Gate
Upper Upscale 39QGG Management
Limited
Frasers Hospitality
UK Ltd.
Fraser Suites
Glasgow
Upper Upscale Fairdace Limited Frasers Hospitality
UK Ltd.
Fraser Suites
Edinburgh
Upper Upscale Frasers (St Giles
Street) Management
Limited
Frasers Hospitality
UK Ltd.
The Hotels
InterContinental Singapore
InterContinental Singapore is a Peranakan-style hotel which is located in the Bugis district, in
close proximity to tourist attractions such as Haji Lane, the National Museum of Singapore and the
Peranakan Museum. It is linked to Bugis Junction, a prime shopping mall which is located above
the Bugis MRT station and offers convenient access to the financial district and the Orchard Road
shopping and entertainment district. The Hotel offers 406 guest rooms with room sizes ranging
from 38.0 sq m to 282.0 sq m. Facilities in the Hotel include three restaurants, a lobby lounge, a
bar, a business centre, a health and fitness centre and an outdoor swimming pool.
Novotel Rockford Darling Harbour
Novotel Rockford Darling Harbour is a contemporary hotel located in the vibrant district of
Sydneys Darling Harbour, adjacent to the Sydney Entertainment Centre and the Sydney
Convention and Exhibition Centre, in close proximity to the shops, museums, restaurants and
attractions of Darling Harbour. The Hotel is approximately 15 minutes away from the airport. The
Hotel offers 230 guest rooms with room sizes ranging from 24.6 sq m to 26.2 sq m. Facilities in
the Hotel include two restaurants, a bar, a caf, a business centre and an indoor lap pool.
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Park International London
Park International London is an elegant hotel located in the heart of Kensington and Chelsea, in
close proximity to Londons tourist attractions such as the Natural History Museum, the Royal
Albert Hall, South Kensington, and Earls Court Exhibition Centre. It is also near to the Gloucester
Road Tube Station. The Hotel offers 171 guest rooms and suites with room sizes ranging from
10.0 sq m to 36.0 sq m. Facilities in the Hotel include two restaurants and a bar.
Best Western Cromwell London
Best Western Cromwell London is a hotel located on Cromwell Road in the borough of South
Kensington, in close proximity to the Gloucester Road Tube Station. Nearby attractions include
the Science Museum, the Natural History Museum, the Victoria & Albert Museum, as well as
shopping destinations such as Harrods and Harvey Nichols. The Hotel offers 85 guest rooms with
room sizes ranging from 10.0 sq m to 25.0 sq m. Facilities in the Hotel include a bar, a lounge,
a breakfast room and a gymnasium.
ANA Crowne Plaza Kobe
ANA Crowne Plaza Kobe is directly connected to the JR Shin-Kobe Shinkansen Station and is
situated above Shin-Kobe Subway Station. It offers convenient access to downtown Kobe and the
Kobe Airport. It is also in close proximity with attractions such as Kitano Ijinkangai Historic
Colonial Houses, Nankinmachi China Town and the Hyogo Art Gallery. The Hotel offers 593 guest
rooms with room sizes ranging from 15.0 sq m to 125.0 sq m. Facilities in the Hotel include 11
restaurants and bars, spa facilities and a health and fitness centre.
The Westin Kuala Lumpur
The Westin Kuala Lumpur is a luxury hotel located in the midst of Kuala Lumpurs Golden Triangle
and business district, with convenient access to the citys shopping malls and nightlife. It is also
in close proximity to KLCC, where numerous multinational corporations and leading financial
institutions are located. The Hotel offers 443 guest rooms with room sizes ranging from 42.0 sq
m to 300.0 sq m. Facilities in the Hotel include six restaurants, an outdoor swimming pool, a
gymnasium and a business centre.
The Serviced Residences
Fraser Suites Singapore
Fraser Suites Singapore is a serviced residence located in the prime residential district, with
convenient access to Orchard Road and the CBD. It is also within close proximity to the Dempsey,
Boat Quay and Clarke Quay entertainment areas and various embassies. The newly-refurbished
Serviced Residence offers 255 units with unit sizes ranging from 50.0 sq m to 350.0 sq m.
Facilities in the Serviced Residence include a caf, an outdoor and indoor playzone, a
gymnasium, a swimming pool and steam and sauna facilities.
Fraser Suites Sydney
Fraser Suites Sydney is a luxury serviced residence located in the Sydney CBD, with convenient
access to Sydneys vibrant entertainment and shopping precinct and local attractions including
Darling Harbour, Cockle Bay, Chinatown and Hyde Park. It is located close to Town Hall Station
and provides easy access to local modes of transportation like trains, buses and the light rail line.
The Serviced Residence offers 201 units with unit sizes ranging from 26.0 sq m to 191.0 sq m.
Facilities in the Serviced Residence include a gymnasium, a heated lap pool and spa and sauna
facilities and conference facilities.
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Fraser Place Canary Wharf
Fraser Place Canary Wharf is a serviced residence located by the River Thames right next to the
heart of Londons new financial district, and a stone-throw away from the O2. It is also within
walking distance to the Canary Wharf shopping and entertainment complex, which is linked to the
Docklands Light Railway and the Canary Wharf underground station, providing direct access to
the West End, the London City Airport and the ExCel London Exhibition Centre. The Serviced
Residence offers 108 units with unit sizes ranging from 22.0 sq m to 200.4 sq m. Facilities in the
Serviced Residence include a caf, a gymnasium and a business centre.
Fraser Suites Queens Gate
Fraser Suites Queens Gate is a serviced residence located in the Kensington area of central
London, with convenient access to Knightsbridge, Chelsea, Hyde Park, the Royal Albert Hall and
Harrods. It is also within close proximity to the Gloucester Road underground station with a 3-stop
connection to Victoria Station. The Serviced Residence offers 105 units with unit sizes ranging
from 24.0 sq m to 62.0 sq m. Facilities in the Serviced Residence include a caf/bar, a gymnasium
and a meeting room.
Fraser Suites Glasgow
Fraser Suites Glasgow is a serviced residence located in Merchant City, the heart of Glasgows
historic centre. It offers convenient access to the restaurants, boutiques, theatres and pavement
cafes in Merchant City. It is also within close proximity to George Square, the Gallery of Modern
Art, Glasgow Cathedral and the shopping destinations of Buchanan Street and St Enoch Centre.
The Serviced Residence offers 98 units with unit sizes ranging from 34.0 sq m to 74.0 sq m.
Facilities in the Serviced Residence include a breakfast room, a 24-hour gymnasium and meeting
facilities.
Fraser Suites Edinburgh
Fraser Suites Edinburgh is a luxury boutique serviced residence located in the Edinburgh city
centre. It offers convenient access to the Royal Mile, Princes Street and Edinburgh Castle, and is
surrounded by restaurants, bars, cafes and shops in the historic quarter. It is also within close
proximity to attractions such as the Holyrood Palace, the National Gallery of Art, the National
Museum of Scotland and Arthurs Seat. The Serviced Residence offers 75 units with unit sizes
ranging from 19.0 sq m to 51.0 sq m. Facilities in the Serviced Residence include a restaurant, a
meeting room and a fitness suite.
The Hotel Managers
The Hotel Managers will provide, among others and subject to the terms of the respective hotel
management agreements, the following services for the Hotels:
management services such as the daily running and managing of the Hotels and related
activities (e.g. the management of banquet and function rooms, F&B services, laundry
services etc.);
marketing services, including the planning, preparation and conduct of marketing,
advertising, promotion, public relations, publicity and related activities for the purpose of
promoting the business and enhancing the reputation of each Hotel;
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sales and distribution activities, including signing corporate accounts, running a central
reservation system, managing a booking engine on the internet, contracting with online travel
agents and wholesalers, and signing up with a global distribution system to make the hotel
room inventory available to agents worldwide;
development of programmes and policies to maximise patronage of the facilities of each
Hotel;
collecting charges, rents and other amounts due from guests, patrons and tenants;
employing, supervising and training the hospitality employees and staff required to operate,
manage, market and maintain the Hotel in accordance with the annual budget agreed with
each Master Lessee or Tenant;
establishing the details of the refurbishment plans for each Hotel, in consultation with each
Master Lessee or Tenant;
preparing the annual business plans of the Hotels, including the annual budget and
marketing strategy;
negotiating new or renewing lease/licence agreements;
establishing the cash management and banking arrangements for the Hotels;
establishing each Hotels policy regarding its association with any credit card system; and
allowing its existing brands to be used on the Hotels.
The Serviced Residence Operators
The Serviced Residence Operators will provide, among others, the following services for the
Serviced Residences:
management services such as the daily running and managing of the Serviced Residences
and related activities (e.g. the management of meeting rooms, F&B services, laundry
services etc.);
marketing services, including the planning, preparation and conduct of marketing,
advertising, promotion, public relations, publicity and related activities for the purpose of
promoting the business and enhancing the reputation of each Serviced Residence;
sales and distribution activities, including signing corporate accounts, running a central
reservation system, managing a booking engine on the internet, contracting with online travel
agents and wholesalers, and signing up with a global distribution system to make the
serviced residence inventory available to agents worldwide;
development of programmes and policies to maximise patronage of the facilities of each
Serviced Residence;
collecting charges, rents and other amounts due from guests, patrons and tenants;
employing, supervising and training the hospitality employees and staff required to operate,
manage, market and maintain the Serviced Residences in accordance with the annual
budget agreed with each Master Lessee;
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establishing the details of the refurbishment plans for each Serviced Residence, in
consultation with each Master Lessee;
preparing the annual business plans of the Serviced Residences, including the annual
budget and marketing strategy;
negotiating new or renewed lease/licence agreements;
establishing the cash management and banking arrangements for the Serviced Residences;
establishing each Serviced Residences policy regarding its association with any credit card
system; and
allowing its existing brands to be used on the Serviced Residences.
OUTLOOK FOR THE HOSPITALITY SECTOR
All information provided in this section is extracted from Appendix E, Independent Hospitality
Industry Report. See Appendix E for further details.
According to the Independent Market Research Consultant, the key gateway cities in which the
Properties are located, namely Singapore, Sydney in Australia, London, Glasgow and Edinburgh
in the United Kingdom, Kobe in Japan, and Kuala Lumpur in Malaysia, have favourable hospitality
sector fundamentals.
Outlook for the Hospitality Sector in Singapore
Singapore is a highly industrialized economy renowned for its strong economic fundamentals and
prudent macroeconomic policies. The city is a key financial, manufacturing and services hub in
Asia. As a key commercial hub in Asia, the city attracts both global and regional corporate tourism.
In addition, Singapore has continuously improved on its tourism offering, attracting many leisure
visitors to the city.
Visitor Arrivals
In 2013, total international visitor arrivals to Singapore recorded 15.6 million, achieving a 7.4%
y-o-y growth rate over 2012, according to the Singapore Tourism Board (STB). This exceeded the
forecasts set in 2013, which targeted 14.8 to 15.5 million arrivals. Tourism receipts were recorded
at SGD 23.5 billion in 2013, meeting STBs forecast of SGD 23.5 to SGD 24.5 billion for 2013.
Moving forward, the STB is forecasting visitor arrivals to range between 16.3 million and 16.8
million in 2014, representing a y-o-y increase of about 4.7% to 7.9%. The MTI expects the next
phase of tourism growth to come through increasing visitor spend rather than visitor numbers. In
line with this, Singapore is targeting higher-yielding tourists through various marketing initiatives.
Average Length of Stay
According to the STB, approximately 24.4% of visitors stay for under one day in Singapore,
followed by 20.0% who stay for one day and 16.9% who stay for two days. The short length of stay
for majority of visitors indicates that many visitors transit through Singapore given that Singapore
Changi Airport is a major air hub with extensive flight connectivity regionally and globally.
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Between 2008 and 2012, the average length of stay has declined from 4.0 to 3.5 days. While the
average length of stay is not yet available for 2013, a reduction over recent years is possibly due
to the proliferation of the low cost carrier industry which has provided more affordable travel
options. This has encouraged repeat short-stay visitation, especially for regional travellers.
Geographic Origin
Based on the latest statistics on geographical source markets from the STB, as at the end of 2013,
Indonesia continues to be Singapores top source market, with visitor arrivals registering an
increase of 8.9% over the previous year. Mainland China recorded an 11.6% growth in 2013, and
was the second largest source market to Singapore during the year. The growth in Mainland
Chinese visitors was robust in the first three quarters of 2013 due to the strong outbound Chinese
travellers. However, from October to December 2013, Mainland Chinese visitors showed a 30.8%
y-o-y decline due to the countrys austerity measures on spending from October 2013 onwards
which had an impact on outbound travel from Mainland China.
Operating Performance
Occupancy levels of the luxury hotel market have remained relatively stable between 2011 and
YTD April 2014, achieving occupancy above 80%. This corresponds to an ADR of between SGD
397 and SGD 431. We anticipate luxury hotel trading performance in Singapore to grow in the
short term in view of the upcoming supply of upscale and luxury hotels in 2014 and 2015. Given
that the MTI expects externally-oriented sectors such as manufacturing and wholesale trade
industries to support growth in 2014, corporate demand is likely to match this growth.
Key Demand Drivers
The Singapore government remains committed to supporting the local tourism and hospitality
industry to achieve its 2015 goal of 17 million visitor arrivals, SGD 30 billion in tourist receipts and
the creation of an additional 100,000 jobs in the service sector.
Over the past six years, since the Tourism 2015 plan was put in place, the tourism landscape in
Singapore has seen many positive changes. New tourist attractions have been developed across
the island city including the Singapore Flyer, the ArtScience Museum, Gardens by the Bay and the
two integrated resorts Marina Bay Sands and Resorts World Sentosa. Singapore has also
staged many global events in recent years including the inaugural Singapore 2010 Youth Olympic
Games, Formula One SingTel Singapore Grand Prix and the Volvo Ocean Race. Future tourist
attractions include the Singapore Sports Hub at Kallang (2014); the National Art Gallery (2015);
and the development of the Jurong Lake District over the next five to ten years.
Competition
Singapores hotel inventory comprised a total of 54,962 gazetted and non-gazetted rooms in 2013
according to the STB. Approximately 10,174 rooms are anticipated to enter Singapores hotel
market between January 2014 and December 2018, excluding any proposed Government Land
Sales sites for hotels. Assuming all the proposed projects materialise from 2014 to 2018,
Singapores hotel room inventory will grow by approximately 18.5% from 54,962 rooms in January
2014 to 65,136 rooms by December 2018.
Market Outlook
International visitor arrivals to Singapore have shown a significant CAGR of 9.8% from 2003 to
2013, indicating the popularity of the city-state as a corporate and leisure destination. In 2013,
visitor arrivals to Singapore were recorded at 15.6 million, representing a 7.4% increase from
2012. In the short to medium term, the MTI expects tourism growth to come via increasing visitor
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spend instead of visitor numbers. The Singapore government continues to support the tourism
industry through various initiatives in view of its 2015 goal of 17 million visitor arrivals and SGD
30 billion in tourist receipts. Corporate demand is anticipated to remain stable in the short to
medium term as Singapore remains one of the key commercial hubs in Asia Pacific. Singapore is
also a popular MICE destination and the city was Asias Top Convention City for the 12th
consecutive year in 2013, according to the latest global rankings by the ICCA. Leisure demand is
expected to be driven by new tourism offerings in the next few years, including the upcoming
Sports Hub which has a pipeline of events lined up in 2014, for instance the BNP Paribas WTA
Finals Singapore in October 2014.
Outlook for the Hospitality Sector in Australia
Sydney
Sydney is the major gateway to Australia and a key hub for the Asia Pacific region. Famous for
its harbour, the city offers extensive shopping, entertainment and dining experiences as well as
countless surf beaches within the wider metropolitan area. Australias most populous city with
around 4.4 million residents, it is Australias financial centre and primary real estate market in
terms of quantum and value, reflected in the concentration of institutional investment in the city.
Visitor Arrivals
Sydney attracts a considerably higher proportion of international visitor nights when compared to
Australias average of 37%. In 2013, 83.8 million visitor nights were spent in Sydney Tourism
Region which represents 16.8% of all visitor nights spent in Australia, up from 14.0% in 2003.
International visitor nights accounted for 73.4% (61.5 million) and domestic nights 26.6% (22.3
million).
Average Length of Stay
According to TRA, the average length of stay for domestic and international visitors in Sydney in
2013 was 2.7 nights and 21.8 nights respectively. The high average length of stay for international
segment reflects the distance to Australia from most inbound source markets, as a long haul
destination, as well as the impact of the education segment where stays are lengthened.
Geographic Origin
Based on latest statistics from TRA, Mainland China continues to be Sydneys major inbound
source market with visitor nights registering y-o-y growth of 9.2% in 2013. Visitor nights from
Mainland China have recorded strong growth over the past decade increasing on average by
14.8% per annum, up from 2.7 million in 2003 to 10.8 million in 2013.. Mainland China has been
Sydneys major source market since 2005 although a high proportion of this visitor night demand
is education related.
Operating Performance
Over the past ten years, Sydney City accommodation market has recorded modest revenue per
available room (RevPAR) growth averaging 5.1% per annum. Benign increases in supply have
been offset by strengthening and occupancy levels have increased, up from 72.2% in 2002 to
84.6% in 2012. Occupancy levels peaked in 2011 at 85.8% but have declined marginally over the
past year. Room rates have also increased at an average rate of 3.4% per annum over the past
decade and 6.7% over the past three years.
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Key Demand Drivers
Sydney is the major gateway to Australia and a key hub for the Asia Pacific region. It is Australias
financial centre and primary real estate market in terms of quantum and value, reflected in the
concentration of institutional investment in the city.
There are several major projects under construction and proposed in Sydney City which will
increase the appeal of the city as a tourist destination. However, the city stands to benefit most
from the Barangaroo redevelopment (East Darling Harbour) as it will change the dynamics of the
city by extending and improving the amenability of the Darling Harbour precinct, as well as
increasing commercial office space. The New South Wales government has also given Crown
Limited the approval to go to the next stage in developing Crown Sydney at Barangaroo. The
project is expected to open in 2019.
In addition, plans for a new Sydney International Convention, Exhibition & Entertainment Precinct
(SICEEP) are underway. Planning consent was granted for new world-class convention, exhibition
and entertainment facilities and improved public spaces at Darling Harbour, as part of the NSW
Governments vision to revitalise the area and representing a landmark project for Sydney. The
current conference and exhibition facilities will close in December 2013 with construction of the
new buildings commencing early in 2014. The new facilities will be completed in 2016. A
temporary facility will be constructed at Glebe Island in time for the 2014 exhibition season.
Competition
Sydney City is the largest accommodation centre in Australia with 116 establishments with 20,292
rooms as at the end of June 2013.
We have also identified two proposed projects thought likely to commence in the short term
including the conversion of an office building into a 3-star hotel (282 rooms) and a 60-room 4-star
boutique hotel located in the Frasers Central Park development which are proposed to be
completed by 2015. Star categories are approximations with the final classification to be decided
upon opening.Other medium term major projects will be underpinned by the development of
associated convention infrastructure.
Market Outlook
As Australias major gateway, Sydney attracts a high proportion of international visitors when
compared to the Australian average. The city also boasts a large domestic visitor segment, being
both the primary corporate centre in Australia and key leisure destination. This broad demand
base will therefore underpin the citys hotel and tourism market in the coming years.
With few accommodation projects currently under construction in Sydney City, the outlook
remains promising following the recovery which has been evident over the past three years. In
2013, real RevPAR is projected to surpass the 2007-peak as occupancy levels remain robust and
ADR growth strengthens in line with the benign supply outlook and a more stable demand
environment.
Major infrastructure projects such as the Barangaroo urban renewal project and the development
of the Sydney International Convention and Exhibition Precinct will provide an added boost to the
market over the medium to long term. This is also likely to change the city dynamics with a shift
towards the western corridor in Sydney.
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Outlook for the Hospitality Sector in the United Kingdom
The United Kingdom (UK) economy is one of the largest in the world, ranking sixth globally and
is also one of the most accommodating places in the world to do business.
In April 2014, the IMF announced that the UK economy will be the fastest growing this year of the
G7 countries. This is alongside low inflation and falling unemployment.
London
In addition to being one of the worlds leading financial centres, London has strengths in the arts,
education, fashion, financial services, media and tourism industries, all contributing to the citys
global economic prominence as well as driving substantial corporate demand.
London is also home to some of the worlds most famous sporting, cultural and entertainment
venues, supporting major events in the city and enabling London to be one of the most visited
cities in the world.
Visitor Arrivals
2012 and 2013 were both record years for London, with visitor arrivals reaching an all time high
of 29.1 million in 2013, reflecting a y-o-y increase of 5.4%. Bed nights also showed a positive trend
in 2013 and increased by 2.4% to a record of 124.9 million. In 2013, international arrivals totalled
16.8 million, a strong increase of 8.5% compared to the previous year. 2013 recorded the highest
number of international visitors during the 10-year period, the previous peak being 2006 with 15.6
million visitors. Domestic visitors totalled 12.3 million in 2013, a 1.3% increase on 2012.
Average Length of Stay
In 2013 the average international stay was 5.8 days, a 4.9% decrease compared to 2012 and still
below the peak of 6.8 days recorded during the period in 2003. The average length of stay for
domestic visitors was 2.2 days in 2013, compared to 1.7 days the previous year. The average stay
for domestic guests has ranged between one and two days from 2003 to 2013.
Geographic Origin
The United States of America (USA) continues to be the largest source of international visitors to
London (10.6% market share), despite decreasing 8.2% from 11.2 million visitor nights in 2012 to
10.3 million visitor nights in 2013. Other major source markets in terms of visitor nights include
France with a 7.7% market share, Germany (6.2%) and Italy (6.1%).
Operating Performance
Hotel occupancy has increased from 75.3% in 2004 to 82.4% in 2013. Room rates have also
increased a CAGR of 4.1% since 2004, up from 96 to 138 in 2013.Serviced apartments in
London post an average weekly rate of about 900 to 1,000, with occupancy usually recorded
around 85.0%.
Key Demand Drivers
The city is home to some of the worlds most iconic tourist sites including Big Ben, the Houses of
Parliament, Trafalgar Square and the London Eye. In addition, the city has a large number of
museums and art galleries, including the British Museum (currently the most visited attraction in
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the UK), the Natural History Museum, the National Gallery and the Tate Modern. Furthermore,
London has some world-class parks and open spaces that include Hyde Park, Regents Park and
St. Jamess Park.
These elements combine to create a world-class internationally renowned tourist destination and
the London Development Authority (LDA) has plans to expand Londons tourism product even
further through the London Tourism Action Plan.
Competition
As at November 2013, the graded hotel supply in London comprised more than 1,378 hotels with
a total of 131,116 rooms. Despite major developments in the budget sector, the London market
remains dominated by 4-star room supply (around 37%). Hotel development in the capital is set
to remain buoyant for the remainder of 2014. If all planned hotel developments are realised, hotel
supply in London will increase by a total of 15,479 rooms over the next three years, a growth of
9.1% on current supply.
As at May 2014, there are 180 serviced apartment properties located across London, representing
a supply of 8,991 units. The vast majority of these are owner-operated, comprising over 75%
market share. There are currently 12 confirmed serviced apartment projects with a total of 1,294
units in the development pipeline. If all projects are realised by the end of 2017, serviced
accommodation supply is expected to increase 14.4%.
Market Outlook
In the short-run the tourism outlook is positive, especially with recent plans to ease visa
requirements for Chinese visitors. The UK government plans on trebling the number of Chinese
visitors coming to the UK by 2015. Visit Britain also forecasts a strong growth in international
tourist arrivals in 2014, particularly from emerging European source markets such as Russia,
Poland and the Baltic states.
Demand for the UK capital continues to be one of the highest of any city in Europe and there is
a very large room pipeline as a result, particularly in the budget and midscale segments. This new
supply will likely create a cap on rates that can be charged by hoteliers in these segments,
however this will improve as the global economy continues to recover and we see a strengthening
in foreign travel, particularly from developing and emerging markets such as Mainland China and
Brazil.
Glasgow
Situated in the central belt of Scotland on the west coast, Glasgow is the commercial capital and
the largest city in Scotland with a total population of approximately 600,000. In recent years,
Glasgow has moved from a post-industrial city to an economically regenerated city. Glasgow is
also Europes fastest growing conference destination with the Scottish Exhibition and Conference
Centre (SECC) becoming increasingly popular for major exhibitions and events.
Visitor Arrivals
According to the latest annual international tourist arrivals statistics from Visit Scotland, the total
number of arrivals to the city of Glasgow reached 515,000 in 2013, 1.2% down on the prior
year.Glasgows tourism is highly dependent on domestic visitors, which represents approximately
76.7% of total arrivals in 2013.
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Average Length of Stay
Approximately 80% of domestic visitors stay between one and three nights in Glasgow and an
estimated 10% of domestic visitors stay between four and seven nights. As compared to Scotland,
an estimated 65% of domestic visitors stay for one to three nights while a larger proportion of 25%
stay for four to seven nights. The average trip duration for overseas tourists was 6.1 days as
compared with domestic tourists which was recorded at 2.1 days.
Geographic Origin
The key tourism source markets for Glasgow in 2011 includes Germany, the USA, Canada, France
and Spain comprising a total of 50.0% of all arrivals to the city. Germany is the top source market
to Glasgow, with a 15.0% market share, increasing by 4.0 percentage points from the prior year.
The USA followed closely behind at 14.0% at a similar rate of increase.
Operating Performance
Despite continued growth in hotel supply, hoteliers in Glasgow reported excellent performance in
2013. RevPAR increased by a notable 6.7% y-o-y, driven by a 3.6% increase in occupancy and
3.0% rise in ADR.
Key Demand Drivers
Situated in the central belt of Scotland on the west coast, Glasgow is the commercial capital and
the largest city in Scotland. The city has the second largest shopping centre in the UK after
London. In recent years, Glasgow has moved from a post-industrial city to an economically
regenerated city. Major regeneration projects include the Glasgow Harbour projects, Queens Dock
2 project and developments of several shopping centres.
Glasgow is also Europes fastest growing conference destination with the Scottish Exhibition and
Conference Centre (SECC) becoming increasingly popular for major exhibitions and events. The
new SSE Hydro Arena, which opened on 30 September 2013, will be a significant demand driver
for the SECC, which will fundamentally increase the activity within the SECC campus. In addition,
the completion of the SSE Hydro Arena provides Glasgow with a state-of-the-art concert venue.
In anticipation of the Commonwealth Games in summer 2014, Glasgow has been put in the
international spotlight. The Year of Homecoming and Ryder Cup in 2014 are also major events set
to contribute to the Scottish economy over the coming 18 months driving increases in domestic
tourism, further supported by substantial infrastructure improvements ahead of the 2014
Commonwealth Games.
Competition
The Glasgow hotel market currently offers 83 graded hotels and 7,312 graded hotel rooms. Hotel
supply is concentrated in the mid-market segment (27% of total supply), with the budget and
four-star segments representing a further 19% and 21% of supply respectively. There are only two
five-star hotels present in the city. Hotel development in Glasgow continues to attract new brands
into the market. Of the 49 hotels in the Glasgow pipeline, 39% are on hold and 47% are
speculative/unconfirmed according to hotel supply database AM:PM.
As at October 2013, there are 10 serviced apartment properties located across Glasgow,
representing a supply of 307 units. The vast majority of these are owner-operated, comprising
over 80% market share. At present there is only one proposed serviced apartment in Glasgow.
244
Market Outlook
The upcoming 2014 Commonwealth Games, Ryder Cup and Homecoming year are likely to drive
additional arrivals to the city. The significant regeneration schemes (completed and underway) in
advance of the Commonwealth Games will benefit demand levels at hotels well beyond the event
itself. Infrastructure improvements, new shopping and leisure space will add to the overall
attractiveness of Glasgow as a tourist destination, strengthen its position as a gateway to
Scotland and ultimately, boost occupancy levels at hotels in the city.
Despite a large hotel pipeline (relative to existing supply), occupancy growth is likely to remain
steady in the medium-long term due to increased tourism demand generated during and after the
2014 Commonwealth Games.
Edinburgh
Edinburgh is one of the UKs main tourist destinations, offering a vast number of cultural sites,
summer festivals and golf facilities. Furthermore, the city has started to develop itself as a popular
business and event destination, whilst tourism is also an important economic foundation of the
city. As Edinburgh is a World Heritage Site, tourists come to visit historic sites such as Edinburgh
Castle, the Palace of Holyrood House and the Georgian New Town.
Visitor Arrivals
In 2013, overall visitor arrivals to Edinburgh reached 1.3 million, recording a 4.4% decline over the
prior year. The city has recorded a CAGR of 1.8% over the last five years. In 2013, international
tourist arrivals represented 35.5% of all visits.
Average Length of Stay
The average length of stay in Edinburgh is two nights for UK visitors and four nights for
international visitors.
Geographic Origin
The USA remains Edinburghs largest single international source market for visitors at 16% in
2011, reporting an approximate 50% growth over the prior year. Germany follows closely behind,
and with 174,000 visitors secures a 13% share.
Operating Performance
Performance over 2013 indicates a return of any loss in demand during 2012. RevPAR increased
by a notable 14.7%, as hotels in most prime locations benefit from enhanced demand to the city.
Results were achieved following an increase of 5.9% in occupancy and 8.3% in ADR, despite the
recent additions in hotel supply.
Key Demand Drivers
Tourism is an important economic foundation of the city. As Edinburgh is a UNESCO World
Heritage Site, tourists come to visit historic sites such as Edinburgh Castle (named the top UK
Heritage Attraction for the third year running in the 2013 British Travel Awards), the Palace of
Holyrood House and the Georgian New Town. Other popular attractions in Edinburgh are the
National Gallery of Scotland, the Royal Museum, the Museum of Scotland and the Royal Botanic
Gardens.
245
The city also attracts a healthy number of business visitors every year. The International Congress
and Convention Association (ICCA) ranked Edinburgh second in the UK and 33rd in the world for
the number of international association meetings held.
Competition
According to hotel supply database AM:PM, Edinburgh comprised 187 graded hotels and serviced
apartments with a total of more than 12,413 rooms as at YTD June 2014. The accommodation
market is well balanced across all quality levels, although the 3-and 4-star segments account for
a slightly larger share. 5-star hotels make up around 8% of total keys and serviced apartments
with the least at 7% of total keys. Hotel development in the Scottish capital is set to remain
buoyant during 2014 and beyond.
As at May 2014, there are 26 serviced apartment properties located across Edinburgh,
representing a supply of 820 units. The vast majority of these are independently operated, with
70% of operators having only one serviced property.There are currently ten confirmed serviced
apartment projects with a total of 804 units in the development pipeline. If all projects are realised
by the end of 2016, serviced accommodation supply is expected to increase by 38%. However, all
but one of the pipeline projects are currently on hold/speculative.
Market Outlook
Performance in 2013 indicates a return of any loss in demand during 2012. RevPAR increased by
a notable 14.6%, as hotels in most prime locations benefit from enhanced demand to the city.
Results were achieved following an increase of 4.3% in occupancy and 8.3% in ADR, despite the
recent additions in hotel supply. In 2014, we expect to see continued growth on trading figures
backed by the arrival of the Ryder Cup, Homecoming Year and Commonwealth Games.
Outlook for the Hospitality Sector in Kobe, Japan
Kobe is the capital of Hyogo Prefecture, located near the centre of Japan, in the Kansai region on
Honshu Island. It is the fifth largest city in Japan having 1.54 million residents as of October 2013.
As one of the core cities in the Kansai region, Kobe is recognised as a business hub both
domestically and globally. The city has an extensive transportation network of air, sea and land
routes, enabling convenient accessibility.
International Visitor Arrivals
According to statistics from the Japan Tourism Agency, the total number of international
accommodation guests recorded a 46% year-on-year increase in 2013. Domestic visitors form the
bulk of visitor arrivals to Hyogo Prefecture, accounting for 96.3% of total accommodation guests
in Hyogo Prefecture in 2013. In 2013, the number of domestic accommodation guests to Hyogo
Prefecture was recorded at 12.6 million, a 4.8% increase over the previous year.
Geographic Origin
Since 2012, Taiwan has overtaken South Korea and Mainland China, becoming Hyogo
Prefectures top inbound source market. The first direct flight connecting Taipei and Kansai
International Airport was available from June 2012 and boosted visitation from Taiwan. In 2013,
visitor arrivals from Taiwan accounted for 29.1% of total international accommodation guests,
followed by 16.1% from South Korea and 11.9% from Hong Kong. Mainland Chinese
accommodation guests comprise of 10.9% and are the fourth largest international market to
Hyogo Prefecture.
246
Operating Performance
Occupancy levels have seen an improvement in 2012, reaching 73.5% as at YTD April 2014 due
to the economic recovery. Hotels in Kobe showed limited growth in ADR as occupancy levels are
still at a moderate level between 70% and 75%. As at YTD April 2014, ADR of upscale full-service
hotels was recorded at JPY 11,993, corresponding to an increase of 1.6% over the same period
in 2013.
Key Demand Drivers
Kobes tourist attractions are located throughout the city, with a higher concentration in the
Sannomiya/Motomachi, Kitano and Kobe Bay area. Leisure demand to these areas is typically
higher. Kobe is conveniently accessible by train or car from Osaka, Kyoto and Nara which are
major tourism destinations. Many tourists combine the above-mentioned destinations with Kobe.
Kobe also has a number of global and domestic companies which generate corporate demand to
the city. These include Procter & Gamble, Nestle, Kawasaki Heavy Industries, Asahi Holdings and
K Line Group which has established headquarters in Kobe.
In addition, MICE events held in Kobe are also key demand drivers. According to Japan National
Tourism Organization (JNTO), Kobe was the sixth largest host of events since 2010. A total of 92
meetings were held in 2012, in which the majority were meetings related to biomedical innovation.
The Kobe Biomedical Innovation Cluster (KBIC) has been planned in Port Island (Bay area) for 15
years. Kobe city promotes Port Island to become a centre of medical technology and 17 research
and development facilities have already been constructed around Iryo Centre station. A cancer
medical centre is still in construction process. In cooperation with more than 200 companies, KBIC
will be one of the major national projects that also contribute to higher performance of hotels in
the surroundings.
Competition
The number of existing hotel rooms supply saw a gradual increase from 2007 to 2013. In 2013,
there were 127 hotels with 12,809 rooms in Kobe according to the Japan Ministry of Health,
Labour and Welfare. The following table summarises the major projected hotel openings,
reflecting limited openings in the next few years.
Hotel Name (Developer) Timing Location Hotel Type No. of Rooms
La Suite Nov-15 Kobe Bay Full-Service 88
Unizo Inn Kobe Sannomiya
(TBD)
Spring
2016
Sannomiya Limited-Service TBD
TBD (Resort Trust) TBD Rokko TBD TBD
TBD (Lominous Hotel) TBD Kobe TBD TBD
Market Outlook
The Kobe hotel market, which is mainly reliant on domestic tourism, is stable compared to other
cities in Japan. Around a quarter of total inbound tourism visiting Kobe stay for one night with a
vast majority undertaking single day trips. Inbound international tourism is limited compared to
neighbouring prefectures Osaka and Kyoto; however statistics have shown that international
arrivals have increased, recording a 46.2% year-on-year growth in 2013. Based on improving
economic fundamentals, it is expected that corporate travel will continue to record steady medium
term growth.
247
Marketwide performance is expected to improve over the next few years underpinned by
strengthening economic fundamentals. An increasing number of international MICE events will
further drive the number of inbound tourists from offshore, and therefore room demand.
The city is aiming to attract one million international visitors and 100 conferences by 2015. The
plan is mainly focussed on establishing Kobe as an international destination for leisure and
business, developing the city as a MICE destination and promoting Kobe as a leisure destination.
Outlook for the Hospitality Sector in Kuala Lumpur, Malaysia
Kuala Lumpur is the cultural, financial and economic centre of Malaysia. Leisure tourism is driven
by the citys cultural diversity, strong retail offering and lower cost accommodation (when
compared to other key gateway cities in Asia). The city essentially operates as a corporate market
with solid weekday business whilst capturing a higher level of leisure tourists on weekends.
Visitor Arrivals
According to the Malaysia Tourism Board, international visitor arrivals to Malaysia recorded 25.7
million in 2013, representing growth of 2.7% year-on-year (which is a similar rate of growth for
Kuala Lumpur).
Geographic Origin
Major source markets comprise Singapore, Indonesia and Mainland China although the
Independent Market Research Consultant believes that Kuala Lumpur attracts a larger share of
visitors from Europe and the Americas compared to the rest of the country.
Operating Performance
After declining significantly during 2009 due to the global financial crisis, the Kuala Lumpur luxury
market has rebounded back to pre-crisis levels although the rate of growth has stagnated in recent
years. As of YTD April 2014, ADR rose by 6.8% from MYR398 to MYR425 whilst occupancy
increased by 2.3 percentage points to reach 78.3%. As a result, RevPAR increased from MYR304
to reach MYR332 representing growth of 9.3%.
Key Demand Drivers
Malaysia is continuing to target the lucrative MICE segment, which is expected to grow through
newly introduced financial incentives targeted at planners and organisers and construction of new
infrastructure. The Malaysian Convention and Exhibition Bureau (MyCEB) is competing for
high-profile international conventions with a specific focus on health and medical care, science
and technology, education and energy (oil and gas). Additionally, Malaysia currently has the most
exhibition hall space of any country in Southeast Asia (which includes Indonesia, Thailand and
Singapore) with most of the space concentrated in Kuala Lumpur.
Kuala Lumpur also remains as a prime shopping destination due to its large concentration of malls
and the entry of many new international brands, such as H&M, Ralph Lauren and Armani Jeans.
248
Competition
As at the end of 2013, there were an estimated 41,160 rooms in Kuala Lumpur.
Approximately 3,300 rooms are expected to enter Kuala Lumpurs hotel supply by the end of 2018.
The new rooms slated to enter the market over the next few years represents a CAGR of 1.5%
during this period.
Market Outlook
The growth in visitor arrivals from Indonesia and Mainland China remain promising as other
traditional source markets, such as Singapore and Thailand, decline. Ultimately, improved trading
performance in the luxury sector is dependent on growth in corporate demand, which leads back
to demand for office space in Kuala Lumpur. The city appears able to absorb more office demand
with a strong new supply pipeline.
In the short to medium term, Kuala Lumpur could face an oversupply of new hotel rooms in the
upscale and luxury sectors given the large pipeline of development. Encouragingly, the Malaysian
government remains committed to promoting the city as a key MICE market which is expected to
drive inbound corporate travel over the coming years. This promotion of Kuala Lumpur will
continue to lift demand along with the growth of its LCC network, which will further develop Kuala
Lumpur as a global tourism and aviation hub.
Kuala Lumpur remains a competitive destination to travel to within the Southeast Asian region.
The country faces few domestic economic issues as it benefits from low inflation and
unemployment rates, a rising level of domestic consumption and better infrastructure. The
re-election of the ruling party also ensures political stability in the medium term. Investor
sentiment towards Kuala Lumpur should remain healthy amongst strategic investors looking to set
a foothold in Malaysia.
249
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257
OPERATIONAL DATA OF THE INITIAL PORTFOLIO
Operational Data of the Hotels
The ADR, occupancy rate and RevPAR of the Hotels for FY2011, FY2012 and FY2013 are set out
below.
Hotel
Currency
ADR
FY2011 FY2012 FY2013
InterContinental Singapore SGD 293 304 299
Novotel Rockford Darling Harbour AUD 151 155 164
Park International London
(1)
GBP 88 113 100
Best Western Cromwell London GBP 93 89 86
ANA Crowne Plaza Kobe JPY 11,429 11,193 11,530
The Westin Kuala Lumpur MYR 445 465 473
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
Hotel
Occupancy Rate (%)
FY2011 FY2012 FY2013
InterContinental Singapore 82 90 88
Novotel Rockford Darling Harbour 88 88 90
Park International London
(1)
43 59 70
Best Western Cromwell London 73 78 80
ANA Crowne Plaza Kobe 76 77 77
The Westin Kuala Lumpur 72 77 79
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
Hotel
Currency
RevPAR
FY2011 FY2012 FY2013
InterContinental Singapore SGD 241 272 263
Novotel Rockford Darling Harbour AUD 133 137 147
Park International London
(1)
GBP 38 67 70
Best Western Cromwell London GBP 68 69 69
ANA Crowne Plaza Kobe JPY 8,686 8,589 8,865
The Westin Kuala Lumpur MYR 322 356 374
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
258
Guest Profile of the Hotels
The following charts set out a breakdown of the guest profile of the Hotels by market segment and
country of origin as of FY2013.
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
(1)
MICE
7.2%
Aircrew
3.2%
Corporate and
Government
19.6%
Retail /
Leisure /
Transient
50.0%
Wholesale
9.3%
Other
10.7%
Europe
11.9%
North
America
8.0%
South
America
1.5%
Africa and
Middle East
3.4%
North and
North East
Asia
37.5%
South Asia
1.3%
South East
Asia
16.7%
Oceania
17.6%
Others,
2.1%
Note:
(1) Excludes Best Western Cromwell London as that property does not collect data on room nights by geography.
Operational Data of the Serviced Residences
The ADR, occupancy rate and RevPAR for the Serviced Residences for FY2011, FY2012 and
FY2013 are set out below.
Serviced Residence
Currency
ADR
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
SGD 271 307 327
Fraser Suites Sydney AUD 210 214 226
Fraser Place Canary Wharf
(2)
GBP 151 156 147
Fraser Suites Queens Gate
(3)
GBP
(4)
133 150
Fraser Suites Glasgow
(5)
GBP 69 62 67
Fraser Suites Edinburgh GBP 101 95 104
Serviced Residence
Occupancy Rate (%)
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
84 55 82
Fraser Suites Sydney 88 88 89
Fraser Place Canary Wharf
(2)
89 80 80
Fraser Suites Queens Gate
(3)
(4)
81 11
Fraser Suites Glasgow
(5)
70 73 78
Fraser Suites Edinburgh 74 81 84
259
Serviced Residence
Currency
RevPAR
FY2011 FY2012 FY2013
Fraser Suites Singapore
(1)
SGD 228 168 267
Fraser Suites Sydney AUD 184 188 201
Fraser Place Canary Wharf
(2)
GBP 134 125 118
Fraser Suites Queens Gate
(3)
GBP
(4)
108 17
Fraser Suites Glasgow
(5)
GBP 48 45 52
Fraser Suites Edinburgh GBP 75 77 87
Notes:
(1) Fraser Suites Singapore was partially closed in FY2012 for renovation.
(2) Fraser Place Canary Wharf was partially closed in FY2012 for renovation.
(3) Fraser Suites Queens Gate was closed in FY2013 for renovation.
(4) Fraser Suites Queens Gate was acquired in December 2011 and accordingly, there are no comparative results of
its operations for FY2011.
(5) Fraser Suites Glasgow was partially closed from August 2012 to March 2013 for renovation.
Guest Profile of the Serviced Residences
The following charts set out a breakdown of the guest profile of the Serviced Residences by
market segment and country of origin as of FY2013.
Guest Profile of the Serviced Residences by Market Segment as of FY2013
Corporate and
Government
57.0%
Leisure
34.8%
Groups
8.2%
Guest Profile of the Serviced Residences by Country of Origin as of FY2013
Europe 29.6%
North America
10.1%
North Asia 6.3%
South Asia
5.1%
South East Asia
9.5%
Oceania
27.9%
Others
11.5%
260
Length of Stay Profile for the Serviced Residences
The leases or licenses entered into for the serviced residence units in the Serviced Residences
may be for a week or up to several years. In line with normal commercial practice, renewals are
generally on the same terms and conditions as the original lease/licence agreements except for
the rental rate, which will be revised to the prevailing market rate.
The following chart sets out the length of stay profile of the Serviced Residences on a portfolio
basis, in terms of rental income generated from the serviced residence units for FY2013.
Length of Stay Profile for the Serviced Residences
Less than 1
month
57.0%
1 to Less than 6
months
24.6%
6 to Less than
12 months
9.7%
More than 12
months
8.7%
INTERCONTINENTAL SINGAPORE
80 Middle Road, Singapore 188966
Description
InterContinental Singapore is a Peranakan-style landmark hotel with 406 guest rooms, comprising
387 hotel rooms and 19 suites. The 16-storey Hotel is located in the Bugis district and is in close
proximity to the Suntec Singapore International Convention & Exhibition Centre and the Marina
Bay precinct and attractions such as Haji Lane, the National Museum of Singapore, the Peranakan
Museum and the Chinatown Heritage Centre. The Hotel is linked to Bugis Junction, a prime
shopping mall popular with locals and tourists which is located above the Bugis MRT station and
offers convenient access to the CBD and the Orchard Road shopping and entertainment district.
The Hotels strategic location allows it to capture demand from both business and leisure
travellers. The Hotel has undergone various renovation and refurbishment works since 2008,
where the new Club InterContinental was established on level two of the Hotel and the
refurbishment of Man Fu Yuan Chinese Restaurant and the renovation of 65 shophouse rooms
and suites were completed.
InterContinental Singapore offers a variety of room options ranging from Deluxe rooms each
measuring 38.0 sq m to the Presidential suite measuring 282.0 sq m. The guest rooms are
equipped with amenities such as wireless and wired internet service, cable/satellite television, a
mini-bar and individually controlled air-conditioning. Guests staying in the suites and executive
rooms enjoy exclusive access to Club InterContinental with privileges such as a high bandwidth
internet connection and use of the Hotels boardroom.
261
Room Type Size (sq m) Room Count
Deluxe 38.0 232
Premier 52.0 42
Shophouse Room 38.0 65
Shophouse Suite 55.0 12
Club 38.0 48
Executive Suite 129.0 2
Ambassador Suite 114.0 4
Presidential Suite 282.0 1
Total 406
The following table sets out some of the notable awards and accolades which the Hotel has
received.
Year Description of Award Awarder
2013 Singapores Leading Meetings & Conference
Hotel
World Travel Awards
2013 Patron of Heritage National Heritage Board
2013 Forbes Travel Guide Recommended Hotel Forbes Travel Guide
2013 Certificate of Excellence TripAdvisor
2013 Travellers Choice Awards for Top 25 Hotel,
Top 25 Luxury Hotel and Top 25 Best Service
Hotel
TripAdvisor
Meeting and Conference Facilities
InterContinental Singapore has 13 meeting rooms with a total meeting space of 1080.0 sq m. The
following table sets out the size and capacity of the meeting and conference facilities in the Hotel.
Venue Size (sq m) Capacity
(1)
Ballroom I 180.0 140
Ballroom II 180.0 140
Ballroom III 180.0 140
Bugis Grand Ballroom 546.0 600
Karimata 43.0 30
Malacca 58.0 40
Malacca Rooms 163.0 120
Sunda 62.0 40
The Board Room 32.0 12
(2)
The Bugis Vault 216.0 90
Vault I 46.0 25
Vault II 48.0 32
Vault III 72.0 50
Notes:
(1) Based on a theatre setting. Capacity will differ based on the type of setting used and is not limited to the commonly
used setting that this table is based on.
(2) Based on a boardroom setting.
262
F&B Facilities
Olive Tree is an all-day dining restaurant located at the lobby level of the Hotel and features an
extensive buffet selection serving daily lunch and dinner as well as an a la carte menu. It has a
capacity of 144 persons.
Chikuyotei is a fine-dining Japanese restaurant and serves a variety of authentic Japanese
cuisine for lunch and dinner. It has a capacity of 88 persons.
Man Fu Yuan is an award-winning Chinese restaurant which serves classic Cantonese cuisine in
an elegant and contemporary setting. The restaurant serves lunch and dinner and features an
extensive menu of signature dishes, dim sum and other specialities. It has a capacity of 172
persons.
In addition to the three restaurants, the Hotel has a Lobby Lounge which features a Peranakan
setting and offers afternoon tea in the day. There are also live piano performances in the Lobby
Lounge at night. There is also the Victoria Bar which is presented in an English pub-style setting
and offers a wide selection of boutique beers and whiskies.
Recreational and Other Facilities
InterContinental Singapore offers a wide range of recreational and business facilities, including a
rooftop garden, an outdoor swimming pool, a 24-hour health and fitness centre and a 24-hour
business centre.
Summary of Selected Information
The table below sets out a summary of selected information on InterContinental Singapore.
Market Segment Luxury
Leasehold Tenure
(1)
Leasehold of 75 years commencing from
Listing Date
Approximate GFA (sq m) 49,987
Number of Available Rooms 406
RevPAR (FY2013) SGD263
Appraised Value by Colliers
(as at 31 December 2013) (million)
SGD457.0
SGD465.0
(with payment top-up arrangement)
Appraised Value by CBRE
(as at 31 December 2013) (million)
SGD490.0
SGD497.5
(with payment top-up arrangement)
Master Lessee BCH Hotel Investment Pte Ltd
Note:
(1) This refers to the length of leasehold title acquired by FH-REIT (directly or indirectly) under the relevant Sale and
Purchase Agreement.
263
Operating Statistics
The following charts show certain information on the operations of InterContinental Singapore,
including the occupancy rate, the RevPAR and the Average Daily Rate of the Hotel for FY2011,
FY2012 and FY2013, and a breakdown of the guest profile of the Hotel by market segment and
country of origin.
Occupancy Rate of the Hotel
RevPAR and Average Daily Rate
of the Hotel
82.0%
90.0%
88.0%
FY11 FY12 FY13
293.0
304.0 299.0
241.0
272.0
263.0
0
100
200
300
400
FY11 FY12 FY13
ADR RevPAR
(SGD)
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
MICE 9.8%
Corporate
and
Government
33.6%
Retail /
Leisure /
Transient
43.7%
Wholesale
6.8%
Other 6.1%
Europe
17.0%
North
America
17.4%
South
America
0.8%
Africa and
Middle East
3.8% North and
North East
Asia 18.7%
South Asia
2.3%
South East
Asia 22.1%
Oceania
15.4%
Others 2.5%
NOVOTEL ROCKFORD DARLING HARBOUR
17 Little Pier Street, Darling Harbour, NSW 2000, Australia
Description
Novotel Rockford Darling Harbour is a contemporary hotel with 230 guest rooms. It is located in
the vibrant district of Sydneys Darling Harbour and is adjacent to the Sydney Entertainment
Centre and the Sydney Convention and Exhibition Centre. It is in close proximity to the shops,
museums, restaurants and attractions of Darling Harbour and offers convenient access to the
airport.
The eight-storey Hotel is sited within the fast-growing south-west region of Sydneys CBD and
opposite Chinatown and the Chinese Gardens. The Hotel renovated 64 guest rooms in 2007.
264
Novotel Rockford Darling Harbour offers room options ranging from standard twin rooms each
measuring 24.6 sq m to deluxe king rooms each measuring 26.2 sq m. The guest rooms are
equipped with amenities such as a mini-bar and tea/coffee-making facilities. The Deluxe King
Rooms offer guests with views of the Chinese gardens and the skyline, as well as amenities such
as free wireless internet.
Room Type Size (sq m) Room Count
Deluxe King 26.2 64
Superior King 26.2 55
Standard King 24.6 59
Standard Twin 24.6 49
Superior Disabled Double 26.2 3
Total 230
The following table sets out some of the notable awards and accolades which the Hotel has
received.
Year Description of Award Awarder
2012 Top Spot to Indulge Your Inner Foodie in Australia Hotel Club Awards
Meeting and Conference Facilities
Novotel Rockford Darling Harbour has five meeting rooms with a total meeting space of 441.0 sq
m. The following table sets out the size and capacity of the meeting and conference facilities in
the Hotel.
Venue Size (sq m) Capacity
(1)
Darling Harbour Room 168.0 110
Pyrmont Bay Room 46.0 36
Cockle Bay Room 33.0 30
Little Pier Room 1 & 2 92.0 80
Little Pier Room 1 46.0 40
Little Pier Room 2 46.0 40
Note:
(1) Based on a theatre setting. Capacity will differ based on the type of setting used and is not limited to the commonly
used setting that this table is based on.
F&B Facilities
The Pumphouse Bar & Restaurant is housed in a refurbished heritage-listed building and serves
lunch and dinner, with a capacity of 417 persons. The Pumphouse Bar & Restaurant features an
outdoor terrace, ottoman-style seating areas and an open kitchen with authentic wood-fired pizzas
and modern Australian cuisine.
The Brew Caf is located in the Hotels lobby and provides the setting for corporate lunches, small
business meetings and private functions. Ceezens is a restaurant located next to the lobby lounge
on the Hotels ground floor and is open for breakfast daily.
265
Recreational and Other Facilities
Novotel Rockford Darling Harbour offers a gymnasium, an indoor lap pool and a business centre.
Summary of Selected Information
The table below sets out a summary of selected information on Novotel Rockford Darling Harbour.
Market Segment Mid-scale
Leasehold Tenure
(1)
Leasehold of 84 years commencing from
Listing Date
Approximate GFA (sq m) 12,128
Number of Available Rooms 230
RevPAR (FY2013) AUD147
Appraised Value by Colliers
(as at 31 March 2014) (million)
AUD68.0
Appraised Value by JLL
(as at 31 March 2014) (million)
AUD66.0
Master Lessee Viewgrand Trust C
Note:
(1) This refers to the length of leasehold title acquired by FH-REIT (directly or indirectly) under the relevant Sale and
Purchase Agreement.
Operating Statistics
The following charts show certain information on the operations of Novotel Rockford Darling
Harbour, including the occupancy rate, the RevPAR and the Average Daily Rate of the Hotel for
FY2011, FY2012 and FY2013, and a breakdown of the guest profile of the Hotel by market
segment and country of origin.
Occupancy Rate of the Hotel
RevPAR and Average Daily Rate
of the Hotel
88.0% 88.0%
90.0%
FY11 FY12 FY13
151.0
155.0
164.0
133.0
137.0
147.0
0
100
200
FY11 FY12 FY13
ADR RevPAR
(AUD)
266
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
MICE 9.0%
Aircrew
16.2%
Corporate
and
Government
12.6%
Retail /
Leisure /
Transient
39.2%
Wholesale
5.4%
Other 17.6%
Europe 4.5%
North America
1.8%
South America
6.7%
North and North East
Asia, 2.0%
South Asia
0.7%
South East
Asia 1.9%
Oceania,
82.4%
PARK INTERNATIONAL LONDON
117-129 Cromwell Road, South Kensington, London, SW7 4DS, United Kingdom
Description
Park International London is an elegant hotel with 171 guest rooms. It is set in a Victorian-style
building and is located in the heart of Kensington and Chelsea. It is within close proximity of
Londons leading tourist attractions such as the Natural History Museum, the Royal Albert Hall,
South Kensington, and Earls Court Exhibition Centre. The Gloucester Road Tube Station is also
nearby. The Hotels strategic location allows it to capture demand from both business and leisure
travellers.
The Hotel underwent a GBP16.5 million extensive refurbishment from 2010 to 2012, connecting
all the seven townhouses and was renamed Park International London upon completion of the
refurbishment. All guest rooms and public areas were refurbished. New public areas created
include a new reception area, breakfast area and the Checkmate Bar and Restaurant.
The Hotel comprises six storeys and features three separate designs. The fifth storey features a
cottage collection design where all guest rooms have en suite showers and Laura-Ashley-
designed curtains. The first storey features a heritage collection where the junior suites and
deluxe rooms are individually-designed to a boutique standard, with nine suites each having
separate bath and shower facilities. There are also fully-equipped guest rooms for the disabled.
The Hotel has three lifts which leads to all storeys.
Park International London offers a variety of room options ranging from Single Rooms each
measuring 10.4 sq m to the Heritage Junior Suites each measuring 36.0 sq m. The guest rooms
are equipped with amenities such as wireless internet service, a safe, tea/coffee-making facility
and individually-controlled air-conditioning and heating. Complimentary WI-FI service is available
in the Hotels lobby.
267
Room Type Size (sq m) Room Count
Single 10.4 20
Double 15.7 49
Twin 15.7 25
Queen 15.7 17
King 17.4 26
Triple 19.1 13
QD 22.6 2
Heritage Deluxe Suite 17.6 9
Heritage Junior Suite 36.0 10
Total 171
The following table sets out some of the notable awards and accolades which the Hotel has
received.
Year Description of Award Awarder
2012 Certificate of Excellence TripAdvisor
Meeting and Conference Facilities
The following table sets out the size and capacity of the meeting and conference facilities in the
Hotel.
Venue Size (sq m) Capacity
(1)
Conference room 38.4 10
Note:
(1) Based on a theatre setting. Capacity will differ based on the type of setting used and is not limited to the commonly
used setting that this table is based on.
F&B Facilities
Piano Bar & Restaurant is a New York-style restaurant which offers a variety of beers and spirits
and serves traditional British pub fare. It has a capacity of 25 persons.
The Orchid Breakfast Room serves Continental and English breakfast buffet-style every morning
and has a capacity of 115 persons.
The Checkmate Bar & Restaurant in the Hotel offers Thai and Western cuisine and serves
afternoon tea daily.
Recreational and Other Facilities
Park International London offers a wide range of recreational and business facilities, including a
gymnasium and a business centre.
268
Summary of Selected Information
The table below sets out a summary of selected information on Park International London.
Market Segment Mid-scale
Leasehold Tenure
(1)
Leasehold of 75 years commencing from
Listing Date
Approximate GFA (sq m) 6,825
Number of Available Rooms 171
RevPAR (FY2013) GBP70
Appraised Value by Colliers
(as at 31 December 2013) (million)
GBP39.3
Appraised Value by CBRE
(as at 31 December 2013) (million)
GBP37.7
Master Lessee P I Hotel Management Limited
Note:
(1) This refers to the length of leasehold title acquired by FH-REIT (directly or indirectly) under the relevant Sale and
Purchase Agreement.
Operating Statistics
The following charts show certain information on the operations of Park International London,
including the occupancy rate, the RevPAR and the Average Daily Rate of the Hotel for FY2011,
FY2012 and FY2013, and a breakdown of the guest profile of the Hotel by market segment and
country of origin.
Occupancy Rate of the Hotel
(1)
RevPAR and Average Daily Rate
of the Hotel
(1)
43.0%
59.0%
70.0%
FY11 FY12 FY13
88.0
113.0
100.0
38.0
67.0
70.0
0
50
100
150
FY11 FY12 FY13
ADR RevPAR
(GBP)
Note:
(1) The hotel underwent a major renovation in FY2011 and was subsequently rebranded as Park International London
post-renovation.
269
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
Aircrew 5.3%
Corporate
and
Government
14.8%
Retail /
Leisure /
Transient
78.4%
Other 1.5%
Europe 59.0%
North America
12.3%
South America
2.1%
Africa and Middle East
0.9%
North and North
East Asia 2.2%
South East
Asia 6.3%
Oceania 2.9%
Others 14.3%
BEST WESTERN CROMWELL LONDON
108, 110 and 112 Cromwell Road, London, SW7 4ES, United Kingdom
Description
Best Western Cromwell London is a hotel with 85 guest rooms. It is set in a Victorian-style building
and is located on Cromwell Road in the borough of South Kensington, with the Gloucester Road
Tube Station in close proximity. Nearby attractions include the Science Museum, the Natural
History Museum, the Victoria & Albert Museum, as well as shopping destinations such as Harrods
and Harvey Nichols.
The Hotels strategic location allows it to capture demand from both business and leisure
travellers. It is situated north-west of the Gloucester Road Tube Station which is served by the
Piccadilly, Circle and District lines.
The Hotel, which forms part of a terrace, comprises three adjoining and connected Victorian
houses. The 85 guest rooms are spread over the lower ground, ground and five upper floors.
Best Western Cromwell London offers a variety of room options ranging from Single Rooms to
Executive Rooms. The guest rooms are equipped with amenities such as individually-controlled
air-conditioning, a LCD television set, tea/coffee-making facilities and free wireless or broadband
internet access.
Room Type Size (sq m) Room Count
Single Room 9.7 11.2 5
Double Room 14 56
Twin Room 14.0 17.0 11
Garden Room 22.9 25.0 8
Executive Room 13.7 20.5 5
Total 85
270
The following table sets out some of the notable awards and accolades which the Hotel has
received.
Year Description of Award Awarder
2012 Certificate of Excellence TripAdvisor
Meeting and Conference Facilities
The following table sets out the size and capacity of the meeting and conference facilities in the
Hotel.
Venue Size (sq m) Capacity
(1)
Conference Room 12 8
Note:
(1) This conference room can only be setup in a boardroom style.
F&B Facilities
The Hotels bar and lounge is open daily and its breakfast room serves Continental and English
breakfast buffet-style.
Recreational and Other Facilities
The Hotels gymnasium is located on the lower ground floor and it is open to all registered hotel
guests. The Hotel also offers free Wi-Fi and 24-hour room service.
Summary of Selected Information
The table below sets out a summary of selected information on Best Western Cromwell London.
Market Segment Mid-scale
Leasehold Tenure
(1)
Leasehold of 75 years commencing from
Listing Date
Approximate GFA (sq m) 2,512
Number of Available Rooms 85
RevPAR (FY2013) GBP69
Appraised Value by Colliers
(as at 31 December 2013) (million)
GBP17.0
Appraised Value by CBRE
(as at 31 December 2013) (million)
GBP15.7
Master Lessee P I Hotel Management Limited
Note:
(1) This refers to the length of leasehold title acquired by FH-REIT (directly or indirectly) under the relevant Sale and
Purchase Agreement.
271
Operating Statistics
The following charts show certain information on the operations of Best Western Cromwell
London, including the occupancy rate, the RevPAR and the Average Daily Rate of the Hotel for
FY2011, FY2012 and FY2013, and a breakdown of the guest profile of the Hotel by market
segment. Breakdown of the guest profile of the Hotel by country of origin is not available.
Occupancy Rate of the Hotel
RevPAR and Average Daily Rate
of the Hotel
73.0%
78.0%
80.0%
FY11 FY12 FY13
93.0
89.0 86.0
68.0 69.0 69.0
0
50
100
150
FY11 FY12 FY13
ADR RevPAR
(GBP)
Guest Profile by Market Segment
(Room Nights, FY2013)
Corporate and
Government 3.8%
Retail /
Leisure /
Transient
82.9%
Other 13.3%
272
ANA CROWNE PLAZA KOBE
1-Chome, Kitano-Cho Chuo-Ku, Kobe, 650-0002, Japan
Description
ANA Crowne Plaza Kobe is a hotel with 593 rooms and suites. It is directly connected to the
Shin-Kobe Shinkansen Station from which Tokyo and Osaka can be accessed by a three-hour and
a 15-minute bullet train ride respectively. It is also one subway stop to downtown Kobe and
approximately 8.0 kilometres away from the Kobe Airport. The hiking trail, Kobe Nunobiki Herb
Garden and Ropeway, ascends behind the Hotel and the Hotel is within close proximity to
attractions such as Kitano Ijinkangai Historic Colonial Houses, Nankinmachi China Town and the
Hyogo Art Gallery.
The Hotels strategic location allows it to cater to mainly leisure travellers. The Hotel underwent
renovation and refurbishment works in the period from 2005 to 2007 to upgrade its lobby and
common facilities, introduce new restaurants on Level 36 and a new Angsana spa, and convert
approximately 70 guest rooms on the higher floors into an exclusive floor and lounge area.
The Hotel comprises 40 storeys, with 37 storeys above ground and three basement floors. The
Hotel also features a large on-site shopping and entertainment centre, Shinkobe Oriental Avenue,
which is located over six floors, from basement three to the third storey. There are 78 retail stores
and dining outlets, one supermarket and a Performing Art Theatre with a seating capacity of 668
persons.
ANA Crowne Plaza Kobe offers a variety of room options ranging from single bed rooms each
measuring 15.0 sq m to the club suites each measuring 125.0 sq m. The guest rooms are
equipped with amenities such as complimentary high-speed Internet, cable/satellite television and
a mini-bar. Guests staying at the Club Rooms at the Hotel enjoy exclusive elevator access to
dedicated floors and for entry into the Club Lounge.
Room Type Size (sq m) Room Count
Single Room 15.0 62
Twin Room 22.0 44.0 283
Double Room 18.0 31.0 170
Jap & West Room 54.0 1
Residential Suite 119.0 1
Club Twin 22.0 30.0 22
Club Double 30.0 40.0 39
Club Suite 33.0 125.0 14
Club Family 76.0 1
Total 593
The following table sets out some of the notable awards and accolades which the Hotel has
received.
Year Description of Award Awarder
2013 Certificate of Excellence TripAdvisor
273
Meeting and Conference Facilities
ANA Crowne Plaza Kobe has event spaces which cover 3,298.0 sq m and include exhibit areas
and a ballroom. The following table sets out the size and capacity of the meeting and conference
facilities in the Hotel. There is also a ballroom which can accommodate up to 2,000 persons.
Benefitting from its extensive banquet facilities, the Hotels banquet and wedding revenues form
a large proportion of the total revenue as compared to room revenue. For the financial year ended
September 2013, banquet and wedding revenues contributed about 37% of total hotel revenue.
Venue Size (sq m) Capacity
(1)
Sky Banquet Room (four) 445.0 470
Grand Banquet Room (four) 1,411 1,820
Small-to-mid-sized Banquet Room (seven) 1,210 1,470
Meeting Room (eight) 232.0 160
Note:
(1) Based on a theatre setting. Capacity will differ based on the type of setting used and is not limited to the commonly
used setting that this table is based on.
F&B Facilities
ANA Crowne Plaza Kobe has 11 restaurants and bars with a total seating capacity of 968 persons
offering a wide range of dining options, the details of some of which are as follows.
Level 36 is a fusion-style restaurant and bar which offers views of the Kobe skyline. It serves lunch
and dinner and has a capacity of 180 persons.
Suzhou is a Chinese restaurant located on the 34th floor of the Hotel which serves lunch and
dinner. It has a capacity of 112 persons and features four private rooms which can be reserved for
meetings.
Kobe Nadaman is a Japanese restaurant located on the 34th floor of the Hotel which serves lunch
and dinner. It has a capacity of 90 persons and features a private room which can be reserved for
luncheon meetings or business dinners.
Kitano is a Japanese restaurant located on the fifth floor of the Hotel which specialises in
Teppanyaki-style cuisine and serves lunch and dinner. It has a capacity of 27 persons.
Tankuma Kitamise is a Japanese restaurant located on the fifth floor of the Hotel which is
renowned for its Kyoto cuisine. It offers different types of seating and serves breakfast, lunch and
dinner. It has a capacity of 80 persons.
Jin is a sushi restaurant located on the fifth floor of the Hotel and it serves lunch and dinner. It has
a capacity of 33 persons.
The Terrace is a casual-dining restaurant located on the fourth floor of the Hotel which serves
buffet for breakfast, lunch and dinner. It also offers a variety of a la carte food and beverage
selections. It has a capacity of 200 persons.
In addition to these restaurants, the Hotel also has a lounge and a bar with private rooms.
274
Recreational and Other Facilities
ANA Crowne Plaza Kobe offers a wide range of recreational and business facilities, including a
health and fitness centre and a business services centre. The health and fitness centre is
equipped with a gymnasium and features an all-season indoor swimming pool and a sauna bath.
The Hotel also offers a 70-seat chapel, spa facilities and has a beauty salon, a florist and a gift
shop on its premises.
Summary of Selected Information
The table below sets out a summary of selected information on ANA Crowne Plaza Kobe.
Market Segment Upper Upscale
Leasehold Tenure Freehold
1
Approximate GFA (sq m) 136,657 (Hotel: 66,256 and Retail: 70,401)
Number of Available Rooms 593
RevPAR (FY2013) JPY8,865
Appraised Value by Colliers
(as at 31 December 2013) (million)
JPY11,200.0
Appraised Value by CBRE
(as at 31 December 2013) (million)
JPY10,900.0
Master Lessee Hotel component: K.K. Shinkobe Holding
Retail component: Y.K. Toranomon
Properties
Operating Statistics
The following charts show certain information on the operations of ANA Crowne Plaza Kobe,
including the occupancy rate, the RevPAR and the Average Daily Rate of the Hotel for FY2011,
FY2012 and FY2013, and a breakdown of the guest profile of the Hotel by market segment and
country of origin.
Occupancy Rate of the Hotel
RevPAR and Average Daily Rate of the
Hotel
76.0%
77.0% 77.0%
FY11 FY12 FY13
11,429.0
11,193.0
11,530.0
8,686.0
8,589.0
8,865.0
-
5,000
10,000
15,000
FY11 FY12 FY13
ADR RevPAR
(JPY)
1
ANA Crowne Plaza Kobe is held through a TBI, in the form of a beneficiary interest in a Japanese trust that holds
ownership title to ANA Crowne Plaza Kobe.
275
Guest Profile by Market Segment
(Room Nights, FY2013)
Guest Profile by Geography
(Room Nights, FY2013)
MICE 12.9%
Aircrew
2.3%
Corporate
and
Government
8.3%
Retail /
Leisure /
Transient
59.6%
Wholesale
14.4%
Other 2.5%
Europe 0.7%
North America
1.8%
North and
North East
Asia 96.8%
South East
Asia 0.7%
THE WESTIN KUALA LUMPUR
199, Jalan Bukit Bintang, Kuala Lumpur, 55100, Malaysia
Description
The Westin Kuala Lumpur is a luxury hotel with 443 guest rooms. It is located in the midst of Kuala
Lumpurs Golden Triangle and business district, and offers convenient access to the citys
shopping malls and nightlife. It is also in close proximity to KLCC, where numerous multinational
corporations and leading financial institutions are located. The Kuala Lumpur International Airport
is a 45-minute ride away from the Hotel.
The Hotels strategic location allows it to capture demand from both business and leisure
travellers. The Hotel has contemporary function venues and a conference centre which includes
the Westin Grand Ballroom with Martin Architectural Lighting for an extensive variety of lighting
effects and customised projections. There is also a business centre and an Executive Club
Lounge which was relocated from Level 33 to Level 3 after a complete refurbishment in 2012. The
Hotel has a parking facility with 280 parking lots.
The Westin Kuala Lumpur offers a variety of room options ranging from Deluxe Rooms each
measuring 42.0 sq m to the Executive Residences measuring 120.0 sq m. The guest rooms
feature the plush, all-white signature Heavenly Bed
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C-9
The variable rent component of FH-REITs gross revenue derived from the Master
Lessees and Tenant is computed as follows:
FY2011 FY2012 FY2013 1Q FY2013 1Q FY2014
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
(S$000) (S$000) (S$000) (S$000) (S$000)
% of adjusted gross
operating revenue
(1)
11,078 11,502 14,160 2,974 3,402
% of adjusted gross
operating profit
(1)
73,765 82,378 83,423 22,778 22,632
84,843 93,880 97,583 25,752 26,034
Less: Fixed Rent 47,316
(3)
51,446
(4)
49,606 12,733 12,209
Variable Rent
(2)
37,527 42,434 47,977 13,019 13,825
FY2011 FY2012 FY2013 1Q FY2013 1Q FY2014
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
(S$000) (S$000) (S$000) (S$000) (S$000)
FH-REITs gross
revenue from:
Master Lessees and
Tenant based on terms
of Master Lease or
Tenancy Agreements
Fixed Rent 47,316
(3)
51,446
(4)
49,606 12,733 12,209
Variable Rent 37,527 42,434 47,977 13,019 13,825
84,843 93,880 97,583 25,752 26,034
Notes:
(1) The adjusted gross operating revenue and adjusted gross operating profit represent the gross
operating revenue and gross operating profit of the Properties on which FH-REITs gross revenue from
the Master Lessees and Tenant is derived based on the terms of the Master Lease or Tenancy
Agreements as set out in Section G Note (5). The percentage of adjusted gross operating revenue will
be first applied and then, the higher of the percentage of adjusted gross operating profit or fixed rent
will be applied.
(2) Variable Rent with respect to a Fiscal Year/Period means an amount computed based on the sum of
the agreed percent of the Gross Operating Revenue for that Fiscal Year/Period and the agreed percent
of the Gross Operating Profit for that Fiscal Year/Period, less the Fixed Rent plus unutilised FF&E
reserve not carried forward to the following Year/Period, and if the calculation of the Variable Rent
yields a negative figure, the overall rent will then be the Fixed Rent amount.
(3) Includes prorated rental for Best Western Cromwell London acquired on 29 July 2011.
(4) Includes prorated rental for Fraser Suites Queens Gate acquired on 8 December 2011.
C-10
Property tax, including land tax, and insurance expense previously incurred by the
respective Vendors of the Properties are to be assumed by FH-REIT except that the
property tax and insurance expenses relating to the retail component of ANA Crowne
Plaza Kobe are being recovered by FH-REIT via the terms of the Retail Master Lease
Agreement as set out in the Prospectus;
Other property expenses comprises property expenses such as Serviced Residences
Management fees, Management Corporation Strata Title Plan (MCST) Sinking Fund
Contribution (Sinking Fund Contributions) in Singapore or its equivalent funds in
overseas and other miscellaneous operating expenses;
Serviced Residences Management fees comprising base management fee, marketing
fee and incentive fee is payable to the Serviced Residences Operators for management
services rendered for the Serviced Residences. It also comprises a trademark licence
fee payable to the Serviced Residence Operator for use of the relevant trademarks
used in connection with the operations of the Serviced Residences. The base
management fee, marketing fee and trademark license fee is 1.0% per annum of the
gross operating revenue of the Serviced Residences respectively. The incentive fee is
8.0% per annum of gross operating profit of the Serviced Residences;
Serviced Residences Management fees and Trademark Licence fee which are
previously incurred by the respective Vendors of the Service Residences are to be
assumed by FH-REIT whereas the property management fee previously incurred by the
Vendors of the Hotels, are to be assumed by the Master Lessees of the Hotels;
It has been assumed that the REIT Manager has elected to pay 100.0% of fees payable
to the Serviced Residences Operators in the form of Stapled Securities. Where the
management fees are payable in Stapled Securities, the REIT and MIT Manager has
assumed that such Stapled Securities are issued at the Offering Price;
REIT Managers management fee is based on the formula as set out in Section G
Note (1);
MIT Managers and Kobe Asset Managers management fees are based on the formula
as set out in Section G Note (2);
Trustees fee is based on the formula as set out in Section G Note (3);
Other expenses comprise operating expenses such as compliance expenses, annual
listing fees, registry fees, audit and tax advisory fees, valuation fees, stamp duty,
insurance fees, commission fees, costs associated with the preparation and distribution
of reports to the holders of the Stapled Securities, investor communication costs and
other miscellaneous costs. Other expenses of S$32 million, S$2 million, S$2 million,
S$0.6 million and S$0.5 million are assumed to be incurred by FH-REIT for the years
ended 30 September 2011, 30 September 2012 and 30 September 2013, and the three
months periods ended 31 December 2012 and 31 December 2013 respectively;
Investment properties are assumed to be acquired at an estimated aggregate purchase
price of S$1,716 million on the various assumed acquisition dates stated on page C-6
of the Prospectus, and assumed to remain unchanged in functional currency throughout
the periods presented, as it is also assumed that there will be no capital expenditure
incurred and no fair value changes throughout the periods presented;
C-11
The FH-REIT Debt Facilities, being S$716 million unsecured banking facilities and
S$39 million secured medium term notes net of debt-related issuance costs, were in
place at the time of the acquisition of the Assets;
Interest expense on borrowings is computed based on an effective interest rate of
approximately 2.2% per annum (inclusive of all margins and amortisation of debt upfront
costs) on term loan and 1% per annum on short term revolving credit facility. The
principal of S$713 million term loan and S$50 million short term revolving credit facility
are assumed to be drawn by FH-REIT as of 1 October 2010, and remained unchanged
in functional currency throughout the periods presented. It is assumed that the S$50
million short term revolving credit facility will be repaid within 6 months after drawn
down; and
The foreign exchange rates applied in compiling the Unaudited Pro Forma Statements
of Total Return are as follows:
FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
AUD/SGD 1.29366 1.30208 1.23609 1.26984 1.15821
GBP/SGD 2.02429 1.99601 1.94175 1.96348 2.02429
JPY/SGD 0.01557 0.01604 0.01343 0.01503 0.01244
MYR/SGD 0.41336 0.40667 0.39984 0.40006 0.38964
(ii) Unaudited Pro Forma Cash Flow Statements
The Unaudited Pro Forma Cash Flow Statements for the year ended 30 September 2013 and
the three months ended 31 December 2013 have been compiled assuming FH-REIT had
purchased the Assets and entered into the Master Lease or Tenancy Agreements on 1
October 2012, and is based on the cash flows directly attributable to the Assets and
FH-REITs borrowing and unit structures.
In addition, the following assumptions were made:
Investment properties (except for ANA Crowne Plaza Kobe) are assumed to be acquired
at an estimated aggregate purchase price of S$1,526 million, and assumed to remain
unchanged in functional currency throughout the periods presented, as it is also
assumed that there will be no capital expenditure incurred and no fair value changes
throughout the periods presented;
ANA Crowne Plaza Kobe is acquired through purchase of three entities (Kobe
Excellence TMK, Excellence Prosperity Japan K.K. and Excellence Prosperity TMK Pte
Ltd) at an estimated aggregate purchase price of S$137 million, and the assumed
purchase price allocated to ANA Crowne Plaza Kobe is S$176 million. It is also
assumed that there will be no capital expenditure incurred and no fair value changes to
ANA Crowne Plaza Kobe throughout the periods presented;
The FH-REIT Debt Facilities were in place at the time of the acquisition of the Assets;
C-12
The FH-REITs borrowings being S$697 million unsecured banking facilities and S$38
million secured medium term notes net of debt-related issuance costs, and the FH-REIT
units were issued correspond to the timing of the purchase of the Assets on 1 October
2012;
Interest expense on borrowings is assumed to be paid on the month it incurred;
The recoverable UK value added taxes and Singapore goods and services tax paid for
the acquisition of certain Investment properties in these jurisdictions of S$62 million are
refunded within six months through FH-REIT and its subsidiary which are duly tax
registered in the respective jurisdictions after constitution or incorporation;
Management fees payable to the REIT Manager in the form of Stapled Securities are
paid on a monthly basis, in arrears in the following month;
Master Lease rental receivable is received on a monthly basis, in arrears in the
following month;
Issue costs are assumed to be funded by proceeds raised from the Offering;
Proceeds raised, net of issue costs and acquisition costs, from the Offering amounted
to S$995 million;
100% of taxable income available for distribution to holders of Stapled Securities is
distributed for each of the periods presented. Distribution to holders of Stapled
Securities are paid on a semi-annual basis in every May and every November, in
arrears; and
The foreign exchange rates applied in compiling the Unaudited Pro Forma Cash flow
Statements are as follows:
As at
30 September 2012 FY2013 Q1 FY2014
AUD/SGD 1.27389 1.23609 1.15821
GBP/SGD 1.98452 1.94175 2.02429
JPY/SGD 0.01575 0.01343 0.01244
MYR/SGD 0.40038 0.39984 0.38964
(iii) Unaudited Pro Forma Balance Sheets
The Unaudited Pro Forma Balance Sheets have been compiled on the basis that FH-REIT
purchased the Assets at their respective purchase prices and entered into the Master Lease
or Tenancy Agreements on 30 September 2013 and 31 December 2013, respectively.
The following assumptions are made:
Investment properties are acquired at an estimated aggregate purchase price of
S$1,649 million as of 30 September 2013 and S$1,645 million as of 31 December 2013;
Cash and cash equivalent amounted to S$27 million as of 30 September 2013 and S$27
million as of 31 December 2013;
C-13
Proceeds raised, net of issue costs and acquisition costs, from the Offering amounted
to S$985 million as of 30 September 2013 and S$982 million as of 31 December 2013;
Issue costs relating to the Offering are estimated to be S$28 million as of 30 September
2013 and as of 31 December 2013 and assumed to be funded by proceeds raised from
the Offering;
The UK value added taxes and Singapore goods and services tax for the acquisition of
certain Investment properties in these jurisdictions amounted to S$63 million and S$65
million as of 30 September 2013 and 31 December 2013 respectively, and are
refundable through FH-REIT and its subsidiary which are duly tax registered in the
respective jurisdictions.
Borrowings of S$714 million, net of debt upfront costs, were drawn down by FH-REIT
on 30 September 2013 and borrowings of S$713 million, net of debt upfront costs, were
drawn down by FH-REIT on 31 December 2013 to partially fund the acquisition of the
Assets; and
The foreign exchange rates applied in compiling the Unaudited Pro Forma Balance
Sheets are as follows:
As at
30 September 2013
As at
31 December 2013
AUD/SGD 1.17220 1.12613
GBP/SGD 2.00361 2.09118
JPY/SGD 0.01273 0.01200
MYR/SGD 0.38879 0.38615
C-14
(C) UNAUDITED PRO FORMA STATEMENTS OF TOTAL RETURN
The Unaudited Pro Forma Statements of Total Return of FH-REIT for the years ended
30 September 2011, 30 September 2012 and 30 September 2013 and the three-month
periods ended 31 December 2012 and 31 December 2013 have been compiled for inclusion
in this Prospectus and are presented below. The assumptions used to compile the unaudited
Pro Forma Statements of Total Return are consistent with those described in Basis of
Preparation of Unaudited Pro Forma Financial Information.
Section F
Note FY2011 FY2012 FY2013 Q1 FY2013 Q1 FY2014
(S$000) (S$000) (S$000) (S$000) (S$000)
Gross revenue 2 84,843 93,880 97,583 25,752 26,034
Property operating
expenses
Property tax (6,620) (8,336) (7,973) (2,092) (2,101)
Land tax (146) (148) (155) (36) (37)
Insurance expense (1,005) (1,051) (930) (258) (235)
Other property
expenses (8,275) (7,479) (8,196) (1,883) (1,986)
(16,046) (17,014) (17,254) (4,269) (4,359)
Net property Income 68,797 76,866 80,329 21,483 21,675
REIT Managers
management fees (6,499) (6,959) (7,055) (1,819) (1,840)
Other management
fees (1,650) (1,666) (1,633) (432) (415)
Trustees fees (481) (482) (453) (118) (110)
Other expenses
(1)
(31,631)
(2)
(2,327) (2,201) (567) (547)
Interest income
(3)
50 7 8
Finance costs
(5)
3 (16,241) (15,964) (15,544) (4,088) (3,817)
Total return before
tax and distribution 12,345 49,475 53,451 14,459 14,946
Taxation (2,975) (1,801) (2,297) (703) (825)
Total return after tax 9,370 47,674 51,154 13,756 14,121
Non-tax deductible
items and other
adjustments
(4)
43,573 14,593 15,264 3,811 4,046
Income available for
distribution to
holders of
Stapled Securities 52,943 62,267 66,418 17,567 18,167
Notes:
(1) Other expenses comprise operating expenses such as compliance expenses, annual listing fees, registry
fees, audit and tax advisory fees, valuation fees, insurance fees, commission fees, costs associated with the
preparation and distribution of reports to the holders of the Stapled Securities, investor communication costs
and other miscellaneous costs.
(2) In FY2011, in addition to the expenses referred to in (1) above, it includes stamp duty in relation to the
acquisition of United Kingdom & Australia properties and non-capitalised listing fees.
(3) Interest and other income comprise mainly interest earned on cash and bank balances. There is no payment
top-up recognised in the pro forma financial statements because such top-up relates to specific conditions in
the future that are not applicable to the historical pro forma periods presented (i.e. up to 30 November 2015
so long as the Property is not sold).
(4) Non-tax deductible items and other adjustments comprise the REIT Managers management fees
paid/payable in Stapled Securities, MIT Managers management fees paid/payable in Stapled Securities,
REIT Trustees fees, amortisation of debt-related transaction costs/insurance fee, serviced residences
management fees and trademark licence fees which are paid/payable in Stapled Securities, stamp duty and
non-capitalised listing fees.
(5) Finance costs comprise interest expense and amortisation of debt-related transaction costs.
C-15
(D) UNAUDITED PRO FORMA CASH FLOW STATEMENTS
The Unaudited Pro Forma Cash Flow Statements for the year ended 30 September 2013 and
the three months ended 31 December 2013 have been compiled for inclusion in the
Prospectus and presented below. The assumptions used to compile the Unaudited Pro
Forma Cash Flow Statement are consistent with those described in Basis of Preparation of
Unaudited Pro Forma Financial Information.
FY 2013 Q1 FY2014
(S$000) (S$000)
Operating activities
Net income before income tax 24,211 14,946
Adjustments for:
Amortisation expense
(1)
1,588 398
REIT Managers management fees paid or payable in
Stapled Securities
(2)
7,043 1,840
Other management fees paid or payable in Stapled
Securities
(3)
1,301 336
Borrowing costs 14,205 3,420
Serviced Residences Management Fees and Trademark
License Fees paid or payable in Stapled Securities
(4)
5,008 1,401
Other expenses 29,014 8
Operating income before working capital changes 82,370 22,349
Changes in receivables (8,132) (546)
Changes in payables 246 (4)
Cash security deposits received
(5)
24,095
Cash flows from operations 98,579 21,799
Taxes paid (1,297) (1,386)
Net cash inflows generated from operating activities 97,282 20,413
Investing activities
Purchase of investment properties (1,525,858)
Acquisition costs (26,453)
Net cash outflow on acquisition of subsidiaries
(6)
(169,661)
Cash flows used in investing activities (1,721,972)
Financing activities
Proceeds from issue of Stapled Securities 1,049,513
Issue expenses (28,542)
Proceeds from borrowings 742,046
Repayment of borrowings (50,000)
Payment of upfront debt and arrangement costs (7,232)
Distribution to holders of Stapled Securities (32,593) (33,617)
Interest paid (14,164) (3,420)
Cash flows generated from/(used in) financing activities 1,659,028 (37,037)
Net increase/(decrease) in cash and cash equivalents 34,338 (16,624)
Cash and cash equivalents at beginning of year/period 34,338
Cash and cash equivalents at end of year/period 34,338 17,714
C-16
Notes:
(1) This relates to the amortisation of upfront debt facilities.
(2) The REIT Manager has elected to receive 100% of the Base Fee and Performance Fee in the form of Stapled
Securities.
(3) The MIT Trustee has elected to pay the MIT Manager 100% of the Base Fee and Performance Fee in the form
of Stapled Securities.
(4) The Managers have elected that the Serviced Residences Operator receive 100% of the Serviced Residences
Management Fees and Trademark License Fees in the form of Stapled Securities.
(5) Cash security deposits are collected from master lessees as part of the lease agreements (except for master
lessee in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being
provided by master lessee and tenant in the form of bankers guarantee. The use of such cash from security
deposits are disclosed under Use of Proceeds.
(6) The effect of acquisition of the entities by FH-REITs in the pro forma cash flows for the year ended 30
September 2013 is set out below:
FY2013
(S$000)
Non-current assets
Investment property 176,406
Others 417
176,823
Current assets
Cash 3,922
Others 337
Total assets 181,082
Less: Non-current liabilities (38,730)
Less: Current liabilities (5,781)
Fair value of subsidiaries net assets acquired 136,571
Purchase price 136,571
Less: Cash acquired (3,922)
Add: Bank borrowings assumed 37,012
Net cash outflow 169,661
Significant Non-Cash Transactions
During the year ended 30 September 2013 and the three months ended 31 December 2013,
respectively, 15,114,000 and 3,978,000 Stapled Securities at S$0.88 per unit, were issued
and accrued as payment for the followings:
(1) The REIT Managers management fees which is payable in the form of Stapled
Securities (see Section G note (1)) amounting to approximately S$7.0 million and S$1.8
million, respectively, during the year ended 30 September 2013 and the three months
ended 31 December 2013;
(2) The MIT Managers management fees which is payable in the form of Stapled Securities
(see Section G note (2)) amounting to approximately S$1.3 million and S$0.3 million,
respectively, during the year ended 30 September 2013 and the three months ended 31
December 2013; and
(3) The Serviced Residences Management Fees and Trademark License Fees which is
payable in the form of Stapled Securities amounting to approximately S$5.0 million and
S$1.4 million, respectively, during the year ended 30 September 2013 and the three
months ended 31 December 2013.
C-17
(E) UNAUDITED PRO FORMA BALANCE SHEETS
The Unaudited Pro Forma Balance Sheets as at 30 September 2013 and 31 December 2013
have been compiled for inclusion in the Prospectus and are presented below. The
assumptions used to compile the unaudited Pro Forma Balance Sheet are consistent with
those described in Bases of Preparation of Unaudited Pro Forma Financial Information.
Section F
Note
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Non-current assets
Investment properties
(1)
4 1,648,798 1,645,015
Deferred tax assets
(2)
317 89
Current assets
Cash and cash equivalents 27,117 27,330
Tax recoverable
(3)
62,942 65,798
Other current assets 270 261
Total assets 1,739,444 1,738,493
Current liabilities
Other current liabilities 1,288 1,386
Borrowings
(5)
50,000 50,000
Non-current liabilities
Security deposits
(4)
23,717 23,861
Deferred tax liabilities
(2)
4,393 4,813
Borrowings
(5)
5 664,232 662,807
Total liabilities 743,630 742,867
Net assets attributable to holders of
Stapled Securities 6 995,814 995,626
Number of Stapled Securities in issue
(000)
(6)
1,192,628 1,192,628
Net asset value per Stapled Securities
(S$) 0.83 0.83
Notes:
(1) Assumes that costs of the investment properties remain unchanged from S$1,649 million at 30 September
2013 and S$1,645 million at 31 December 2013.
(2) Deferred tax assets and deferred tax liabilities arose from the acquisition of the entities by FH-REIT in relation
to ANA Crowne Plaza Kobe.
(3) Tax recoverable relates to recoverable UK value added tax and Singapore goods and services tax paid for the
acquisition of certain Investment properties. It also includes the tax receivable amount which arose from the
acquisition of the entities by FH-REIT in relation to ANA Crowne Plaza Kobe.
(4) Cash security deposit are collected from master lessees as part of the lease agreements (except for master
lessee in Japan and tenant in Malaysia). In Japan and Malaysia, the equivalent security deposits are being
provided by master lessee and tenant in the form of bankers guarantee. The use of such cash from security
deposits are disclosed under Use of Proceeds.
(5) Comprises principal amount of borrowings of S$714 million, after deducting unamortised debt upfront costs
of S$7 million as at 30 September 2013 and comprises principal amount of borrowings of S$713 million, after
deducting unamortised debt upfront costs of S$7 million as at 31 December 2013.
(6) Based on the Offering Price of S$0.88 per Stapled Securities.
C-18
(F) NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
1. Significant Accounting Policies of FH-REIT
The significant accounting policies of FH-REIT, which have been consistently applied in
preparing the Unaudited Pro Forma Financial Information set out in this Appendix, are as
follows:
Basis of Preparation of the Unaudited Pro Forma Financial Information
The Unaudited Pro Forma Financial Information of the Trust are compiled in accordance with
the recommendations of Statement of Recommended Accounting Practice 7, Reporting
Framework for Unit Trusts (RAP 7) issued by the Institute of Singapore Chartered
Accountants (ISCA), the applicable requirements of the Code on Collective Investment
Scheme (the CIS Code) issued by Monetary Authority of Singapore (MAS) and the
provisions of the Trust Deed. RAP 7 requires the accounting policies to generally comply with
the recognition and measurement principles of Singapore Financial Reporting Standards
(FRS).
The Unaudited Pro Forma Financial Information have been compiled on the historical cost
basis except as disclosed in the accounting policies below.
The Unaudited Pro Forma Financial Information are presented in Singapore Dollars ($ or
S$) which is the functional currency of the Trust. All Unaudited Pro Forma Financial
Information has been rounded to the nearest thousand, unless otherwise stated.
Significant Accounting Judgments and Estimates
The compilation of financial information in conformity with RAP 7 requires management to
make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates. Estimates and underlying assumptions are revised on an
on-going basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
(a) Key Sources of Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year
are discussed.
(i) Income Taxes
The Pro Forma Group has exposure to income taxes in numerous jurisdictions.
Significant assumptions are required in determining the group-wide provision for
income taxes. There are certain transactions and computations for which the
ultimate tax determination is uncertain during the ordinary course of business. The
Pro Forma Group recognises the liabilities for expected tax issues based on
estimates of whether additional taxes will be due. Where the final tax outcome of
these matters is different from the amounts that were initially recognised, such
differences will impact the income tax and deferred tax provisions in the period in
which such determination is made. The carrying amounts of provision for taxation,
deferred tax assets and liabilities are as disclosed in the Pro Forma Groups
balance sheet.
C-19
(ii) Valuation of Completed Investment Properties
The Pro Forma Groups completed investment properties are stated at their
estimated market values, which are determined annually based on independent
professional valuations. The fair value of completed investment properties is
determined using a combination of the Direct Comparison Method, Income
Approach and Discounted Cash Flow Analysis. These estimated market values
may differ from the prices at which the Pro Forma Groups completed investment
properties could be sold at a particular time, since actual selling prices are
negotiated between willing buyers and sellers. Also, certain estimates require an
assessment of factors not within the directors control, such as overall market
conditions. As a result, actual results of operations and realisation of these
completed investment properties could differ from the estimates set forth in these
financial statements, and the difference could be significant. The carrying amount
of completed investment properties is as disclosed in the Pro Forma Groups
balance sheet.
(b) Critical Judgements made in Applying Accounting Policies
In the process of applying the Pro Forma Groups accounting policies, management has
made the following judgements, apart from those involving estimations, which have
significant effects on the amounts recognised in the consolidated financial statements.
(i) Operating Lease Commitments Group as Lessor
The Pro Forma Group has entered into commercial property leases on its
investment property portfolio. The Pro Forma Group has determined, based on an
evaluation of the terms and conditions of the arrangements, that it retains all the
significant risks and rewards of ownership of these properties which are leased out
on operating leases.
Basis of Consolidation and Investment in Subsidiaries
A subsidiary (including special purpose entity) is an entity over which the Pro Forma Group
has the power to govern the financial and operating policies so as to obtain benefits from its
activities.
In the Trusts balance sheet, investment in subsidiary is accounted for at cost less any
impairment losses.
The consolidated financial statements incorporate the financial statements of the Trust and
its subsidiaries as of the balance sheet date. The financial statements of the subsidiaries
used in the preparation of the consolidated financial statements are prepared for the same
reporting date and using consistent accounting policies as the Trust.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Pro
Forma Group obtains control, and continues to be consolidated until the date that such
control ceases. All intra-group balances, income and expenses and unrealised gains and
losses resulting from intra-group transactions are eliminated in full.
Business combinations are accounted for by applying the acquisition method. Identifiable
assets acquired and liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. Acquisition-related costs are recognised as expenses
in the periods in which the costs are incurred and the services are received.
C-20
When the Pro Forma Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes to the fair value of the contingent consideration,
if deemed to be an asset or liability within the scope of FRS 39, will be recognised either in
the Statement of Total Return or as change to a separate component of equity. If the
contingent consideration is classified as equity, it is not remeasured until it is finally settled
within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree
are remeasured to fair value at the acquisition date and any corresponding gain or loss is
recognised in the Statement of Total Return.
The Pro Forma Group elects for each individual business combination whether non-
controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value
or at the non-controlling interests proportionate share of the acquirees identifiable net
assets.
Any excess of the sum of the fair value of the consideration transferred in the business
combination, the amount of non-controlling interest in the acquiree (if any), and the fair value
of the Groups previously held equity interest in the acquiree (if any), over the net fair value
of the acquirees identifiable assets and liabilities is recorded as goodwill. In instances where
the latter amount exceeds the former, the excess is recognised as gain on bargain purchase
in the Statement of Total Return on the acquisition date.
Investment Properties
Investment properties are held either to earn rental income or for capital appreciation or both,
but not for sale in the ordinary course of business, use in production or supply of goods or
services or for administrative purposes. Investment properties are measured at cost on initial
recognition and subsequently at fair value with any change therein recognised in the
Statement of Total Return.
Cost includes expenditure that is directly attributable to the acquisition of the investment
properties. Fair value is determined at each balance sheet date in accordance with the Trust
Deed. In addition, the investment properties are valued by independent professional valuers
at least once a year, in accordance with the CIS Code issued by the MAS.
Subsequent expenditure relating to investment properties that has already been recognised
is added to the carrying amount of the asset when it is probable that future economic
benefits, in excess of originally assessed standard of performance of the existing asset, will
flow to the Pro Forma Group. All other subsequent expenditure is recognised as an expense
in the period in which it is incurred.
When an investment property is disposed of, the resulting gain or loss recognised in the
Statement of Total Return is the difference between the net disposal proceeds and the
carrying amount of the property.
C-21
Financial Instruments
(a) Non-Derivative Financial Assets
The Pro Forma Group initially recognises loans and receivables on the date they
originate. All other financial assets (including assets designated at fair value through
profit or loss) are recognised initially on the trade date, which is the date that the Pro
Forma Group becomes a party to the contractual provisions of the instrument.
The Pro Forma Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the contractual cash
flows on the financial asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any interest in transferred
financial assets that is created or retained by the Pro Forma Group is recognised as a
separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the balance
sheet when, and only when, the Pro Forma Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Loans and receivables are financial assets with fixed or determinable payments that are
not quoted in an active market. Such assets are recognised initially at fair value plus
any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less
any impairment losses.
(b) Non-Derivative Financial Liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the
Pro Forma Group becomes a party to the contractual provisions of the instrument.
The Pro Forma Group derecognises a financial liability when its contractual obligations
are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the balance
sheet when, and only when, the Pro Forma Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Pro Forma Group classifies non-derivative financial liabilities into the other
financial liabilities category. Such financial liabilities are recognised initially at fair value
plus any directly attributable transaction costs. Subsequent to initial recognition, these
financial liabilities are measured at amortised cost using the effective interest method.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash at bank and on hand.
C-22
Impairment
(a) Non-Financial Assets
The carrying amounts of the Pro Forma Groups non-financial assets, other than
investment properties, are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, the assets recoverable
amounts are estimated. An impairment loss is recognised if the carrying amount of an
asset or its related cash-generating unit (CGU) exceeds its estimated recoverable
amount.
The recoverable amount of an asset or cash generating unit is the greater of its fair
value less costs of disposal and its value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset or cash generating unit. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest
group of assets that generate cash inflows from continuing use that are largely
independent of the cash inflows of other assets or cash generating unit.
Impairment losses are recognised in the statement of total return. Impairment losses
recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the assets carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
(b) Non-derivative Financial Assets
A financial asset not carried at fair value through profit or loss is assessed at each
reporting date to determine whether there is any objective evidence that it is impaired.
A financial asset is impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the loss event has a negative
effect on the estimated future cash flows of that asset that can be measured reliably.
Objective evidence that financial assets are impaired can include default or delinquency
by a debtor, indications that a debtor or issuer will enter bankruptcy, adverse changes
in the payment status of borrowers or issuers in the Pro Forma Group, economic
conditions that correlate with defaults or the disappearance of an active market for a
security.
(c) Loans and Receivables
The Pro Forma Group considers evidence of impairment for loans and receivables at
both a specific asset and collective level. All individually significant loans and
receivables are assessed for specific impairment. All individually significant receivables
found not to be specifically impaired are then collectively assessed for any impairment
that has been incurred but not yet identified. Loans and receivables that are not
individually significant are collectively assessed for impairment by grouping together
loans and receivables with similar risk characteristics.
In assessing collective impairment, the Pro Forma Group uses historical trends of the
probability of default, the timing of recoveries and the amount of loss incurred, adjusted
for the Managers judgement as to whether current economic and credit conditions are
such that the actual losses are likely to be greater or less than suggested by historical
trends.
C-23
An impairment loss in respect of a financial asset measured at amortised cost is
calculated as the difference between its carrying amount, and the present value of the
estimated future cash flows, discounted at the assets original effective interest rate.
Losses are recognised in the statement of total return and reflected in an allowance
account against loans and receivables. Interest on the impaired asset continues to be
recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount
of impairment loss to decrease, the decrease in impairment loss is reversed through the
statement of total return.
Security Deposits
Security deposits relate to rental deposits received from tenants of the Pro Forma Groups
investment properties. Security deposits are accounted for as financial liability and the
accounting policies are set out in Note (Financial Instrument (b) Non-derivative financial
liabilities).
Taxation
(i) Current Income Tax
Current tax is the expected tax payable on the taxable income for the year, using tax
rates and tax laws enacted or substantively enacted at the reporting date.
(ii) Deferred Tax
Deferred income tax is provided, using the liability method, on temporary differences at
the reporting date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the year in which those assets
and liabilities are expected to be realised or settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the reporting date.
(iii) Tax Transparency
The Inland Revenue Authority of Singapore (IRAS) has issued a tax ruling on the
income tax treatment of FH-REIT. Subject to meeting the terms and conditions of the tax
ruling which includes a distribution of at least 90% of the specified Taxable Income of
FH-REIT, FH-REIT will not be assessed for tax on the portion of its specified Taxable
Income that is distributed to Stapled Securityholders. Any portion of FH-REITs
specified Taxable Income that is not distributed to Stapled Securityholders will be taxed
at the prevailing corporate tax rate.
In the event that there are subsequent adjustments to the specified Taxable Income
when the actual specified Taxable Income of FH-REIT is finally agreed with the IRAS,
such adjustments are taken up as an adjustment to the amount of specified Taxable
Income distributed for the next distribution immediately following the agreement with
the IRAS.
The distributions made by FH-REIT out of its specified Taxable Income are subject to
tax in the hands of Stapled Securityholders, unless they are exempt from tax on the
FH-REITs distributions (the tax transparency ruling). FH-REIT is required to withhold
tax at the prevailing corporate tax rate on the distributions made by FH-REIT except:
(a) where the beneficial owners are Qualifying Stapled Securityholders, FH-REIT will
make the distributions to such Stapled Securityholders without withholding any
income tax; and
C-24
(b) where the beneficial owners are Qualifying Foreign Non-Individual Stapled
Securityholders where the Stapled Securities are held by nominee Stapled
Securityholders who can demonstrate that the Stapled Securities are held for
beneficial owners who are Qualifying Foreign Non-Individual Stapled
Securityholders, FH-REIT will withhold tax at a reduced rate of 10% from the
distributions.
A Qualifying Stapled Securityholder
(1)
who is:
(a) An individual;
(b) A tax resident Singapore-incorporated company;
(c) A non-corporate Singapore constituted or registered entity (e.g. registered
charities, town councils, statutory boards, registered co-operative societies and
registered trade unions);
(d) A Singapore branch of a foreign company which has presented a letter of approval
from the IRAS granting a specific waiver from tax deducted at source in respect of
distributions from FH-REIT; or
(e) A nominee who can demonstrate that the Stapled Securities are held for beneficial
owners individuals who fall within the classes of Stapled Securityholders listed in
a. to d. above.
The above tax transparency ruling does not apply to gains from sale of real properties.
Such gains, if they are considered as trading gains, are assessable to tax on FH-REIT.
Where the gains are capital gains, FH-REIT will not be assessed to tax and may
distribute the capital gains to Stapled Securityholders without having to deduct tax at
source. Any distributions made by FH-REIT Stapled Securityholders out of tax-exempt
income and income taxed in the hands of the REIT trustee would be exempt from
Singapore income tax in the hands of all stapled Securityholders, regardless of their
corporate or residence status.
Note:
(1) Does not include a person acting in the capacity of a trustee.
(iv) Tax exempt income
For the Properties located outside Singapore, FH-REIT has obtained tax rulings
(Foreign Sourced Income Tax Exemption Rulings) from IRAS on the Singapore
taxation of certain income originating from the properties located in Australia, the United
Kingdom, Japan and Malaysia.
Subject to the terms and conditions of the Foreign Sourced Income Tax Exemption
Rulings, certain income received by FH-REIT and the Singapore Subsidiaries
originating from the properties located in Australia, the United Kingdom, Japan and
Malaysia will be tax exempt in Singapore. Distribution of such income to Stapled
Securityholders will not be subject to any further tax in Singapore.
Finance Costs
Finance costs consist of interest expense on borrowings, commitment fee, legal fees and
upfront debt establishment fees incurred in relation to debt facilities.
C-25
Interest expenses on borrowings are recognised in the statement of total return using the
effective interest method. Expenses incurred in connection with the arrangement of debt
facilities are recognised in the statement of total return on an effective interest basis over the
period for which the debt facilities are granted.
Net Assets Attributable to Holders of FH-REIT
Net assets attributable to holders of FH-REIT Units represent the holders residual interest
in Pro Forma Groups net assets upon termination and are classified as equity.
Expenses incurred in connection with the initial public offering of FH-REIT Units and listing
on the SGX-ST are deducted directly against net assets attributable to holders of FH-REIT
Units.
Revenue Recognition
(a) Rental Income
Rental income receivable under operating leases is recognised in the Statement of Total
Return on a straight-line basis over the term of the lease.
(b) Interest Income
Interest income is recognised in the Statement of Total Return using the effective
interest method.
Foreign Currencies
Foreign Currency Transactions and Translations
Transactions in foreign currencies are translated to the respective functional currencies of
Pro Forma Group entities at exchange rates at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the reporting date are retranslated
at the exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that the
fair value was determined. Non-monetary items in a foreign currency that are measured in
terms of historical cost are translated using the exchange rate at the dates of the transaction.
Foreign currency differences arising from retranslation are recognised in the Statement of
Total Return.
Related Parties
A related party is defined as follows:
(i) A person or a close member of that persons family is related to the Trust if that person:
(a) Has control or joint control over the Trust;
(b) Has significant influence over the Trust; or
(c) Is a member of the key management personnel of the Trust or REIT Manager or
of a parent of the Trust.
C-26
(ii) An entity is related to the Trust if any of the following conditions applies:
(i) The entity and the Trust are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or
joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of
the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of an
entity related to the Trust. If the Trust is itself such a plan, the sponsoring
employers are also related to the Trust;
(vi) The entity is controlled or jointly controlled by a person identified in (i);
(vii) A person identified in (i)(a) has significant influence over the entity or is a member
of the key management personnel of the entity (or of a parent of the entity).
Segment Reporting
The Groups operating business segments are namely hotels and serviced residences.
Serviced residences comprise service apartments. The Group operates in five geographical
areas, namely, Singapore, Australia, United Kingdom, Japan and Malaysia. Geographical
segment revenue are based on geographical location of the Groups revenue generating
properties. Geographical segment assets are based on geographical location of the Groups
assets. Segment accounting policies are the same as the policies described above.
Inter-segment transactions are based on terms agreed between the related companies.
Revenue and non-current assets information based on the geographical location of revenue
generating properties and assets respectively are as follows:
Gross Revenue Non-current assets
FY2011 FY2012 FY2013
Q1
FY2013
Q1
FY2014
As at
30 September
2013
As at
31 December
2013
S$000 S$000 S$000 S$000 S$000 S$000 S$000
Singapore 29,786 28,618 34,389 8,712 8,165 824,050 824,050
Australia 16,787 17,008 17,674 4,521 4,791 198,687 190,878
Japan 17,994 19,041 15,696 5,346 4,493 142,848 134,447
Malaysia 10,229 11,704 11,548 2,964 3,325 176,898 175,696
United Kingdom 10,047 17,509 18,276 4,209 5,260 306,632 320,033
84,843 93,880 97,583 25,752 26,034 1,649,115 1,645,104
C-27
2. Gross Revenue
Gross revenue represents rental income received/receivable on FH-REITs investment
properties.
3. Finance Costs
FY2011 FY2012 FY2013
Q1
FY2013
Q1
FY2014
(S$000) (S$000) (S$000) (S$000) (S$000)
Interest paid and payable to banks 14,653 14,376 13,956 3,691 3,420
Amortisation of debt upfront costs 1,588 1,588 1,588 397 397
16,241 15,964 15,544 4,088 3,817
4. Investment Properties
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Investment properties 1,648,798 1,645,015
The investment properties are carried at cost upon purchase. The purchase price is
determined based on the valuation of the independent valuers. Independent valuations of the
investment properties were undertaken by Jones Lang La Salle, Colliers International and
CBRE as of 31 December 2013. These firms are independent valuers having appropriate
professional qualifications and recent experience in the location and categories of the
properties being valued.
5. Borrowings
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Bank borrowings 721,357 719,912
Less: Debt upfront costs capitalised (7,125) (7,105)
Borrowings (net) 714,232 712,807
As at 30 September 2013, the Pro Forma Group has drawn down approximately S$604
million of the TLF, S$50 million of the RCF, approximately JPY 2.35 billion (equivalent to
approximately S$30 million) of Kobe Excellence TMK bond and MYR95 million (equivalent to
approximately S$37 million) of Senior MTNs. As at 31 December 2013, the Pro Forma Group
has drawn down approximately S$605 million of the TLF, S$50 million of the RCF,
approximately JPY 2.35 billion (equivalent to approximately S$28 million) of Kobe Excellence
TMK bond and MYR95 million (equivalent to approximately S$37 million) of Senior MTNs.
C-28
6. Net Assets Attributable to holders of Stapled Securities
As at
30 September 2013
As at
31 December 2013
(000) (000)
Stapled Securities in issue (units) 1,192,628 1,192,628
(S$000) (S$000)
Stapled Securities in issue (amount) 1,049,513 1,049,513
Issue and acquisition costs
(1)
(53,699) (53,887)
Net assets attributable to holders of Stapled
Securities 995,814 995,626
(1) Issue and acquisition costs comprise the following:
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Underwriting and selling commission 8,445 8,423
Professional and other fees 17,189 17,186
Miscellaneous issue expenses 2,419 2,419
Stamp duties 25,646 25,859
Total 53,699 53,887
Each unit in FH-REIT represents an undivided interest in FH-REIT. The rights and interests
of holders of Stapled Securities are contained in the Trust Deed and include the rights to:
(i) receive income and other distributions attributable to the units held;
(ii) participate in the termination of FH-REIT by receiving a share of all net cash proceeds
derived from the realisation of the assets of FH-REIT less any liabilities, in accordance
with their proportionate interests in FH-REIT. However, a holder of the Stapled
Securities does not have the right to require any assets (or part thereof) of FH-REIT be
returned to him;
The restrictions of a holder of the Stapled Securities include the following:
(i) a holder of the right is limited to the right to require due administration of FH-REIT in
accordance with the provisions of the Trust Deed; and
(ii) a holder of the Stapled Securities has no right to request to redeem his units while his
units are listed on SGX-ST.
The liability of a holder of the Stapled Securities is limited to the amount paid or payable for
any unit in FH-REIT. The provisions of the FH-REIT Trust Deed provide that no holders of the
Stapled Securities will be personally liable to indemnify the REIT Trustee or any creditor of
FH-REIT in the event that the liabilities of FH-REIT exceed its assets.
Under the FH-REIT Trust Deed, every Stapled Securities carries the same voting rights.
C-29
7. Financial Instruments
Financial Risk Management Objectives and Policies
Exposure to credit, currency, interest rate and liquidity risks arises in the normal course of
FH-REITs business. There are written policies and guidelines, which set out its overall
business strategies and its general risk management philosophy.
Credit Risk
Pro Forma Group objective is to seek continual revenue growth while minimising losses
incurred due to increased credit risk exposure. Credit evaluations are performed by the REIT
Manager before lease agreements are entered into with lessees. Cash and cash equivalents
are placed with financial institutions which are regulated.
At the Pro Forma balance sheet date, the investment properties of FH-REIT are leased to
Master Lessees with good credit standing. The maximum exposure to credit risk is
represented by the carrying value of each financial asset on the balance sheet.
Interest Rate Risk
The Pro Forma Groups exposure to changes in interest rates relate primarily to interest-
earning financial assets and interest-bearing financial liabilities.
Foreign Currency Risk
The Pro Forma Groups investment strategy is to invest, directly or indirectly, in a diversified
portfolio of income-producing real estate in Singapore and overseas, used primarily for
hospitality purposes.
The Pro Forma Group has transactional currency exposures arising from transactions that
are denominated in a currency other than the respective functional currencies of the entities
within the Pro Forma Group. The entities within the Pro Forma Group customarily conducted
their business in their respective functional currencies.
The Trust foreign currency risk mainly relates to income from its overseas assets and
borrowings. The Manager monitors the Trust foreign currency exposure on an on-going basis
and limits its exposure to adverse movements in foreign currency exchange rates by using
derivative financial instruments or other suitable financial products.
It is the Managers policy to fix the Trusts anticipated foreign currency exposure in respect
of distribution income, net of anticipated payments required in the same currency, from its
overseas assets at least six month forward by using foreign currency forward exchange
contracts and certain currency derivatives.
Investments in overseas assets are hedged naturally to the extent that borrowings are taken
up in their respective foreign currency. The net positions of the forex exchange risk of these
investments in overseas assets are not hedged as such investments are long term in nature.
Liquidity Risk
Liquidity risk is the risk that the Pro Forma Group will encounter difficulty in meeting its
financial obligations due to shortage of funds. The Manager monitors and maintains a level
of cash and cash equivalents deemed adequate to finance the Pro Forma Groups operations
C-30
for a reasonable period, including the servicing of financial obligations, and to mitigate the
effects of fluctuations in cash flows. In addition, the Manager also monitors and observes the
CIS Code issued by the MAS concerning limits on total borrowings.
Fair Values
The carrying amounts of financial assets and liabilities are reasonable approximation of fair
values, either due to their short-term nature or that they are floating rate instruments that are
re-priced to market interest rates on or near the end of the reporting period.
8. Commitments
FH-REIT entered into leases on its investment properties. Future minimum rental receivable
under non-cancellable operating leases at the end of the reporting period are as follows:
As at
30 September 2013
As at
31 December 2013
(S$000) (S$000)
Receivable
After 1 financial year 48,965 48,705
After 1 financial year but within
5 financial years 184,352 183,389
After 5 financial years 533,739 533,138
767,056 765,232
The above operating lease rental receivables comprise amounts receivable under the Master
Leases and Tenancy.
Rental receivable under the Master Leases and Tenancy are based on the terms of the
Master Lease and Tenancy Agreements as set out in Section G Note (5). The amounts
receivable for such leases are based on the fixed rent as set out in the Master Leases and
Tenancy.
(G) REIT MANAGERS MANAGEMENT FEES, REIT TRUSTEES FEES AND LEASE
PAYMENTS UNDER MASTER LEASE AGREEMENTS
1. REIT Managers Management Fees
The REIT Manager is entitled under the FH-REIT Trust Deed to the following management
fees:
(i) Base Fee of 0.3% per annum of the value of the FH-REITs Deposited Property (being
the gross assets of FH-REIT, as stipulated in the FH-REIT Trust Deed); and
(ii) Performance Fee of 5.5% per annum of the Distributable Income (as defined in the
FH-REIT Trust Deed) of FHT in the relevant financial year (calculated before accounting
for the REIT Performance Fee and BT Performance Fee).
There should be no double-counting of fees. In the event that both the REIT Manager and the
Trustee-Manager are entitled to the Performance Fee, such fees payable to both the REIT
Manager and the Trustee-Manager will be apportioned based on the respective proportionate
C-31
contributions of FH-REIT and FH-BT in the Performance Fee
1
. For the avoidance of doubt,
the maximum Performance Fee payable to both the REIT Manager and the Trustee-Manager
collectively is 5.5% per annum of the aggregate Distributable Income of FHT in the relevant
financial year (calculated before accounting for the Performance Fee).
The management fees payable to the REIT Manager will be reduced by the other asset
management fees paid by FH-REIT and its subsidiaries.
It is assumed that 100.0% of the management fees payable to the REIT Manager will be paid
in the form of Stapled Securities or (in the event that Unstapling of the FH-REIT Units and
FH-BT Units has taken place) FH-REIT Units issued at the market price (as defined in the
FH-REIT Trust Deed) prevailing at the date of.
Any increase in the maximum permitted rate or any change in the structure of the REIT
Managers management fees must be approved by an Extraordinary Resolution at a meeting
of holders of the FH-REIT Units duly convened and held in accordance with the provisions
of the FH-REIT Trust Deed.
The aforementioned basis has been used to compute the REIT Managers management fees
for the purposes of the unaudited pro forma financial information of FH-REIT.
2. Other Management Fees
MIT Managers Management Fee
The MIT Manager is entitled to a management fee comprising a base fee of 0.3% per annum
of the total value of the property of MIT Australia and a performance fee of 5.5% of the
aggregate earnings before interest, taxes, depreciation and amortisation of MIT Australia in
the relevant financial year, as stipulated in the Investment Management Agreement for MIT
Australia.
It is assumed that 100.0% of the MIT Managers management fees were paid in Stapled
Securities. Where the management fees are payable in Stapled Securities, the MIT Manager
has assumed that such Stapled Securities are issued at the Offering Price. The
aforementioned basis has been used to compute the MIT Managers management fees for
the purposes of the unaudited pro forma financial information of FH-REIT.
Kobe Asset Managers Management Fee
The Kobe Asset Manager is entitled to:
(i) an annual management fee of JPY14.0 million (exclusive of consumption tax);
(ii) where the disposition of ANA Crowne Plaza Kobe (or any part thereof, directly or
indirectly, including the disposition of the equity shares in Kobe Excellence TMK or any
restructuring involved in the disposition) occurs, Kobe Excellence TMK shall pay to the
Kobe Asset Manager an additional fee (Additional Fee), which shall be determined at
the time of the disposition based on consultation between the parties on good faith, for
the additional services rendered by the Kobe Asset Manager for the disposition,
provided that no disposition fee is payable to the Kobe Asset Manager for the
disposition of ANA Crowne Plaza Kobe as part of the Listing; and
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
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(iii) a brokerage services fee for brokerage services rendered by the Kobe Asset Manager
for the disposition of ANA Crowne Plaza Kobe (or any part thereof, directly or indirectly,
including the disposition of the equity shares in Kobe Excellence TMK or any
restructuring involved in the disposition), the amount of which shall be determined at the
time of the disposition based on consultation between the parties on good faith, payable
separately from the Additional Fee, upon the completion of the disposition through the
brokerage services provided by the Kobe Asset Manager.
The management fees are payable in the form of cash.
The aforementioned basis has been used to compute the Kobe Asset Managers
management fees for the purposes of the unaudited pro forma financial information of
FH-REIT.
ABS Servicer Fee
Servicer fee (exclusive of applicable service tax or goods and services tax), payable in
arrears on a semi-annual basis (save and except for the first and the last servicing period)
which is equivalent to an amount of MYR360,000.
3. Trustees Fees
REIT Trustees Fee
Pursuant to the FH-REIT Trust Deed, the REIT Trustees fee is presently charged on a scaled
basis of up to 0.015% per annum of the value of the FH-REIT Deposited Property, subject to
a minimum of S$15,000 per month, excluding out-of-pocket expenses and GST.
MITs and MIT Sub-Trustees Fees
The MIT Trustees fee and MIT Sub-trustees fees are AUD55,000 per annum and
AUD15,000 per annum per sub-trust respectively, excluding out-of-pocket expenses and
GST. As there are two MIT Sub-trusts, the aggregate fee payable to the MIT Sub-trustee is
AUD30,000 per annum.
TMK Trustee Fee
The TMK Trustees fee is JPY5.4 million per annum.
Malaysian Trustees Fee
The Malaysian Trustees fee is MYR60,000 per annum.
Any increase in the maximum permitted amount or any change in the structure of the
Trustees fee must be approved by an Extraordinary Resolution at a meeting of holders of the
FH-REIT Units duly convened and held in accordance with the provisions of the FH-REIT
Trust Deed.
The aforementioned basis has been used to compute the Trustees fees for the purpose of
the Unaudited Pro Forma Financial Information.
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4. Trustee-Managers Fees
The Trustee-Manager is entitled to:
(a) a management fee comprising a Base Fee of 0.3% per annum of the value of the FH-BT
Trust Property and a Performance Fee of 5.5% of the aggregate Distributable Income
of FHT in the relevant financial year (calculated before accounting for the REIT
Performance Fee and BT Performance Fee), payable in the event that FH-BT becomes
active; and
(b) a trustee fee of a maximum of 0.1% per annum of the value of the FH-BT Trust Property,
subject to a minimum fee of S$10,000 per month provided that the value of the FH-BT
Trust Property is at least S$50.0 million, payable in the event that FH-BT becomes
active.
In relation to the Performance fee, there should be no double-counting of fees. In the event
that both the Trustee-Manager and the REIT Manager are entitled to the Performance Fee,
such fees payable to both the Trustee-Manager and the REIT Manager will be apportioned
based on the respective proportionate contributions of FH-REIT and FH-BT in the
Performance Fee
1
. For the avoidance of doubt, the maximum Performance Fee payable to
both the Trustee-Manager and the REIT Manager collectively is 5.5% per annum of the
aggregate Distributable Income of FHT in the relevant financial year (calculated before
accounting for the Performance Fee).
For the purposes of the Unaudited Pro Forma Financial Information, it is assumed that FH-BT
is dormant.
5. Lease Payments under the Master Lease or Tenancy Agreements
Under the terms of the Master Lease or Tenancy Agreements, FH-REIT will be entitled to an
annual rental payment for the duration of the term of each Master Lease or Tenancy
Agreement (as the case may be) comprising a Fixed Rent and a Variable Rent.
Hotel Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of
Gross Operating Revenue and
Percentage of Gross Operating
Profit less Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
InterContinental Singapore SGD 8,000 0.0 76.0
Novotel Rockford Darling Harbour AUD 2,500 0.0 84.0
Park International London GBP 1,300 0.0 91.5
Best Western Cromwell London GBP 600 0.0 91.5
ANA Crowne Plaza Kobe JPY 600,000 0.0 77.8
The Westin Kuala Lumpur MYR 14,800 0.0 78.5
Note:
(1) May include unutilised FF&E reserve not carried forward to the following year.
1
In the event that one of FH-REIT and FH-BT generates negative Distributable Income in the relevant financial year
while the other stapling entity generates positive Distributable Income, such other stapling entity shall be entitled to
the whole amount of the Performance Fee.
C-34
Serviced Residence Currency
Fixed Rent
(000)
Variable Rent
(Sum of Percentage of
Gross Operating Revenue and
Percentage of Gross Operating
Profit less Fixed Rent
(1)
)
Percentage of
Gross Operating
Revenue (%)
Percentage of
Gross Operating
Profit (%)
Fraser Suites Singapore SGD 7,700 20.0 59.0
Fraser Suites Sydney AUD 4,200 20.0 54.5
Fraser Place Canary Wharf GBP 1,400 20.0 65.0
Fraser Suites Queens Gate GBP 1,800 20.0 67.0
Fraser Suites Glasgow GBP 400 20.0 50.0
Fraser Suites Edinburgh GBP 500 20.0 45.0
Note:
(1) May include unutilised FF&E reserve not carried forward to the following year.
Should the calculation of the Variable Rent yield a negative figure, the overall rent will then
be the Fixed Rent amount. It is assumed that there is no unutilised FF&E reserves, hence,
there is no such element in variable rent.
C-35
This page has been intentionally left blank.
APPENDIX D
INDEPENDENT PROPERTY VALUATION SUMMARY REPORTS
CBRE Pt
The Boar
Frasers H
(as mana
438 Alex
#21-00
Singapo
The Trus
(as truste
8 Marina
#05-02
Singapo
The Boar
Frasers H
(as truste
438 Alex
#21-00
Singapo
18 June
Dear Sir/
Valuatio
Instructio
We refer
respect o
manage
Value of
We have
accordan
namely:
te. Ltd.
rd of Directo
Hospitality As
ager of Frase
xandra Road
Alexandra P
re 119958
t Company (
ee of Frasers
a Boulevard
Marina Bay
re 018981
rd of Directo
Hospitality Tr
ee-manager
xandra Road
Alexandra P
re 119958
2014
/Madam
on of 10 Ho
ons
r to instructi
of the 10 hos
d by a propo
the Propertie
e prepared a
nce with the
rs
sset Manage
ers Hospitalit
oint
(Asia) Limited
Hospitality R
Financial Ce
rs
rust Managem
of Frasers Ho
oint
ospitality Ass
ons issued b
spitality asset
osed REIT. W
es as at 31 D
comprehens
requiremen
ment Pte. Ltd
ty Real Estate
d
Real Estate In
entre
ment Pte. Ltd
ospitality Bus
sets in Asia
by Frasers C
s in Asia and
We have spe
December 20
sive formal v
ts of our ins
Page 1
d.
e Investment T
nvestment Tru
.
siness Trust)
and the Un
Centrepoint L
d the United
ecifically bee
013 for Initial
valuation rep
structions an
Trust)
ust)
nited Kingdo
Limited reque
Kingdom (the
en instructed
l Public Offer
ort for each
nd the follow
om
esting forma
e Properties
to provide o
ring purpose
of the Proper
wing definitio
6 B
Co. R
Agency Li
al valuation
s) to be acqu
our opinion o
es.
rties (the Re
on of Marke
attery Road #
Singapore 04
T (65) 6224
F (65) 6225
www.cbre.
Reg. No.: 19770
cence No.: L30
advice in
uired and
of Market
eports) in
et Value,
#32-01
49909
4 8181
5 1987
com.sg
01161R
02163I
D-1
Market
valuation
marketin
For the s
of units i
have be
reflects a
Propertie
We have
Singapo
$1.65 m
half peri
support i
Reliance
For the
outlines
letter alo
further in
are held
months f
CBRE ha
valuation
with the
t
i
T
f
V
a
f
a
Value is the
n between a
ng wherein th
specific purp
n the REIT (th
en considere
all informatio
es, market co
e been advise
re and Frase
million for the
od for the tw
into consider
on this Lette
purpose of
the key facto
one does not
nformation to
by the Man
from the date
as provided
n and marke
following:
Each report i
based upon
the accuracy
provided by
investment i
methodology
The methodo
Discounted C
future results
Valuation Ra
assumptions
local market
for estimate
practice estim
upon the acc
assumptions
letter.
e estimated a
a willing buy
e parties had
oses of the P
he Prospectu
ed in arrivin
on known by
onditions and
ed that an ag
er Suites Sin
first two fina
wo properties
ration.
er
the Prospect
ors which ha
t contain the
o that contai
nager and wh
e of the Prosp
the Manag
et informatio
is approxima
the factual in
y of the fac
the Manage
in the REIT
y and the ma
ologies used
Cash Flow A
s and are no
ationale secti
as to incom
t. The incom
d changes
mate but is n
curacy of the
utilised for
amount for w
yer and a w
d each acted
Prospectus to
us), we prov
g at our op
y the valuers
d available da
greement for
gapore. An
ancial years f
s respectively
tus, we have
ave been co
necessary d
ned herein,
hich we unde
pectus.
er with com
on are not gu
ately 70 page
nformation w
ctual inform
r or other so
should rev
any variables
by CBRE in
nalysis and D
ot prediction
on of this let
me and expe
e and expen
in economic
ot to be con
assumptions
the Hotels a
Page 2
which an ass
willing seller
d knowledgea
o be issued b
vide a summ
pinion of Ma
s of CBRE w
ata.
r an Income S
aggregate p
from the listin
y. We have i
e prepared t
nsidered in
data and sup
reference sh
erstand will
mprehensive
uarantees or
es in length a
within the Rep
ation, it ha
urces. CBRE
view the Re
s involved.
valuing the
Direct Comp
s. These val
tter. Each of
enses of the
nse figures a
c conditions.
strued as a p
s as to incom
are summari
et or liability
in an arm's
ably, prudent
by the Manag
ary of the Re
arket Value.
ho worked o
Support is pu
property inco
ng date is pa
n our valuat
this letter wh
arriving at o
pport informa
ould be mad
be available
formal valu
r predictions
and the conc
ports. Whilst
s not indep
believes that
ports to un
Hotels Ca
parison Metho
uation meth
the income
Hotels and f
are mathema
The resulta
prediction or
me, expenses
sed in the V
y should exch
s length tran
ly, and witho
ger in connec
ports outlinin
The conclus
on the valua
ut in place fo
ome top-up o
ayable at the
tion assessme
hich summar
our opinion o
ation include
de to the Rep
for inspectio
ation reports
and must b
clusion as to t
CBRE has en
endently ver
t every invest
derstand th
apitalisation
od are bas
odologies ar
methodology
future econo
atically exten
ant value is
guarantee a
and market
Valuation Rat
hange on th
nsaction afte
out compulsio
ction with the
ng the key fa
sion on Mark
ation in respe
or the InterCo
of $8.05 mi
end of each
ent taken thi
rises our Rep
of Market va
ed in our Rep
ports, copies
on for a per
ts of the Ho
be read in co
the estimated
ndeavoured
rified all inf
tor, before m
he complexit
of Income A
sed upon est
re summaris
y begins with
omic conditio
ded with ad
considered
and is fully d
t conditions. T
tionale sectio
e date of
er proper
on.
e offering
actors that
ket Value
ect to the
ontinental
illion and
financial
is income
ports and
alue. This
ports. For
of which
iod of six
otels. The
onnection
d value is
to ensure
formation
making an
ty of the
Approach,
timates of
ed in the
h a set of
ons in the
justments
the best
ependent
The basic
on of this
D-2
t
a
y
a
w
T
e
i
Valuation
In arrivin
particula
compara
the prop
Analysis
Capitalis
As our p
valuation
Approac
2013/14
which fo
stream i
market c
the effec
InterContine
the basis of t
be occupied
be terminate
agreement.
Frasers Suite
London, Fra
Park Internat
years leases.
agreement. T
with vacant p
The Reports
each Report
income, expe
n Rationale
ng at our op
ar have inve
able properti
perty. Our as
and Direct C
sation Analys
rimary valua
n which is t
ch. The Initia
4 or Financia
oreseeable ci
s expected t
conditions, a
ct of capital e
Ho
Int
We
AN
Fra
Fra
Fra
Fra
Fra
Pa
Be
ntal Singapo
the existing t
in accordan
ed on sale so
es Singapore
ser Place Qu
tional Londo
. Again of the
The master le
possession.
have been u
t. CBRE acce
enses or mar
pinion of valu
estigated a
es. We have
ssessment ha
Comparison.
sis
ation approac
he capitalisa
al Year Inco
al Year 2014
rcumstances
o vary great
recovering o
expenditure.
otels
erContinenta
estin Kuala L
NA Crowne P
aser Suites S
aser Place C
aser Place Q
aser Suites G
aser Suites E
ark Internatio
est Western C
ore, Westin K
enure. Each
nce with a su
o that each
e, Fraser Pla
ueens Gate
on and Best W
ese propertie
ease may be
ndertaken ba
epts no resp
rket condition
ue, we have
broad range
also reviewe
as been mad
ch, we have
ation of Initi
ome approa
4) and capita
are known.
ter than the
or declining
This analysi
al Singapore
Lumpur
Plaza Kobe
Singapore
Canary Whar
Queens Gate
Glasgow
dinburgh
nal London
Cromwell Lon
Page 3
Kuala Lumpu
of these pro
ubsidiary ma
property will
ace Canary
London, Fra
Western Cro
es is to be su
e terminated
ased on info
ponsibility fo
ns.
considered r
e of market
ed historic tra
de utilising C
utilised meth
al Year 1 in
ach adopts t
alises that in
The Stabilis
rate of unde
business flow
is takes into
Cu
e SG
MY
JPY
SG
rf LondonGB
London GB
GB
GB
GB
ndon GB
r and ANA C
perties is to
anagement a
be subject
Wharf Lond
aser Suites G
omwell Londo
bject a mast
on sale so th
ormation ava
or subsequen
relevant gen
t evidence a
ading levels a
Capitalisation
hods of incom
ncome appr
the forecast
ncome at a r
sed Year App
erlying inflat
wing an inter
account the
rrency
No
Ro
GD 40
YR 44
Y 59
GD 25
BP 10
BP 10
BP 98
BP 75
BP 17
BP 85
Crowne Plaza
be subject a
agreement. T
only to the r
don, Fraser
Glasgow, Fra
on are value
er lease but
hat each prop
ilable as at t
nt changes
eral and eco
and the trad
and the futur
n Analysis, D
me capitalisat
roach and/o
Year 1 inc
rate reflected
proach is use
tion due to f
rnal or extern
forecast inc
o. of
oms T
03 76 y
43 Fr
93 Fr
55 75 y
08 75 y
05 75 y
8 75 y
5 75 y
71 75 y
5 75 y
a Kobe are v
master lease
The master le
relevant man
Place Quee
ser Suites Ed
ed on the ba
not any man
perty will be
he respective
in informati
onomic facto
ding perform
re trading po
Discounted C
tion practice
or the Stabili
come (Finan
d in sales ev
ed where th
foreseeable
nal event, or
come over to
Tenure
year lease
reehold
reehold
year lease
year lease
year lease
year lease
year lease
year lease
year lease
valued on
e and will
ease may
nagement
ens Gate
dinburgh,
asis of 75
nagement
available
e dates of
on as to
ors and in
mance of
otential of
Cash flow
d in hotel
sed Year
cial Year
vidence in
e income
changing
to reflect
o the time
D-3
taken fo
expendit
Discount
As a sec
year inve
analysis
derived
investme
target or
investme
property
Income S
We have
aggrega
is payab
We have
follows:
I. For Ap
If GOP
II. For O
If GOP
III. For A
If GOP
FHT can
Income S
We have
aggrega
is payab
income s
We have
follows:
I. For Ap
If GOP
or the incom
ure required
ted Cash Flow
condary meth
estment hori
allows an inv
from a prop
ent horizon.
r pre-selected
ent horizon,
and also its
Support for In
e been advis
te property i
le at the end
e been advis
pr Sep 2014
P falls below
ct 2014 to M
P falls below
Apr Sep 201
P falls below
draw down
Support for F
e been advis
te property i
ble at the en
support into c
e been advis
pr Sep 2014
P falls below
me to have
to achieve th
w Analysis
hod of valua
zon which a
vestor or ow
perty with a
In undertaki
d internal rat
potential ca
disposal at t
nterContinen
sed that an a
ncome top-u
d of each fina
sed that ther
4 (1st half ye
[S$14m], FH
Mar 2015 (2n
[$16m], FHT
15 (3rd half y
[$14m] for t
the balance
Fraser Suites
sed that an a
ncome top-u
nd of each fi
consideration
sed that ther
4 (1st half ye
[$9m], FHT
stabilised fr
he expected
ation, we hav
assumes that
ner to make
combinatio
ng this analy
te of return, i
apital expend
the end of the
ntal Singapor
agreement fo
up of $8.05 m
ancial half pe
re is to be a
ear period)
HT can draw-
nd half year p
T can draw-d
year period)
he 3rd half y
of the $8.05
Singapore
agreement fo
up of $1.65 m
nancial half
n.
re is to be a
ear period)
can draw-do
Page 4
rom the effe
income is de
ve carried ou
the Hotel is
an assessme
n of both in
ysis, a wide
income grow
diture, costs
e investment
re
or an Income
million for th
eriod.
an income to
-down [$2.15
period)
down [$3.15m
year period O
5m that is und
or an Income
million for th
period. We
an income to
own [$0.65m
ect of the fo
educted from
ut a discount
s sold at the
ent of the lon
ncome and
range of as
wth, sale price
s associated
period.
e Support is
he first two fin
op up of $8
5m]
m]
OR [$30m] fo
drawn.
e Support is
he first two fin
have in ou
op up of $1
m]
oreseeable c
the core val
ted cash flow
end of that
nger term ret
capital grow
ssumptions a
e of the prop
with the in
put in place
nancial years
8.05m, half y
or the full yea
put in place
nancial years
r valuation a
.65m, half y
circumstance
ue.
w analysis ov
t period. This
turn that is lik
wth over an
are made inc
perty at the e
itial purchas
e for this pro
s from the lis
yearly draw-
ar ending Se
e for this pro
s from the lis
assessment t
yearly draw-
. Capital
ver a five
s form of
kely to be
assumed
cluding a
end of the
se of the
operty. An
sting date
-down as
p 2015,
operty. An
sting date
taken this
-down as
D-4
II. For O
If GOP
III. For A
If GOP
FHT can
Master L
A maste
advice o
rental am
Pro
Ho
1 Inte
2 Par
3 Bes
4 AN
5 We
Ser
6 Fra
7 Fra
8 Fra
9 Fra
10 Fra
* Variable
Summar
Hotels
1 InterCo
2 Westin
3 ANA C
4 Fraser
5 Fraser
6 Fraser
7 Fraser
8 Fraser
9 Park In
10 Best W
ct 2014 to M
P falls below
Apr Sep 201
P falls below
draw down
Lease Agreem
r lease agre
on the rental
mounts are a
operties
otels
erContinental
rk Internationa
st Western Cr
NA Crowne Pla
estin Kuala Lu
rviced Resid
aser Suites Sin
aser Place Ca
aser Place Qu
aser Suites Gl
aser Suites Ed
e Rent refers to
ry of Valuatio
ontinental Singap
n Kuala Lumpur
Crowne Plaza Ko
r Suites Singapor
r Place Canary W
r Place Queens G
r Suites Glasgow
r Suites Edinburg
nternational Lond
Western Cromwel
Mar 2015 (2n
[$9m], FHT
15 (3rd half y
[$9m] for the
the balance
ment
ement will b
level. It is o
at market leve
Singapore
al London
romwell Lond
aza Kobe
umpur
dences
ngapore
anary Wharf L
ueens Gate Lo
asgow
inburgh
the Sum of % o
ons
Cu
pore SG
MY
obe JPY
re SG
Wharf LondonGB
Gate London GB
w GB
h GB
don GB
ll London GB
nd half year p
can draw-do
year period)
e 3rd half ye
of the $1.65
e entered in
our opinion
els and the te
Curren
SG
GB
on GB
JP
MY
SG
London GB
ondon GB
GB
GB
of Gross Opera
urrency
No. of
Rooms
GD 403
YR 443
Y 593
GD 255
BP 108
BP 105
BP 98
BP 75
BP 171
BP 85
Page 5
period)
own [$0.5m]
ear period O
5m that is und
to for each
that based o
erms of the le
ncy Base R
GD 8,000
BP 1,300
BP 600,
PY 600,00
YR 14,80
GD 7,700
BP 1,400
BP 1,800
BP 400,
BP 500,
ting Revenue a
f
s Tenure
76 year leas
Freehold
Freehold
75 year leas
75 year leas
75 year leas
75 year leas
75 year leas
75 year leas
75 year leas
R [$18m] for
drawn.
of the Prope
on the propo
ease agreem
ent
% o
Op
Re
0,000 0
0,000 0
,000 0
00,000 0
0,000 0
0,000 2
0,000 2
0,000 2
,000 2
,000 2
nd % of Gross
Value
se 490,00
445,00
10,900,00
se 305,00
se 31,50
se 46,29
se 6,90
se 11,50
se 37,70
se 15,70
r the full year
rties. We ha
osed lease st
ment are typic
of Gross
perating
evenue
%
O
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Operating Prof
Variable Re
e Value P
00,000 1,
00,000 1,
00,000 18,
00,000 1,
00,000
90,000
00,000
00,000
00,000
00,000
r ending Sep
ave been req
tructure, the
cal of market
R
% of Gross
Operating
Profit
%
O
R
76.00%
91.50%
91.50%
77.80%
78.50%
60.00%
65.00%
67.00%
52.00%
47.00%
fit less Base Ren
ent
Per Room
Va
Incom
215,881 49
004,515
381,113
196,078 30
291,667
440,857
70,408
153,333
220,468
184,706
2015,
uested to
resultant
norms.
FF&E
Reserves
of Gross
Operating
Revenue
4.00%
3.00%
3.00%
3.00%
4.00%
2.50%
2.50%
2.50%
2.50%
2.50%
nt
lue With
me Support
7,500,000
n.a
n.a
06,500,000
n.a
n.a
n.a
n.a
n.a
n.a
D-5
Disclaim
CBRE ha
disclaim
included
Report a
accuracy
by CBRE
CBRE ha
takes no
data.
The repo
condition
no prese
party/s i
value or
attainme
Yours sin
CBRE Pte
Robert M
Executive
er
ave prepared
liability to a
in the Prosp
and this Valu
y of the infor
in this letter.
as relied upo
o responsibili
ort analyses,
ns and are o
ent or prospe
nvolved. The
direction in
ent of a stipu
ncerely
e. Ltd.
McIntosh, BSc
e Director C
d this Valuati
any person
pectus, other
uation Summ
rmation in an
.
on data supp
ity for inaccu
opinions and
our personal,
ective interest
e valuers co
value that f
lated result, o
c, FRICS, FAP
CBRE Hotels, A
on Summary
in the event
than in resp
mary Letter. C
ny other part
lied by the M
urate client s
d conclusion
, unbiased p
t in the Hotel
mpensation
avours the c
or the occurr
PI
Asia-Pacific
Page 6
y Letter for t
t of any om
pect to the inf
CBRE do no
t of the pros
Manager whi
supplied data
s are limited
professional a
ls and have
is not contin
causes of the
rence of a su
he inclusion
ission from
formation pr
ot make war
spectus other
ich we assum
a and subseq
only to the r
analyses, opi
no personal
ngent upon t
e client, the a
bsequent eve
in the Prosp
or false or
rovided within
ranty or rep
than as exp
me to be true
quent conclu
reported assu
inions and co
interest or bi
the reporting
amount of th
ent.
pectus and sp
misleading s
n the aforem
presentation
pressly made
e and accura
usions related
umptions an
onclusions. C
ias with resp
g of a prede
he value estim
pecifically
statement
mentioned
as to the
e or given
ate. CBRE
d to such
d limiting
CBRE has
ect to the
etermined
mate, the
D-6
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Income S
Valuation
Date of I
Date of V
Valuation
Value Pe
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
Support:
n Approach:
Inspection:
Valuation:
n:
er Room:
Hotel InterC
Hotel
80 Mi
Singa
Fraser
76 yea
BCH H
487 F
25,98
and o
Com
Hotel
Station
minute
Bugis
Marin
variou
station
The H
The 1
Junctio
and th
suite.
swimm
The p
brand
We ha
place
for the
each
incom
Capita
EBITD
Direct
21-Oc
31-De
S$490
S$1,2
Continental S
InterContine
ddle Road
pore 188966
rs Centrepoin
ars leasehold
Hotel Investm
ol 180)
86 square me
ffice tower).
mercial, un
InterContine
n. Approxima
es away fro
district and
a Bay area
us attractions
n as part of t
otel InterCon
6-storey hot
on, which co
he hotel. It
Other faciliti
ming pool an
property is c
.
ave been ad
for this prop
e first two fin
financial ha
me support int
alisation of I
A, 5 Year D
Comparison
ctober-2013
ecember-201
0,000,000 (F
15,881
Page 7
Singapore
ental Singapo
6 Singapore
nt Limited.
d, subject to t
ments Pte Ltd
etres (For wh
der the URA
ental is locat
ately 2 km f
m Changi I
near to the
. Bugis MRT
s around S
he Downtow
ntinental, Sin
tel is part o
omprises a re
comprises 4
ies in the hot
nd a business
urrently man
dvised that a
perty. An agg
nancial year
lf period. W
to considerat
nitial (Foreca
Discounted C
n.
and 29-May
13
Four Hundred
ore
e
the proposed
(As registere
hole of land
Master Plan
ted along Vi
rom the city
nternational
Arab Street,
T Station, w
ingapore, is
wn MRT line in
ngapore is a
of the integr
etail mall, a
403 units, inc
tel include re
s centre.
naged and
an agreemen
gregate prop
s from the li
We have in o
tion.
ast Year 1) E
Cash flow, 1
y-2014
d Ninety Mill
d master leas
ed on Strata
lot and inclu
2008.
ctoria Street
centre at Ra
Airport. The
, Chinatown
which provide
s slated to
n late 2013.
upscale hote
rated mixed-
n office towe
cluding 17 s
staurants, a
operated un
nt for an Inc
erty income t
sting date is
our valuation
EBITDA, Stab
0 Year Disc
ion Dollars)
se agreemen
Subsidiary L
uding adjace
t and sits ato
affles Place a
e hotel is lo
, Orchard R
es convenie
become an
el which ope
-use develop
er, Bugis Jun
suites and a
health and f
nder the Inte
come Suppo
top-up of $8
s payable at
n assessment
bilised (Forec
counted Cas
nt.
Land Title Vo
ent retail mal
op Bugis Mr
and about 28
ocated in the
Road and the
nt access to
interchange
ned in 1995
pment, Bugis
nction Towers
a presidentia
fitness centre
erContinenta
ort is put in
8.05 million
the end of
t taken this
cast 5 Year)
h flow and
ol
l
rt
8
e
e
o
e
.
s
s
l
,
l
D-7
Value wi
Support:
Adopted
th Income
Value Analy
S$ 49
Dollar
ysis: Initia
Stabi
Five Y
Ten Y
7,500,000 (
rs)
l Yield (Fore
lised Year (
Year DCF
Year DCF
Page 8
Four Hundre
ecast Year 1
Forecast Ye
IRR
Termin
IRR
Termin
ed Ninety Sev
EBITDA):
ar 5 EBITDA
al Yield
al Yield
ven Million Fi
A):
ive Hundred
4.03%
3.92%
5.10%
4.25%
6.55%
4.75%
Thousand
D-8
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Westin Kua
The W
199, J
55100
Fraser
Freeho
JBB H
4,051
Com
Within
distan
parts o
The W
2003.
Prego
Daily
execut
parks
The p
Capita
EBITD
Direct
24-Oc
31-De
RM44
RM1,0
ysis: Initia
Stabi
Five Y
Ten Y
ala Lumpur
Westin Kuala
Jalan Bukit B
0 Kuala Lum
rs Centrepoin
old, subject t
OTELS SDN.
square metr
mercial, un
n the city ce
ce south-eas
of the iconic
Westin Kuala
. Facilities
Italian Resta
Treats), ballr
tive club, kid
of approxim
roperty is cur
alisation of I
A, 5 Year D
Comparison
ctober-2013
ecember-201
5,000,000 (
004,515
l Yield (Fore
lised Year (
Year DCF
Year DCF
Page 9
Lumpur
Bintang
pur, Malaysi
nt Limited.
to the propos
. BHD.
res.
der the Kual
entre of Kua
st from the
Kuala Lump
Lumpur com
include 6 re
aurant, Qba
rooms & func
ds club, fitn
mately 302 ba
rrently owner
nitial (Foreca
Discounted C
n.
13
Ringgit Mala
ecast Year 1
Forecast Ye
IRR
Termin
IRR
Termin
a
sed master le
a Lumpur Ci
ala Lumpur
Suria KLCC
ur City Centr
mprises a 443
estaurants (i
Latin Bar an
ction rooms,
ess centre &
ays.
r occupied an
ast Year 1) E
Cash flow, 1
ysia: Four H
EBITDA):
ar 5 EBITDA
al Yield
al Yield
ease agreeme
ty Plan 2020
at approxim
and Petron
re (KLCC) pro
3-room, 5-st
.e. Five Sen
nd Grill, The
recreation fa
& swimming
nd operated
EBITDA, Stab
0 Year Disc
undred And
A):
ent.
0.
mately 1 kilo
nas Twin Tow
oject.
tar hotel whic
n5es Chinese
Living Room
acilities (spa,
pool) and b
under the W
bilised (Forec
counted Cas
Forty Five M
6.64%
6.44%
9.03%
6.50%
9.03%
6.50%
ometre radia
wers forming
ch opened in
e Restaurant
m, Splash and
gymnasium
basement ca
Westin brand.
cast 5 Year)
h flow and
illion)
l
g
n
,
d
,
r
D-9
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
ANA Crown
ANA C
1 Kita
Kobe
Fraser
Freeho
retail
The Ba
18,18
Comm
Appro
and 7
from t
The A
which
confer
for 65
The p
brand
10 Ye
7-Oct
31-De
10,90
18,38
ysis: Initia
Stabi
Ten Y
ne Plaza Kob
Crowne Plaza
nomachi, Ch
city, Hyogo p
rs Centrepoin
old, subject t
portion at no
ank of New Y
89.87 square
mercial distric
oximately 50
70 kilometres
the Kobe Airp
ANA Crowne
opened in
rence and m
50 vehicles, a
property is c
.
ar Discounte
ober-2013 a
ecember-201
00,000,000 Y
81,113 Yen
l Yield (Fore
lised Year (
Year DCF
Page 10
be
a Hotel
huo ward,
prefecture, Ja
nt Limited.
to the propo
o rental.
York Mellon
e metres. (bas
ct, Category
0 kilometres
s from the N
port.
e Plaza Hote
1988. Faci
meeting facili
and 70 retail
urrently man
ed Cash flow
and 30-May-
13
Yen (Ten Billi
ecast Year 1
Forecast Ye
IRR
Termin
apan
sed master l
Trust (Japan
sed on engin
2 Residentia
s north from
New Kansai I
el Kobe com
lities include
ities, recreati
outlets.
naged and
, Direct Com
2014
on Nine Hun
NCF):
ar 7 NCF):
al Yield
ease agreem
), Ltd.
neering repor
l District
m the Tokyo
nternational
mprises a 59
e 7 restauran
ion facilities,
operated un
mparison and
ndred Million
ment and a lo
rt)
Central Bus
Airport and
93 room, hig
nts, 1 bar, 1
, undercover
nder the Inte
d Cost Approa
n Yen)
6.00%
6.80%
6.60%
6.90%
ong lease fo
siness Distric
8 kilometres
gh rise hote
1 lounge, 23
r car parking
erContinenta
ach.
r
ct
s
el
3
g
l
D-10
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Income S
Date of I
Date of V
Valuation
Value Pe
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Support:
Inspection:
Valuation:
n:
er Room:
Fraser Suite
Fraser
491A
Singa
Fraser
Propo
Fraser
25,89
and o
Com
Situate
locate
Appro
minute
apartm
km aw
The F
which
apartm
service
a gym
with th
The p
Suites
be av
assum
Capita
EBITD
Direct
We ha
place
for the
each
incom
08-Oc
31-De
S$305
S$1,1
es River Valle
r Suites River
River Valley
pore 248372
rs Centrepoin
sed 75 years
rs Centrepoin
97 square me
ffice tower).
mercial and
ed in the pri
ed within th
oximately 3.5
es away from
ment and sh
way.
Fraser Suites
opened in
ment units t
ed apartmen
mnasium and
he retail mall
property is c
brand. We
vailable at n
med that vaca
alisation of In
A, 5 Year D
Comparison
ave been ad
for this prop
e first two fin
financial ha
me support int
ctober-2013
ecember-201
5,000,000 (T
96,078
Page 11
ey Singapore
Valley Singa
Road
2 Singapore
nt Limited.
s leasehold, s
nt Limited.
etres (For wh
Residential,
me residenti
he same de
5 km from
m Changi Int
hopping belt
River Valley
1998. It co
to four-bedr
nt include a r
d basement c
l).
currently own
e have been
o cost if the
ant possessio
nitial (Foreca
Discounted C
n.
dvised that a
perty. An agg
nancial year
lf period. W
to considerat
and 20-May
13
Three Hundre
apore
e
subject to pro
ole of land lo
, under the U
al district of
evelopment
the city cent
ternational A
is within clo
y, Singapore
omprises 255
room apartm
restaurant, c
car parking f
ner occupied
instructed to
e property is
on is available
ast Year 1) EB
Cash flow, 10
an agreemen
gregate prop
s from the li
We have in o
tion.
y-2014
ed Five Millio
oposed mast
ot and includ
URA Master P
River Valley,
as Valley
tre at Raffle
Airport. The
ose proximity
e is a midsca
5 units rang
ment units.
hildren play
for 160 vehic
d and opera
assume tha
s to be sold
e for the pur
BITDA, Stabil
0 Year Disco
nt for an Inc
erty income t
sting date is
our valuation
on Dollars)
ter lease.
ding adjacen
Plan 2008.
, the Subject
Point Shop
es Place and
Orchard Ro
y, at approx
ale serviced
ing from on
Other facili
area, swimm
cles (car par
ated under t
t vacant pos
. We have
poses of this
lised (Foreca
ounted Cash
come Suppo
top-up of $1
s payable at
n assessment
t retail mall
Property is
ping Mall.
d about 36
ad serviced
imately 1.8
apartment
ne-bedroom
ities in the
ming pools,
rk is shared
the Frasers
ssession will
accordingly
valuation.
ast 5 Year)
flow and
ort is put in
.65 million
the end of
t taken this
D-11
Valuation
Support:
Adopted
n with Incom
Value Analy
me S$ 30
ysis: Initia
Stabi
Five Y
Ten Y
6,500,000 (T
l Yield (Fore
lised Year (
Year DCF
Year DCF
Page 12
Three Hundr
ecast Year 1
Forecast Ye
IRR
Termin
IRR
Termin
red Six Millio
EBITDA):
ar 5 EBITDA
al Yield
al Yield
n Five Hundr
A):
red Thousand
3.86%
3.83%
5.58%
4.00%
6.69%
4.50%
d Dollars)
D-12
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Fraser Plac
Fraser
Canar
80 Bo
Londo
Fraser
Propo
Fraser
1,894
The si
area a
Appro
Londo
miles
under
Fraser
service
faciliti
The P
under
which
2% of
(GOP)
10 Ye
14-Oc
31-De
31,5
291,
ysis: Initia
Ten Y
e Canary Wh
r Place Cana
ry Wharf
oardwalk Plac
on 414 5SF
rs Centrepoin
sed 75 years
rs Centrepoin
4 square metr
ite lies within
and is not zo
oximately 5 m
on and 3 mi
(30.5 kilom
ground lies 2
rs Place Ca
ed apartmen
es and carpa
roperty is cu
the Fraser S
commenced
f gross reven
).
ar Discounte
ctober-2013
ecember-201
500,000 (Thir
,667
l Yield (Fore
Year DCF
Page 13
harf London
ary Wharf Lon
ce
nt Limited.
s leasehold, s
nt Limited.
res.
n the boroug
ned.
miles (8.04
iles (4.8 kilo
metres) from
250m to the
nary Wharf
nts. Facilities
arking.
rrently mana
Suites brand
d in January
nue and an
ed Cash flow
and 27-May
13
rty One Millio
ecast Year 1
IRR
Termin
ndon
subject to pro
gh of Tower
kilometres) E
ometres) east
Heathrow In
West.
comprises
include 1 ca
aged by Fras
d, subject to
2010. Mana
incentive fe
and Direct C
y-2014
on Five Hund
EBITDA):
al Yield
oposed mast
Hamlets, no
East from th
t from Londo
nternational
108 studio
af, a gym, c
ers Hospitali
a 7 year ma
gement fees
e of 7% of
Comparison.
dred Thousan
ter lease.
ot within a co
he centre of
on City Airp
Airport. Can
and 1 to 2
conference a
ity UK Ltd an
anagement
s comprise a
Gross Oper
nd Pounds)
6.04%
10.00%
7.50%
onservation
the City of
ort and 19
nary Wharf
2 bedroom
nd meeting
nd operates
agreement,
base fee of
rating Profit
D-13
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Fraser Plac
Fraser
39B Q
Londo
Fraser
Propo
Fraser
1,494
Quee
Chelse
Grade
is safe
Appro
Royal
west f
Londo
The F
apartm
recent
meetin
The P
under
which
2% of
(GOP)
10 Ye
15-Oc
31-De
46,2
440,
ysis:
Initial
Ten Y
e Queens Ga
r Suites Quee
Queens Gate
on SW7 5RR
rs Centrepoin
sed 75 years
rs Centrepoin
4 square metr
ensgate Con
ea, Local D
e II listed and
eguarded in r
oximately 200
Borough of
from London
on Heathrow
raser Suites
ment operat
tly been com
ng room and
roperty is cu
the Fraser S
commenced
f gross reven
).
ar Discounte
ctober-2013
ecember-201
290,000 (Fort
,857
Yield (Foreca
Year DCF
Page 14
ate London
ens Gate Lon
nt Limited.
s leasehold, s
nt Limited.
res.
nservation Ar
Development
d under the
relation to Po
0 metres fro
Kensington a
ns West End
Airport lies 2
Queens Gat
tion within a
mpletely refur
d gym.
rrently mana
Suites brand
d in January
nue and an
ed Cash flow
and 27-May
13
rty Six Million
ast Year 1 EB
IRR
Terminal
ndon
subject to pro
rea, under t
t Framework
current Core
olicy CF8.
om Glouceste
and Chelsea.
d and 8 kilo
23 kilometres
te comprises
a Victoria te
bished. Facil
aged by Fras
d, subject to
2010. Mana
incentive fe
and Direct C
y-2014
Two Hundre
BITDA):
Yield
oposed mast
the Royal Bo
k Core Stra
e Strategy ho
er Road und
. Situated aro
metres west
s to the west.
a 105-apar
rraced prop
ities include
ers Hospitali
a 7 year ma
gement fees
e of 7% of
Comparison.
ed and Ninet
5
8
6
ter lease.
orough of Ke
ategy. The
otel use for th
erground sta
ound 5 kilom
of the City
.
rtment, upsca
perty. The pr
a breakfast
ity UK Ltd an
anagement
s comprise a
Gross Oper
ty Thousand
5.89%
8.50%
6.00%
ensington &
property is
his property
ation in the
metres south
of London.
ale serviced
roperty has
room, bar,
nd operates
agreement,
base fee of
rating Profit
Pounds)
D-14
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Fraser Suite
Fraser
1-19 A
Glasg
Lanar
Fraser
Propo
Fraser
1,369
The p
Locate
Squar
kilome
kilome
Fraser
4-star
faciliti
The P
under
which
2% of
(GOP)
10 Ye
16-Oc
30-Se
6,90
70,4
ysis: Frase
Initia
Ten Y
es Glasgow
r Suites Glasg
Albion Street
ow
kshire G1 1L
rs Centrepoin
sed 75 years
rs Centrepoin
9 square metr
remises lie w
ed in Glasgo
re and Glasg
etres) from
etres) from E
r Suites comp
property o
es, fitness su
roperty is cu
the Fraser S
commenced
f gross reven
).
ar Discounte
ctober-2013
ptember-201
00,000 (Six M
408
er Suites Gla
l Yield (Fore
Year DCF
Page 15
gow
t
LH
nt Limited.
s leasehold, s
nt Limited.
res.
within the Gla
ows merchan
gow Cathedr
Glasgow
dinburgh Air
prises 99 stud
opened in 2
uite and carpa
rrently mana
Suites brand
d in January
nue and an
ed Cash flow
13
Million Nine H
asgow
ecast Year 1
IRR
Termin
subject to pro
asgow West C
nt city centre
ral. The subj
International
rport.
dios and one
2004. Facilit
arking.
aged by Fras
d, subject to
2010. Mana
incentive fe
and Direct C
Hundred Tho
EBITDA):
al Yield
oposed mast
Conservation
within a shor
ect property
Airport an
e and two be
ies include
ers Hospitali
a 7 year ma
gement fees
e of 7% of
Comparison.
ousand Pound
ter lease.
n Area.
rt distance fro
y is just 7.3
nd 44.6 m
edroom apart
a restauran
ity UK Ltd an
anagement
s comprise a
Gross Oper
ds)
9.32%
10.50%
8.00%
om George
miles (11.8
miles (55.8
tments. The
nt, meeting
nd operates
agreement,
base fee of
rating Profit
D-15
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Fraser Suite
Fraser
12-26
Edinb
Fraser
Propo
Fairda
7,682
UNES
Locate
Airpor
The F
floors.
pre-ex
caterin
The P
under
which
2% of
(GOP)
10 Ye
04-Oc
31-De
11,5
153,
ysis: Frase
Initia
Ten Y
es Edinburgh
r Suites Edinb
6 St Giles Str
urgh EH1 1P
rs Centrepoin
sed 75 years
ance Ltd
2 square metr
CO world he
ed in Edinbu
rt and 48.4 m
Fraser Suites
. This four-sta
xisting hote
ng facilities.
roperty is cu
the Fraser S
commenced
f gross reven
).
ar Discounte
ctober-2013
ecember-201
500,000 (Elev
,333
er Suites Edi
l Yield (Fore
Year DCF
Page 16
h
burgh
reet
PT
nt Limited.
s leasehold, s
res.
eritage site a
urgh city cen
miles (77.9km
comprises
ar property o
l on site. F
rrently mana
Suites brand
d in January
nue and an
ed Cash flow
and 28-May
13
ven Million F
nburgh
ecast Year 1
IRR
Termin
subject to pro
nd in conser
ntre and 6.7
m) from Glas
75 one-bed
opened in M
Facilities inclu
aged by Fras
d, subject to
2010. Mana
incentive fe
and Direct C
y-2014
ive Hundred
EBITDA):
al Yield
oposed mast
vation area.
7 miles (10.
sgow Airport.
room service
ay 2009 alth
ude a restau
ers Hospitali
a 7 year ma
gement fees
e of 7% of
Comparison.
Thousand Po
ter lease.
8 km) from
.
ed apartmen
hough there
urant, a gym
ity UK Ltd an
anagement
s comprise a
Gross Oper
Pounds)
7.12%
10.00%
7.50%
Edinburgh
nts, over 5
had been a
m and self-
nd operates
agreement,
base fee of
rating Profit
D-16
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Park Intern
Park I
117-1
Londo
Fraser
Propo
PI Hot
1,440
Cour
Chelse
Listed,
relatio
Appro
Royal
west f
Londo
The H
Victori
prope
the su
breakf
The p
mana
agree
2014.
the ma
for the
10 Ye
15-Oc
31-De
37,7
220,
ysis:
Initial
Ten Y
ational Lond
nternational
29 Cromwe
on SW7 4DT
rs Centrepoin
sed 75 years
tel Managem
0 square metr
rtfield Conse
ea Local De
, however, u
on to Policy C
oximately 200
Borough of
from London
on Heathrow
Hotel compri
ian terraced
rties. The pro
ummer of 2
fast room, re
roperty is cu
ged by TCC
ment, which
. With regard
anagement a
e purposes o
ar Discounte
ctober-2013
ecember-201
700,000 (Thir
,468
Yield (Forec
Year DCF
Page 17
on
London
ll Road
nt Limited.
s leasehold, s
ment Limited.
res.
ervation Area
evelopment
under the cu
CFB.
0 metres fro
Kensington a
ns West End
Airport lies 2
ises a 171-b
d property. T
operty was co
2010 and fin
estaurant, ba
urrently owne
C Hotels Gro
h commence
ds to the ma
agreement a
of our valuatio
ed Cash flow
and 27-May
13
rty Seven Mil
cast Year 1
IRR
Termina
subject to pro
a, under th
Framework
rrent Core S
om Glouceste
and Chelsea.
d and 8 kilo
23 kilometres
bedroom, m
The hotel c
ompletely ref
nishing in F
ar, meeting ro
er occupied a
oup Co Ltd s
d on 1 Mar
anagement a
t any time on
on we have a
and Direct C
y-2014
lion Hundred
EBITDA):
al Yield
oposed mast
he Royal Bor
Core Strateg
Strategy hote
er Road und
. Situated aro
metres west
s to the west.
midmarket ho
omprises se
furbished ove
ebruary 201
oom and gym
and operated
subject to a
rch 2013 an
greement, th
n serving one
assumed vac
Comparison.
d Thousand P
ter lease.
rough of Ke
gy. The prop
el use is safe
erground sta
ound 5 kilom
of the City
.
otel operatio
even former
er 18 month
12. Facilities
m.
d. The hotel
one year m
nd expires 2
he Manager
e months no
cant possessio
Pounds)
5.37%
9.00%
6.50%
ensington &
perty is not
eguarded in
ation in the
metres south
of London.
on within a
residential
s starting in
s include a
is currently
anagement
8 February
can cancel
otice. Hence
on.
D-17
Valuation
Property
Prepared
Interest V
Registere
Land Are
Town Pla
Location
Brief Des
Occupan
Valuation
Date of I
Date of V
Valuation
Value Pe
Adopted
n Summary
:
d for:
Valued:
ed Owner:
ea:
anning:
:
scription:
ncy Profile:
n Approach:
Inspection:
Valuation:
n:
er Room:
Value Analy
Best Wester
Best W
108-1
Londo
Fraser
Propo
PI Hot
600 sq
Corn
Chelse
Listed,
relatio
Appro
Royal
west f
Londo
The Be
opera
forme
(provid
purcha
restau
The p
brand
to a o
and e
Weste
Mana
month
vacan
10 Ye
15-Oc
31-De
15,7
184,
ysis:
Initial
Ten Y
rn Cromwell
Western Crom
12 Cromwe
on SW7 4ES
rs Centrepoin
sed 75 years
tel Managem
quare metres
nwall Conser
ea Local De
, however, u
on to Policy C
oximately 200
Borough of
from London
on Heathrow
est Western C
tion within
r residential
ding 57 bed
ase by the
urant, bar, m
roperty is cur
. The proper
one year man
expires 28 F
ern members
ger can can
hs notice. H
t possession.
ar Discounte
ctober-2013
ecember-201
700,000 (Fifte
,706
Yield (Foreca
Year DCF
Page 18
London
mwell London
ll Road
nt Limited.
s leasehold, s
ment Limited
s.
rvation Area
evelopment
under the cu
CFB.
0 metres fro
Kensington a
ns West End
Airport lies 2
Cromwell Ho
a Victorian
properties.
rooms) and t
e current o
eeting room
rrently owner
rty is currently
nagement ag
February 201
hip brand. W
ncel the man
Hence for the
.
ed Cash flow
and 27-May
13
een Million S
ast Year 1 EB
IRR
Terminal
n
subject to pro
a, under the
Framework
rrent Core S
om Glouceste
and Chelsea.
d and 8 kilo
23 kilometres
otel comprise
terraced pr
Two of the b
the third pro
wners. Faci
and gym.
r occupied a
y managed b
greement, w
14. The hote
With regards
agement ag
e purposes o
and Direct C
y-2014
Seven Hundre
BITDA):
Yield
oposed mast
e Royal Bor
Core Strateg
Strategy hote
er Road und
. Situated aro
metres west
s to the west.
es an 85-bed
operty. The
buildings we
perty was ref
lities includ
nd operated
by TCC Hote
hich commen
el is also op
to the mana
reement at a
of our valua
Comparison.
ed Thousand
5
9
6
ter lease.
rough of Ke
gy. The prop
el use is safe
erground sta
ound 5 kilom
of the City
.
droom, midm
hotel comp
ere refurbishe
furbished in
de a breakf
under the B
els Group Co
nced on 1 M
perated und
agement agre
any time ser
ation we hav
d Pounds)
5.95%
9.00%
6.50%
nsington &
perty is not
eguarded in
ation in the
metres south
of London.
market hotel
prises three
ed in 2007
2009 upon
fast room,
est Western
o Ltd subject
March 2013
er the Best
eement, the
rving a one
ve assumed
D-18
D-19
Colliers International Consultancy & Valuation (Singapore) Pte Ltd
1 Raffles Place
#45-00, One Raffles Place
Singapore 048616
RCB No. 198105965E
MAIN +65 6223 2323
FAX +65 6222 4901
URL www.colliers.com
20 June 2014
Frasers Hospitality Asset Management Pte. Ltd.
(as manager of Frasers Hospitality Real Estate Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
The Trust Company (Asia) Limited
(as trustee of Frasers Hospitality Real Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Dear Sirs,
VALUATION OF:
(1) FRASER SUITES RIVER VALLEY SINGAPORE
(2) FRASER SUITES SYDNEY
(3) FRASER PLACE CANARY WHARF
(4) FRASER SUITES QUEENS GATE
(5) FRASER SUITES EDINBURGH
(6) FRASER SUITES GLASGOW
(7) INTERCONTINENTAL SINGAPORE
(8) NOVOTEL ROCKFORD SYDNEY
(9) PARK INTERNATIONAL LONDON
(10) BEST WESTERN THE CROMWELL HOTEL LONDON
(11) ANA CROWNE PLAZA KOBE JAPAN
(12) THE WESTIN KUALA LUMPUR
Instructions
In accordance with instructions issued by Frasers Centrepoint Limited, we together with our local offices Colliers
International, Tokyo, Colliers International Valuation UK LLP and Colliers International Valuation & Advisory
Services Pty Limited as well as C H Williams Talhar & Wong Sdn Bhd have carried out a valuation in respect of
the abovementioned properties for the purpose of proposed listing of a hospitality Real Estate Investment Trust.
Our instructions are to provide our opinion of the market value of the properties as at 31 December 2013, on as
is basis for all properties except for Novotel Rockford Sydney and Fraser Suites Sydney where the valuations are
as at 31 March 2014. Furthermore we have been instructed to also value Fraser Suites Sydney on an alternative
residential use basis.
We confirm that we have inspected the properties and have prepared full valuation reports (Reports) in
accordance with the requirements of the instructions.
D-20
2
Our valuation is on the basis of Market Value which is defined as the estimated amount for which an asset or
liability should exchange on the valuation date between a willing buyer and a willing seller in an arms-length
transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without
compulsion.
This definition of market value is in accordance with the RICS Valuation Professional Standards and the
International Valuation Standards.
Reliance on This Letter
For the purpose of the Prospectus, we have prepared this letter and the enclosed valuation certificates which
summarise our Reports and outline key factors which we have considered in arriving at our opinion of values. This
letter and the valuation certificates do not contain all the necessary data and information included in our Reports.
For further information, reference should be made to the Reports.
Due to possible changes in market forces and circumstances in relation to the properties, the Reports can only be
regarded as representing our opinion of the values of the properties as at the date of valuation, which has been
based on appropriate assumptions determined as at the date of valuation. We have assumed the properties were
in the same state on the valuation date as the inspection date.
The valuations and market information are not guarantees or predictions and must be read in consideration of the
following:
The estimated value is based upon the factual information provided by the owner/asset manager.
Property data/information provided is assumed to be correct. Whilst Colliers International has
endeavoured to ensure the accuracy of the information, it has not independently verified all information
provided by the owner/asset manager. Colliers International also accepts no responsibility for
subsequent changes in information as to areas, income, expenses or market conditions.
The methodologies adopted in valuing the properties are based upon estimates of future results and are
not predictions. Each methodology is based on a set of assumptions as to income and expenses of the
properties and future economic conditions in the local market.
Summary of Property Information
No. Property
Tenure/
Lease Term
No. of
Rooms/Units
SERVICED RESIDENCES
1 FRASER SUITES RIVER VALLEY SINGAPORE Assume 75 years 255
2 FRASER SUITES SYDNEY Assume 75 years 145 units or 201 rooms
3 FRASER PLACE CANARY WHARF Assume 75 years 96 (to increase to 107)
4 FRASER SUITES QUEENS GATE Assume 75 years 105
5 FRASER SUITES GLASGOW Assume 75 years 98
6 FRASER SUITES EDINBURGH Assume 75 years 75
D-21
3
No. Property
Tenure/
Lease Term
No. of
Rooms/Units
HOTELS
7 INTERCONTINENTAL SINGAPORE 99 years from 1990 406
8 NOVOTEL ROCKFORD SYDNEY Lease expiring in 2098 230
9 PARK INTERNATIONAL LONDON Assume 75 years 171
10 BEST WESTERN THE CROMWELL HOTEL Assume 75 years 85
11 ANA CROWNE PLAZA KOBE Freehold 593
12 THE WESTIN KUALA LUMPUR Freehold 443
Valuation Rationale
In determining the market value of the properties, we have considered relevant general and economic factors and
examined available market evidence. We have used the Income Capitalisation Method and the Discounted Cash
Flow Analysis as the primary methods. These approaches have in turn been checked by the Sales Comparison
Method.
In the Income Capitalisation Method, the estimated annual net income of the property after deducting all
necessary outgoings is capitalized at an appropriate rate of return for the balance term of the lease tenure to
arrive at the market value. The adopted rate reflects the nature, location, tenure and type of the property together
with the prevailing property market condition.
In the Discounted Cash Flow (DCF) Analysis, the projected cash flow of the properties is forecasted over a 10-
year investment horizon with an assumed sale at the end of the period. This form of analysis allows an investor to
make an assessment over the longer term return with a wide range of assumptions made including income
growth, expenditure growth, sale price of the property at the end of the investment horizon, potential capital
expenditure, and costs associated with the initial purchase of the property and also its disposal at the end of the
investment period.
The future estimates adopted for income and expenses are projections only formed on the basis of information
currently available to us and are not representations of what the value of the property will be as at a future date.
These assumptions have been based on the prevailing market conditions and prevailing expectations as to
property values, income and yield. The income and expense figures are mathematically extended with
adjustments for estimated changes and economic conditions. The results and conclusion of value are considered
the best practice estimate, and are not to be construed as a prediction or guarantee and are fully dependent upon
the accuracy of the assumptions as to income, expenses and market conditions.
In arriving at our opinion of the market value for the residential scenario for the Frasers Suites Sydney we have
used the comparable approach which compares residential values on a rate per square metre basis and then
made an adjustment for the assumed 75 year leasehold tenure. In respect to the residential we have adopted the
following definitions of market value.
Gross Realisation at the date of valuation is the sum of the Market Values of the individual lots which a property
can achieve over a specified selling period, assuming an orderly sale, between willing buyers and willing sellers,
in arms length transactions, after proper marketing, wherein the parties acted knowledgeably, prudently and
without compulsion.
D-22
4
The value 'As If Complete' assessed is the Market Value of the proposed improvements as detailed in the report
on the assumption that all construction had been satisfactorily completed in all respects at the date of valuation.
The valuation reflects the Valuer's view of the market conditions existing at the date of valuation and does not
purport to predict the market conditions and the value at the actual completion of the improvements because of
the time lag. Accordingly, the 'As If Complete' valuation should be confirmed by a further inspection by the Valuer,
initiated and instructed by the party relying upon this valuation, on completion of improvements. The right is
reserved to review, and if necessary, vary the valuation in this report if there are any changes in relation to the
project itself or in the property market conditions and prices
We have been advised that an agreement for an Income Support will be put in place for the two Singapore
properties. An aggregate property income top-up of S$1.65 million and S$8.05 million from the listing date up to
30 November 2015 will be payable at agreed intervals for Fraser Suites River Valley Singapore and
Intercontinental Singapore respectively.
Summary of Values
The following table reflects a summary of the individual values assessed for each property.
No. Property
Market Value
as at 31 December 2013
1 FRASER SUITES RIVER VALLEY SINGAPORE
SGD325,000,000
SGD327,000,000 (with Income Support)
2 FRASER SUITES SYDNEY
AUD86,700,000 (on a going concern basis)
AUD103,500,000 (Gross Realisation
Residential Use As If Complete Basis)*
As at 31 March 2014
3 FRASER PLACE CANARY WHARF GBP30,500,000
4 FRASER SUITES QUEENS GATE GBP45,000,000
5 FRASER SUITES GLASGOW GBP7,500,000
6 FRASER SUITES EDINBURGH GBP8,000,000
7 INTERCONTINENTAL SINGAPORE
SGD457,000,000
SGD465,000,000 (with Income Support)
8 NOVOTEL ROCKFORD SYDNEY
AUD68,000,000
As at 31 March 2014
9 PARK INTERNATIONAL LONDON GBP39,250,000
10 BEST WESTERN THE CROMWELL HOTEL GBP17,000,000
11 ANA CROWNE PLAZA KOBE JPY11,200,000,000
12 THE WESTIN KUALA LUMPUR RM455,000,000
* The Market Value of Fraser Suites Sydney is assumed as the Going Concern valuation subject to the current
use as a serviced apartment complex and not the Gross Realisation As If Complete Residential scenario
which would need to be further discounted to an in one line scenario.
D-23
5
Disclaimer
We have prepared this Valuation Summary Letter and the enclosed Valuation Certificates for inclusion in the
prospectus and specifically disclaim liability to any person in the event of any omission from or false or misleading
statement included in the prospectus, other than in respect of the information provided within the Reports and this
Valuation Summary Letter. This letter and the reports have been prepared for the use of the instructing parties for
the stated purpose only and cannot be relied upon by third parties.
We have not been involved in the preparation of the Prospectus nor has this letter had regard to the other material
contained in the Prospectus. The letter and its content do not take into account any matters concerning the
investment opportunity contained in the Prospectus.
The reported analysis, opinion and conclusion are limited only by the reported assumptions and limiting conditions
and is our personal, unbiased professional analyses, opinions and conclusions. The valuers compensation is not
contingent upon the reporting of a predetermined value or direction in value that favours the cause of the client,
the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.
Colliers International has relied upon the property data supplied by the owner/manager which we assume to be
true and accurate. Colliers International takes no responsibility for inaccurate data supplied by the owner/manager
and subsequent conclusions related to such data.
We confirm that we do not have a pecuniary interest that would conflict with a proper valuation of the property and
the valuers undertaking the valuation are authorised to practise as valuers and have the necessary expertise and
experience in valuing similar types of properties.
Our Valuation Certificates are appended.
Yours faithfully
Colliers International Consultancy & Valuation (Singapore) Pte Ltd
Goh Seow Leng Stella Seow
B Sc (Est Mgt), MSISV B Sc (Est Mgt), MSISV, MRICS
Appraisers Licence No. AD041-2003809B Appraisers Licence No. AD041-2004904K
Executive Director
Valuation & Advisory Services
Senior Director
Valuation & Advisory Services
Encl
D-24
VALUATION CERTIFICATE
Property Address
Valuation Prepared for
Interest Valued
Registered Owner
Legal Description
Tenure
Land Area
Gross Floor Area
Town Planning
Location
Brief Description
Basis of Valuation
491A River Valley Road
FRASER SUITES RIVER VALLEY SINGAPORE
Singapore 248372
Colliers
INTERNATIONAL
Frasers Hospitality Asset Management Pte Ltd. (as manager of Frasers
Hospitality Real Estate Investment Trust)
The Trust Company (Asia) Limited (as trustee of Frasers Hospitality Real
Estate Investment Trust) and
Frasers Hospitality Trust Management Pte. Ltd. (as trustee-manager of
Frasers Hospitality Business Trust)
Leasehold interest
River Valley Apartments Pte Ltd, River Valley Shopping Centre Pte
Ltd and River Valley Tower Pte Ltd as tenants-in common in unequal
shares with 4,641/10,000 shares, 962/10,000 shares and
4,397/10,000 shares respectively
Part of Lot 1801W Town Subdivision 24
Our instructions are to value based on a fresh 75-year lease
12,267.6 sm or thereabouts (the entire Lot 1801WT.S. 24)
Approximately 27,018 sm (as provided and subject to survey)
Zoned "Commercial & Residential" under the 2008 Master Plan
FRASER SUITES RIVER VALLEY SINGAPORE is located on the south-
eastern side of River Valley Road, some 4 km from the City Centre.
Adjoining the subject property is Valley Point which comprises a shopping
centre and an office tower.
The subject serviced apartment comprises a 20-storey block
accommodating a total of 255 apartment units (including 6 penthouses)
offering various unit types and designs. Facilities provided include a cafe,
gymnasium, swimming pool, barbeque facilities, steam & sauna room,
outdoor recreational facilities, children's playroom and lobby lounge.
(1) "As-Is" basis, assuming vacant possession is available at no cost
(2) With Income Support - We have been advised that an agreement
for an Income Support will be put in place for this property. An
aggregate income top-up of up to S$1.65 million will be payable
from the listing date up to 30 November 2015 at agreed intervals.
D-25
Valuation Approach
Key Valuation Assumptions
Date of Valuation
Valuation
Colliers
INTERNATIONAL
Income Capitalisation Method, Discounted Cashflow Analysis and Sales
Comparison Method
Capitalisation Rate
Discount Rate
Terminal Cap Rate
31 December2013
4.00%
7.00%
4.25%
(1) Market Value S$325,000,000/-
(Singapore Dollars Three Hundred And Twenty-Five Million Only)
(2) Market Value (with Income Support) S$327,000,000/-
(Singapore Dollars Three Hundred And Twenty-Seven Million Only)
This valuation certificate is subject to the attached Caveats & Assumptions.
GSUSS/k
491A River Valley Road
FRASER SUITES RIVER VALLEY SINGAPORE
Singapore 248372
Our Ref: 20131180 (A) Page2
D-26
Colliers
INTERNATIONAL
VALUATION CERTIFICATE- FRASER SUITES SYDNEY
Property
Prepared For
Interest Valued
Regist ered 0\\fler
Land Area
Legal Description
Town Planning
Location
Briel Description
Management Profile
Trading Summary
Period Ending
Occupancy
Average Dail y Rate
Rev PAR
Total Revenue
Gross Operating Profit
(Before Base Fee)
Fraser Suites Sydney, 488 Kent Street, Sydney NSW, 2000 Australia
Frasers Centrepolnt Limited In Its capacity as the proposed manager of the Hospitality Real Estate Investment Trust.
Based on assumed 75 year ground lease with nil ground rental and vacant possession available on the serviced
apartment complex.
Frasers Town Hall Residences Pty
Total stratum area Is not Identified on the Deposited Plan.
Lot 2 in Deposited Plan 1102451, tenure leasehold subject to assumed 75 year ground lease with nil ground rental
payment.
Sydney Local Environmental Plan 2012 (Zoned 98 Metropolitan Centre)
The subject property Is situated within the 'Entertainment Precinct' of the Sydney CBD, approximately 100 metres
south of the Sydney Town Hall and Town Hall Railway Station. The property more particularly contains an eastern
frontage to Kent Street, between Its intersections with Bathurst and Uverpool Streets.
Fraser Suites Sydney comprises of a thirty three (33) storey tower with 145 serviced apartments (or 201 Rooms) and
a two (2) storey lobby of a 5 Star AAA Standard located on Kent Street within the Sydney CBD. The property was
completed in late 2006. There are eight (8) levels of basement parking with part of three (3) allocated to the subject
property with the remainder being allocated to the adjoining Regent Place development and Lumiere Residences. The
property also Includes a pool, gymnasium, breakfast area and conference/business facilities. We note that the subject
property has Development Approval (D/2009/1412) forthe strata subdivision and conversion of the subject property to
residential apartments. We highlight however that this approval (0/2009/1412) expires 25 June 2015.
The property is currently managed by Frasers and operates under the Fraser brand, however we have been
specifically Instructed to value the serviced apanment complex on the assumption of typical Industry management
fees and on the assumption that vacant possession is available,
Actual Budget Forecast Forecast Forecast
12 mths to Sap 13 12 mths to Sep 14 Y/E Mar15 Y/E Mar 16 VIE Mar 17
88.9% 87.8% 90.1% 89.1% 88.5%
226.05 236.63 240.51 250.13 259.49
200.96 207.76 216.58 222.86 229.60
16,495,366 17,138,521 17,826,618 18,369,513 18,852,431
8,483,852 8,674,944 9,102,420 9,393,721 9,642,873
Valuation Approach Capitalisation of Stabilised Income and 5 Year Discounted Cash Flow Analysis
Date of Valuation 31 March 2014
Valuation $AUD 86,700,000 GST Exclusive
(EIGHTY SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS)
Initial Yield (after capital 7.52%
expendit ure)
Stabilised Yield 7.25%
Price per Room $431,343
5 Year DCF -IRA 10.00%
Terminal Yield 7.50%
Gross Reall$ilion 'As If Compl ete' of Fraser Suites Sydney assuming that the apartments have
been strata subdivided and convet1cd to 145 conventional residential apartments plus a
comrnorclal component nssumlno on Individual strata sale b This assumes a 75 year
lonsohold Into rest with Nil rom over tho torm altho lonso GST nnsls.
For clarity this value does not represent the 'As Is' current market value of the subject property.
$AUD 103,500,000 GST Exclusive
(ONE HUNDRED AND THREE MILLION FIVE
HUNDRED THOUSAND DOLLARS)
D-27
Colliers
I t.JT E R N AT I 0 N A L
Valuation Certificate - Fraser Place, Canary Wharf
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Fraser Place
80 Boardwalk Place
Canary Wharf
London
E14 5SF
Frasers Hospitality Asset Management Pte. Ltd.
(as manager of Frasers Hospitality Real Estate
Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality Business
Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Leasehold going concern with vacant possession
Fairhold NW Limited
Leasehold - 75 years lease at a peppercorn rent
Tower Hamlets Local Plan: No allocation
The Trust Company (Asia) Limited
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
Canary Wharf lies three miles to the east of the City of London. Predominantly residential
docklands location, adjacent to houseboat marina and main road leading into Canary Wharf
development.
Two interconnecting apartment buildings adapted and operated as serviced apartments.
Undergoing refurbishment to increase number of rooms from 96 to 107. Surface level and
underground car parking.
The property is managed by Frasers but we have disregarded this arrangement and valued
upon a vacant possession basis.
COLLIERS INTERNATIONAL
D-28
r
r Colliers
INTERNATIONAL
Trading Summary:
2016
% % %
%
%
Turnover
4,187,993 100 3,950,280 100 4,665,239 100 4,782,265 100 4,933,456 100
net of VAT
Trading
2,759,423 65.9 2,481,706 62.8 3,075,484 65.9 3,144,530 65.8 3,234,600 65.6
profit
Adjusted
2,098,818 50.1 1,829,527 46.3 2,355,457 50.5 2,404,987 50.3 2,473,015 50.1
net profit
Valuation Approach: Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
Date of Valuation: 31 December 2013
Valuation: 30,500,000 (thirty million five hundred thousand pounds)
COLLIERS INTERNATIONAL
D-29
Colliers
ltH FRNATIONAl
Valuation Certificate - Fraser Suites, Queens Gate Gardens
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Fraser Suites
39B Queens Gate Gardens
London
SW7 5RR
Frasers Hospitality Asset Management Pte. Ltd. The Trust Company (Asia) Limited
(as manager of Frasers Hospitality Real Estate
Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality
Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
75 year leasehold going concern assuming vacant possession
Queens Gate Gardens (CI) Limited
Leasehold - 75 years lease at a peppercorn rent
Royal Borough of Kensington and Chelsea Unitary Development Plan
No land use allocation and falls within a conservation area
Kensington area of London, two miles south west of London West End. Mixed commercial
and residential area close to museums and Royal Albert Hall.
Serviced apartment hotel with 105 self-contained suites together with bar, breakfast room,
gym and meeting/conference room. Major refurbishment just completed.
The property is currently managed by Frasers but this has been ignored for the purposes of
our valuation which has been prepared on a vacant possession basis.
COLLIERS INTERNATIONAL
D-30
Colliers
INT E RNAT O ~ J L
Trading Summary:
2013 2017
% % % % %
Turnover
net of 4,211,177 100 5,332,892 100 5,607,618 100 5,748,799 100 5,921,263 100
VAT
Trading
2,835,293 67.3 3,623,408 67.9 3,845,367 68.6 3,916,825 68.1 4,003,321 67.6
profit
Adjusted
2,249,648 53.4 2,922,892 54.8 3,113,613 55.5 3,166,732 55.1 3,232,896 54.6
net profit
Valuation Approach: Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
Date of Valuation: 31 December 2013
Valuation: 45,000,000 (forty five million pounds)
COLLIERS INTERNATIONAL
D-31
Colliers
INT FRNATIONAL
Valuation Certificate- Fraser Suites, Glasgow
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Fraser Suites
1-19 Albion Street
Glasgow
G11LH
Frasers Hospitality Asset Management Pte. Ltd. The Trust Company (Asia) Limited
(as manager of Frasers Hospitality Real Estate
Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality
Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
Leasehold going concern, assuming vacant possession.
Pressdale Limited
Leasehold- 75 years lease at a peppercorn rent
The Glasgow City Plan 2 adopted in December 2009.
Zoned as follows:
Development Policy Principle DEV8 Mixed Development
Conservation Area: Central
Shopping Centre: Tier 1 City Centre
Located on the southern edge of Glasgow's "Merchant City" on the east side of the City
Centre.
Serviced apartment building partly reconstructed behind period fa9ade of loadbearing stone
walls. 98 units together with a fitness suite and conference room.
The property is currently managed by Frasers but we have disregarded this and assumed
vacant possession.
COLLIERS INTERNATIONAL
D-32
Trading Summary:
Year End Sept
Turnover net of VAT
Trading profit
Adjusted net profit
Valuation Approach:
Date of Valuation:
Valuation:
Colliers
IN 1 F.J< N A Tl 0 'J A '-
'
2013 2014 Forecast 2015 Forecast
1,759,662
589,132
430,373
%
100 2,284166
34.4 849,681
24.5 849,681
%
100 2,227,324
46.7 979,384
37.2 766,229
%
100
44.0
34.4
Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
31 December 2013
7,500,000 (seven million five hundred thousand pounds)
COLLIERS INTERNATIONAL
D-33
Colliers
INTFRN A TI (l NAL
Valuation Certificate Fraser Suites, Edinburgh
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Trading Summary:
Fraser Suites
12-26 St Giles Street
Edinburgh
EH11 PT
Frasers Hospitality Asset Management Ple. Ltd.
(as manager of Frasers Hospitality Real Estate
Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality
Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Leasehold going concern with vacant possession
FRA (Jersey) Limited
Leasehold - 75 years lease at a peppercorn rent
Edinburgh City Council.
The Trust Company (Asia) Limited
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
The property is Category B Listed and lies within the Old Town Conservation Area.
Located in the centre of the city on the northern side of High Street in the Old Town
Conservation Area and the World Heritage site. The High Street/Royal Mile is a major tourist
thoroughfare leading to Edinburgh Castle.
A series of interconnected mid and end of terrace Scots Baronial Tenements formed in 1869.
Provides 75 serviced apartments including studios, one bed apartments and suites.
The property is managed by Frasers but we have disregarded this arrangement and valued
upon a vacant possession basis.
2013
Year End September 2013
2014 I 2015
Forecast
2015 ,' 2016
Forecast
% % %
Turnover net of VAT 2,547,234 100 2,687,289 100 2,710,311 100
Trading profit 1,018,350 40 1,116,924 41.6 1,104,737 39
Adjusted net profit 779,095 31 823,061 31 809,810 30
COLLIERS INTERNATIONAL
D-34
Colliers
INTERNATIONAl.
Valuation Approach: Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
Date of Valuation: 31 December 2013
Valuation: 8,000,000 (eight million pounds)
COLLIERS INTERNATIONAL
D-35
VALUATION CERTIFICATE
Property Address
Valuation Prepared for
Interest Valued
Registered Owner
Legal Description
Tenure
Land Area
Strata Floor Area
Town Planning
Location
Brief Description
80 Middle Road
INTERCONTINENTAL SINGAPORE
Singapore 188966
Colliers
INTERNATIONAL
Frasers Hospitality Asset Management Pte Ltd. (as manager of Frasers
Hospitality Real Estate Investment Trust)
The Trust Company (Asia) Limited (as trustee of Frasers Hospitality
Real Estate Investment Trust) and
Frasers Hospitality Trust Management Pte. Ltd. (as trustee-manager of
Frasers Hospitality Business Trust)
Leasehold interest
BCH Hotel Investment Pte Ltd
Strata Lot U1430P, Town Subdivision 13
99-year leasehold commencing from 1 0 September 1990
25,703.7 sm (Land Lot 1015C Town sub-division 13 including 200 & 230
Victoria Street)
45,992 sm or thereabouts
Zoned "Commercial" under the 2008 Master Plan
INTERCONTINENTAL SINGAPORE is located at the junction of Victoria
Street and Middle Road. Approximately 2 km from the City Centre,
vehicular access is via Middle Road. There is a direct link to the Bugis
MRT Station at Basement 1 of the adjoining Bugis Junction.
INTERCONTINENTAL SINGAPORE is part of an integrated
development known as BUGIS JUNCTION. The development
comprises a hotel, retail and office component known as
"INTERCONTINENTAL SINGAPORE", "Parco Bugis Junction" and
"Bugis Junction Towers" respectively.
The subject property is an up-scale 406-room hotel comprising a 16-
storey block and a row of part 2-/part 3-storey conserved shophouses.
The development reflects the rich Peranakan heritage of Singapore.
Hotel facilities include a swimming pool with spa and Jacuzzi, a 24-hour
fitness centre and a spa, Club Lounge, restaurants/ deli/ bar, banquet
and meeting facilities and a business centre.
D-36
Basis of Valuation
Valuation Approach
Key Valuation Assumptions
Date of Valuation
Valuation
Colliers
I NT ERNATI ONAL
(1) "As-Is" basis, assuming vacant possession is available at no cost
(2) With Income Support- We have been advised that an agreement
for an Income Support will be put in place for this property. An
aggregate income top-up of up to S$8.05 million will be payable
from the listing date up to 30 November 2015 at agreed intervals.
Income Capitalisation Method, Discounted Cashflow Analysis and Sales
Comparison Method
Capitalisation Rate
Discount Rate
Terminal Cap Rate
31 December 2013
4.75%
7.00%
5.00%
{1) Market Value S$457,000,000/-
(Singapore Dollars Four Hundred And Fifty-Seven Million Only)
(2) Market Value (with Income Support) S$465,000,000/-
(Singapore Dollars Four Hundred And Sixty-Five Million Only)
This valuation certificate is subject to the attached Caveats & Assumptions.
SSIGSUtc
80 Middle Road
INTERCONTINENTAL SINGAPORE
Singapore 188966
Our Ref:20131180 (B) Page2
D-37
Colliers
INTERNAliONAL
VALUATION CERTIFICATE- NOVOTEL ROCKFORD
Property
Interest Valued
Registered 0\flfl er
Lessee
Land Area
Legal Description
Town Planni ng
Location
Bri ef Description
Capital Expenditure
Management Profile
Trading Summary
Period Ending
Occupancy
Average Dai ly Rate
Rev PAR
Total Revenue
Gross Operating Profit
Valuation Approach
Date of Valuation
Valuation
Passing Yield
Novate\ Rockford, 17 Little Pier Street, Darling Harbour, NSW, 2000, Australia
Leasehold going concern, subject to the existing management agreement and franchise agreement and inclusive of
all plant, equipment , furniture and fittings (excluding stock).
Sydney Harbour Foreshore Authority
Tank Stream (Darling Harbour) Ply Limited (now Golden Shower Development)
2,332m
2
Leasehold interest in Lot 301 in Deposited Plan 1021761 expiring 17
111
October 2098.
Not to be used for less than a 3.5 star international tourist hotel and ancillary purposes.
Darling Harbour Is situated In the south western sector of the Sydney Central Business District and Is a tourist and
entertainment area close to the Chinatown precinct of Haymarket, It Is directly opposite the Sydney Entertainment
Centre with good access to the proposed Convention and Exhibition Centre, lmax Cinema complex and Chinese
Gardens.
Novotel Rockford comprises a 230 guest room hotel with conference rooms together with the Heritage listed
Pumphouse Restaurant and Bar. The hotel is of an approximate 4 star standard.
We have assumed a capital expenditure allowance for a refurbishment of the property of $6 million.
The property Is currenl\y managed by Rockford Hotels and subject to a franchise agreement wth Accor. We are
advised that the management fees are a base fee of 1% of gross revenue and an Incentive lee of 5% of gross
operating profit with the franchise fee calculated at 2% of gross room revenue.
Actual Actual Actual Actual Forecast Forecast Forecast
Dec 10 Dec 11 Dec 12 YIE Dec 13 YIE Mar 15 YIE Mar16 Y/E Mar17
85.9% 86.9% 89% 90% 89.2% 88.2% 87.6%
146.42 156.16 156.33 166.00 168.89 175.64 182.79
125.76 135.67 139.13 149.40 150.60 154.96 160.16
14,862,813 15,622,123 16,112,049 17,390,116 16,808,505 17,291,150 17,762,459
6,568,980 7,317,536 7,498,345 8,350,701 7,831 ,229 8,078,241 8,321,134
Capitalisation of Passing and First Years Projected Income and 5 Year Discounted Cash Flow Approach
31 March 2014
$AUD66,000,000 GST Exclusive
(SIXTY EIGHT MILLION DOLLARS)
7.62%
Initial Yield before cap. ex. 7.27%
Initial Yield after cap. ex. 7.86%
Price per Room $295,652
5 Year DCF -IRA 10.00%
Terminal Yield 7.50%
D-38
Colliers
INTERNAT I ONAL
Valuation Certificate- Park International Hotel
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Trading Summary:
Year end 31 December
Total netturnover
Park International Hotel
117-129 Cromwell Road
London
SW7 4DT
Frasers Hospitality Asset Management Pte. Ltd. The Trust Company (Asia) Limited
(as manager of Frasers Hospitality Real Estate
Investment Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality
Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
8 Marina Boulevard
#05-02 Marina Bay Financial Centre
Singapore 018981
75 year leasehold going concern assuming vacant possession
Global- Link Investments Limited
Leasehold - 75 year lease at a peppercorn rent
Royal Borough of Kensington and Chelsea Unitary Development Plan
Kensington area of London, two miles south west of London West End. Mixed commercial
and residential area close to museums and Royal Albert Hall.
Unbranded hotel with 171 en suite letting bedrooms together with reception, lounge/bar and
restaurant, large breakfast room, fitness suite and meeting/board room.
The property is currently managed by TCC Hotels Group Limited by way of a management
agreement but this has been ignored for the purposes of our valuation which has been
prepared on a vacant possession basis.
5,123,795 100.0 5,686,108
Gross Operating Profit
Adjusted Net Profit/EBITDA
5,039,690
2,589,608
2,352,756
100.0
51.4
46.7
2,658,600 51.9 3,125,036
2,444,520 47.7 2,815,186
100.0
55.0
49.5
COLLIERS INTERNATIONAL
D-39
Colliers
I rn F (( N ;., TIONA I.
I
Valuation Approach: Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
Date of Valuation: 31 December 2013
Valuation: 39,250,000 (thirty nine million two hundred and fifty thousand pounds)
COLLIERS INTERNATIONAL
D-40
Colliers
INTERNATIONAL
Valuation Certificate -The Best Western The Cromwell Hotel
Property:
Prepared for:
Interest valued:
Registered owner:
Tenure
Town Planning:
Location:
Brief Description:
Occupancy profile:
Trading Summary:
Total net turnover
Gross Operating Profit
The Best Western The Cromwell Hotel
108-112 Cromwell Road
London
SW7 4ES
Frasers Hospitality Asset Management Pte. Ltd. The Trust Company (Asia) Limited
(as manager of Frasers Hospitality Real Estate
Investment Trust)
(as trustee of Frasers Hospitality Real
Estate Investment Trust)
438 Alexandra Road 8 Marina Boulevard
#21-00 Alexandra Point
Singapore 119958
#05-02 Marina Bay Financial Centre
Singapore 018981
Frasers Hospitality Trust Management Pte. Ltd.
(as trustee-manager of Frasers Hospitality
Business Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
75 year leasehold going concern assuming vacant possession
Global - Link Investments Limited
Leasehold- 75 years lease at a peppercorn rent
Royal Borough of Kensington and Chelsea Unitary Development Plan
Kensington area of London, two miles south west of London West End. Mixed commercial
and residential area close to museums and Royal Albert Hall.
Best Western branded hotel with 85 en suite letting bedrooms together with reception, small
lounge/bar, breakfast room, fitness suite and meeting room.
The property is currently managed by TCC Hotels Group Limited by way of a management
agreement but this has been ignored for the purposes of our valuation which has been
prepared on a vacant possession basis.
2,317,054
1,196,122
(9 months
actuals & 3
months forecast)
2013
100.0 2,327,741
51.6 1,222,638
%
100.0 2,434, 796
52.5 1,326,846
100.0
54.5
Adjusted Net Profit/EBITDA 1,083,340 46.8 1,117,201 48.0 1 '173,275 48.2
COLLIERS INTERNATIONAL
D-41
Colliers
INl ERNATIONAL
Valuation Approach: Primarily capitalisation of sustainable EBITDA and secondary Discounted Cash Flow
Date of Valuation: 31 December 2013
Valuation: 17,000,000 (seventeen million pounds)
COLLIERS INTERNATIONAL
D-42
VALUATION CERTIFICATE
Property Address
Valuation Prepared for
Interest Valued
Registered Owner
Land Area
Gross Floor Area
Town Planning
Location
Brief Description
Basis of Valuation
Valuation Approach
Key Valuation Assumptions
Date of Valuation
Valuation
ANA Crowne Plaza Kobe,
1-1, Kitanocho, Chuo-ku, Kobe City,
Hyogo Prefecture, Japan
Frasers Hospitality Asset Management Pte. Ltd.
The Trust Company (Asia) Limited
Frasers Hospitality Trust Management Pte. Ltd.
Freehold interest
The Bank of New York Mellon Trust (Japan), Ltd. (Trustee)
18,239.37 sq m (registered)
Total Gross Floor Area is 136,656.47 sq m
Commercial Lot, permissible floor area ratio:800%,
Colliers
INTERNAT I ONAL
Located close to the centre of Kobe City, the Property is 40m south from JR
Sanyo Shinkansen Line Shin-Kobe Station.
The Property is a high-rise luxury hotel and mixed use building. It comprises
593 guest rooms, 650 car parking lots, retail and entertainment centre,
supporting amenities, restaurants, bars, banquet rooms, a spa, a fitness
centre, in-door swimming pool and sauna facilities.
As-Is Basis with vacant possession
Discounted Cash Flow Analysis, Direct Capitalisation Analysis and Sales
Comparison Approach
Capitalisation Rate
Discount Rate
Terminal Cap Rate
31 December 2013
JPY 11 ,200,000,000
7.0%
7.0%
7.3%
(JAPANESE YEN ELEVEN BILLION AND TWO HUNDRED MILLION
ONLY)
D-43
Colliers
INTERNATIONAL
1AriJ1IW
CERTIFICATE OF VALUATION
THE WESTIN KUALA LUMPUR
LOT NO. 1368, SECTION 67
TOWN OF KUALA LUMPUR
DISTRICT OF KUALA LUMPUR
iNTERNATI ONAL
C H Williams Talhar & Wong Sdn Bhd (181 49-U)
FEDERAL TERRITORY OF KUALA LUMPUR. MALAYSIA
VALUATION SUMMARY
Property
Address
Tenure
Legal Description
Interest Valued
Registered Owner
Location
Property Description
Repair & Condition
Land Area
Zoning
Trading Summary
Period Ending Actual
2010
Occupancy (%) 73.4
Average Daily 430
Rate (RM)
Methodology
Market Value
Date of Valuation
The Westin Kuala Lumpur
No_ 199, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia
Term in Perpetuity (Freehold)
Lot 1368, Section 67, Town of Kuala Lumpur, District of Kuala Lumpur, Federal
Territory of Kuala Lumpur, Malaysia
Unencumbered freehold going concern, subject to the existing management
arrangements, inclusive of all plant, equipment, furniture and fittings (excluding stock)
JBB Hotels Sdn Bhd
The subject property is located within Bintang Walk (A popular shopping district),
Jalan Bukit Bintang, Kuala Lumpur
The Westin Kuala Lumpur comprises a 443 room, 5 star high rise hotel. Facilities
include restaurant, bar, conference and meeting facilities, recreation facilities and
basement car parks
The property is in a good state of repair and maintenance
4,051 square metres (43,605 square feet)
Commercial
Actual Actual Budget Forecast Forecast Forecast
2011 2012 2013 2014 2015 2016
73.4 75.6 77.5 78.5 78.5 78.5
449 473 484 494 509 519
We have adopted the Profit Method of Valuation as our main method for this
valuation exercise. As a check, we have adopted the Comparison Method of
Valuation
RM455,000,000/-
(Ringgit Malaysia: Four Hundred and Fifty Five Million Only)
31 December 2013
D-44
CAVEATS AND ASSUMPTIONS
1. DEFINITIONS
In these Caveats and Assumptions the following words or phrases shall have the meaning or meanings set out below:
'Confidential Information' means information that:
(a) Is by its nature confidential.
(b) Is designed by Us as confidential.
(c) You know or ought to know is confidential.
Colliers
INTERNATIONAL
(d) Includes, without limitation: information comprised in or relating to any of Our intellectual property in the Services or any
reports or certificates provided as part of the Services.
'Currency Date' means, in relation to any valuation report, the date as at which our professional opinion is stated to be current.
'Fee' means the amount agreed to be paid for the Services as set out in the Quotation.
'Parties' means You or Us as the context dictates.
'Quotation' means the written quote provided by Us in relation to the Services.
'Services' means the valuation services provided pursuant to these Terms and Conditions and the Quotation, and includes any
documents, reports or certificates provided by Us in connection with the Services.
'The Property' means the assets which are subject of our appointment as your advisor.
'We', 'Us', 'Our', 'Colliers' means Colliers International Consultancy & Valuation (Singapore) Pte Ltd, Colliers International,
Tokyo, Colliers International Valuation UK LLP and Colliers International Valuation & Advisory Services Ply Limited as well as C
H Williams Talhar & Wong Sdn Bhd where appropriate.
'You', 'Your', 'Client' means the person, company, firm or other legal entity by or on whose behalf instructions are given, and
any person, firm, company or legal entity who actually gave the instructions to us even though such instructions were given as
agent for another.
'Professional Property Practice Standards' refers to RIGS Valuation- Professional Standards or Australian Property Institute
Professional Practice Standard or other appropriate standards.
2. PERFORMANCE OF SERVICES
2.1 We have provided the Services in accordance with:
(a) The Terms and Conditions contained herein; or
(b) As specifically instructed by You for the purpose of the Services; and
(c) Within the current provisions set by the prevailing Professional Property Practice Standards.
3. CONDITION OF THE PROPERTY
3.1 No allowance has been made in our report for any charges, mortgages or amounts owing on the Property
valued nor for any expenses or taxation which may be incurred in effecting a sale. We have assumed that the
Property is free from and clear of any and all charges, liens and encumbrances of an onerous nature likely to
affect value, whether existing or otherwise, unless otherwise stated. We assume no responsibility for matters
legal in nature nor do we render any opinion as to the title which is assumed to be good and marketable. We are
not aware of any easements or rights of way affecting the property and our valuation assumes that none exists.
3.2 We have assumed that the Property has been constructed, occupied and used in full compliance with, and
without contravention of, all ordinances, except only where otherwise stated. We have further assumed that, for
any use of the Property upon which this report is based, any and all required licences, permits, certificates, and
authorisations have been obtained, except only where otherwise stated.
3.3 We have assumed that any development sites are in a condition suitable for development; this has not been
checked by us.
3.4 We have not carried out detailed site measurements to verify the correctness of the site areas in respect of the
properties but have assumed that the site areas shown on the documents and official site plans handed to us
are correct. All documents and contracts have been used as reference only and all dimensions, measurements
and areas are approximations. No on-site measurement has been taken.
3.5 We have assumed that there is no timber infestation, asbestos or any other defect (unless advised otherwise)
and that the property is compliant with all relevant environmental laws. It is Your responsibility to provide reports
to Us that are relevant to these issues.
3.6 While due care is exercised in the course of our inspection to note any serious defects, no structural survey of
the Property will or has been undertaken, and We will not (and are not qualified to) carry out a structural,
geotechnical or environmental survey. We will not inspect those parts of the property that are unexposed or
inaccessible.
3.7 None of the services have been tested by Us and we are unable therefore to report on their present condition,
but will presume them to be in good working order.
3.8 We have not undertaken a detailed inspection of any plant and equipment or obtained advice on its condition or
suitability.
3.9 We recommend that You engage appropriately qualified persons to undertake investigations excluded from our
Services.
3.10 No responsibility will be accepted either to You or to any third party for loss or damage that may result directly or
indirectly from the condition of the property.
D-45
Colliers
INTERN ATI ONAL
4. ENVIRONMENT AND PLANNING
4.1 We have obtained only verbal town planning information. It is your responsibility to check the accuracy of this
infonmation by obtaining a certificate under the appropriate legislation.
4.2 We do not hold ourselves to be experts in environmental contamination. Unless otherwise stated, our inspection
of the site did not reveal any contamination or pollution affectation, and our valuation has been prepared on the
assumption that that the land is not contaminated and has not been affected by pollutants of any kind. We would
recommend that that this matter be checked by a suitably qualified environmental consultant. Should
subsequent investigation show that the site is contaminated, our valuation may require revision.
5. BUILDING AREAS AND LETIABLE AREAS
5.1 Where a survey is provided to Us for consideration, We will assume that infonmation contained in the survey is
accurate and has been prepared in accordance with the prevailing Professional Property Practice Standards.
5.2 If you do not provide Us with a survey, We will estimate building and/or lettable areas based only upon available
secondary infonmation (including but not limited to building plans, deposited plans, and our own measurements).
Such estimates do not provide the same degree of accuracy or certainty as would be provided by a survey
prepared by an appropriately qualified professional in accordance with the prevailing Professional Property
Practice Standards.
5.3 Where such a survey is subsequently produced which differs from the areas estimated then You will refer the
valuation back to Us for comment or, where appropriate, amendment.
6. OTHER ASSUMPTIONS
6.1 Unless otherwise notified by You, We will assume:
(a) There are no easements, mortgages, leases, encumbrances, covenants, caveats, rights of way or
encroachments except those shown on the Title.
(b) All licences and penmits can be renewed and We have not made any enquires in this regard.
6.2 Where third party expert or specialist information or reports are provided to Us or obtained by Us in connection
with Services (including but not limited to surveys, quantity surveyors reports, environmental audits, structural/
dilapidation reports), we will rely upon the apparent expertise of such experts/ specialists. We will not verify the
accuracy of this infonmation or reports, and assume no responsibility for their accuracy.
6.3 Our services are provided on the basis that the dient has provided us with a full and frank disclosure of all
infonmation and other facts which may affect the service, including all secrecy clauses and side agreements. We
accept no responsibility or liability whatsoever for the valuation unless such a full disclosure has been made.
6.4 Any plans, sketches or maps included in this report are for identification purposes only and should not be treated
as certified copies of areas or other particulars contained therein.
6.5 The study of possible alternative development options and the related economics are not within the scope of this
report.
6.6 Our opinion about the Market Value of the property is free from any influence and/ or point of views of any other
parties.
7. VALUATION FOR FIRST MORTGAGE SECURITY
7.1 Where the Services are provided for mortgage purposes, You agree that You will not use the valuation report
where the property:
(a) Is used as security other than by first registered mortgage;
(b) Is used as part of a group of securities (except where the property forms part of a trust); or
(c) Is used as security for more than one loan.
7.2 We reserve the right, at Our absolute discretion, to detenmine whether or not to assign Our valuation to any third
party. Without limiting the extent of Our discretion, We may decline a request for assignment where:
(a) The proposed assignee is not a major recognised lending institution (such as a major bank);
(b) The assignment is sought in excess of 3 months after the date of valuation;
(c) We consider that there has been a change in conditions which may have a material impact on the value
of the property.
(d) The proposed assignee seeks to use the valuation for an inappropriate purpose (including in a manner
inconsistent with Your agreement at Clause 7.1); or
(e) Our fee has not been paid in full.
7.3 Where we decline to provide an assignment on either of the basis at 7.2(b) or (c), we may be prepared to
provide an updated valuation on terms to be agreed at that time.
7.4 In the event that You request Us to assign Our valuation and We agree to do so, You authorize Us to provide to
the assignee a copy of these Terms and Conditions, the Quotation and any other document, including instruc-
tions provided by You, relevant to the scope of Our Services.
D-46
Colliers
INTERNATIONAL
8. ESTIMATED SELLING PRICE
8.1 Where you instruct Us to provide an Estimated Selling Price, You agree that the Services:
(a) Are limited to the provision of an opinion based on Our knowledge of the market and informal enquiries.
(b) We are not required to carry out a full inspection of the property; any inspection of comparable
properties; a search of Title(s) or other enquiries as to encumbrances, restrictions or impediments on
Title(s); or other investigations which would be required for a formal valuation.
(c) Provide an indicative figure only which is not suitable for use for any purpose other than as general
information or guide as to sale expectations. It is not suitable to be relied upon for the purpose of entry
into any transaction.
8.2 No responsibility will be accepted either to You or to any third party for loss or damage that may result from the
issue of such an Estimated Selling Price.
9. CURRENCY OF VALUATION
9.1 Due to possible changes in market forces and circumstances in relation to the property the Services can only be
regarded as relevant as at the Currency Date.
9.2 Where You rely upon Our valuation report after the Currency Date, You accept the risks associated with market
movements between the Currency Date and the date of such reliance.
9.3 Without limiting the generality of 9.2, You should not rely upon Our valuation:
(a) After the expiry of 3 months from the Currency Date;
(b) Where circumstances have occurred during that period which may have a material effect on the value of
the property or the assumptions or methodology used in the valuation report .
10. MARKET PROJECTIONS
10.1 Any market projections incorporated within our Services including, but not limited to, income, expenditure,
associated growth rates, interest rates, incentives, yields and costs are projections only and may prove to be
inaccurate. Accordingly, such market projections should be interpreted as an indicative assessment of
potentialities only, as opposed to certainties.
10.2 Where Our Services include market projections such projections require the dependence upon a host of
variables that are highly sensitive to varying conditions. Accordingly, variation in any of these conditions may
significantly affect these market projections.
10.3 Where market projections form part of Our Services, We draw your attention to the fact that there will be a
number of variables within acceptable market parameters that could be pertinent to Our Services and the
projections adopted are representative of only one of these acceptable parameters.
11. YOUR OBLIGATIONS
11.1 You warrant that the instructions and subsequent information supplied by You contain a full and frank disclosure
of all information that is relevant to Our provision of the Services.
11 .2 You warrant that all third party expert or specialist reports provided to Us by You for the purpose of Us providing
the Services are provided with the authority of the authors of those reports.
11.3 You authorise and license Us to incorporate Your intellectual property within Our report(s).
11.4 You will not release any part of Our valuation report or its substance to any third party without Our written
consent. Such consent will be provided at Our absolute discretion and on such conditions as We may require
including that a copy of these Terms and Conditions be provided to such third party. This clause shall not apply
to persons noted as recipients in Your prior instruction to Us or in the Quotation provided that You shall provide
any such recipient with a copy of these Terms and Conditions.
11.5 We reserve the right to reconsider or amend the valuation advice, or the Fee set out in Our Quotation to You, if;
(a) Certificates, surveys, leases, side agreements or related documentation that were not provided to Us
prior to the provision of the Services are subsequently provided, and contain matters that may affect the
value of the advice; or
(b) Where subsequent site inspections made in relation to any of the matters raised in Clause 3 materially
affect or may alter the value of the property, the subject of the Services.
11 .6 If You release any part of the valuation advice or its substance without written consent, You agree:
a) to inform the other person of the terms of our consent; and
b) to compensate Us if You do not do so. We have no responsibility to any other person even if that person
suffers damage as a result of any other person receiving this valuation.
12. CONFIDENTIALITY
12.1 This report and each part of it is prepared and intended for the exclusive use of the Client for the sole purpose
outlined in Our agreement for internal reference purposes, and in accepting this report, the Client expressly
agrees not to use or rely upon this report or any part of it for any other purpose. No person other than the Client
shall use or rely upon this report or any part of it for any purpose unless we have given Our express written
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which it may appear.
12.2 If consent to disclose the Confidential Information is provided by Us, You agree to abide by any additional terms
and conditions that We may apply to that disclosure.
D-47
I
Colliers
INTERNATIONAL
12.3 You agree that You will indemnify, hold harmless and defend Us from and against any and all loss, liability,
costs or expenses (including but not limited to professional or executive time) We may suffer or reasonably
incur, directly or indirectly, as a result of a breach of this clause.
12.4 Unless otherwise directed in writing by Client, Colliers International retains the right to include references to the
Services in its promotional material. Such references shall not contain confidential material.
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13.1 We may obtain personal information about You in the course of performing Our Services. We respect your
privacy and advise You that we will only obtain information that is necessary to assist us in the course of
performing Our Services. If it is necessary for Us to engage third parties, we will inform these parties that they
are not to disclose any personal information about You to any person or organisation other than Us.
14. SUBCONTRACTING
14.1 We may sub-contract or otherwise arrange for another person to perform any part of the Services or to
discharge any of Our obligations under any part of these Terms and Conditions, with Your consent.
15. LIMITATION OF COLLIERS LIABILITY
15.1 To the extent permissible under applicable laws, in no event shall Colliers International be liable to Client or
anyone claiming by, through or under Client, including insurers, for any lost, delayed, or diminished profits,
revenues, production, business, use or opportunities, or any incidental, special, indirect, or economic losses,
wasted costs, diminution of value or consequential damages, of any kind or nature whatsoever, however
caused.
15.2 All the costs and benefits forecasted will, ultimately, be determined by future market conditions. Forecasts of
these elements are based on assumptions of certain variable factors, which, in turn, are extremely sensitive to
changes in the market and economic contexts. For this reason, the figures mentioned in this report were not
computed under any known or guaranteed conditions. Rather, these are forecasts drawn from reliable sources
of data and information and made in the best judgment and professional integrity of Colliers International.
Notwithstanding this, Colliers International reiterates that it will not accept any responsibilities in the face of
damage claims that might result from any error, omission or recommendations, viewpoints, judgments and
information provided in this report.
15.3 Colliers International, or any employee of Ours shall not be required to give testimony or to appear in court or
any other tribunal or to any government agency by reason of this valuation report or with reference to the
property in question unless prior arrangements have been made and we are properly reimbursed.
15.4 We are free from any possible legal and/ or non-legal issue which may attach to the Property's title documents.
16. ENTIRE AGREEMENT
16.1 No further agreement, amendment or modification of these Terms and Conditions shall be valid or binding
unless made in writing and executed on behalf of the Parties by their duly authorised officers.
16.2 If there is inconsistency between these Terms and Conditions and the Quotation, any letter of instruction from
You, or other specific request or information shall prevail to the extent of the inconsistency.
D-48
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
Jores Lar La3a||e lole|s (N3w) Ply. L|r|led
A.8.N. 5 0Z5 21Z 12
Leve| 2, 120 0eore 3lreel 3ydrey N3w 2000
le| 1 2 9220 8ZZZ lax 1 2 9220 8Z5
WWW.j||.cor/|osp|la||ly
Fraser losp|la||ly Assel Varaererl Ple Lld
(as raraer ol l|e Frasers losp|la||ly Rea| Eslale lrveslrerl Trusl)
138 A|exardra Road
#21-00, A|exardra Po|rl
SINGAPORE 119958
T|e Trusl Corpary (As|a) L|r|led
(as lruslee ol Frasers losp|la||ly Rea| Eslale lrveslrerl Trusl)
8 Var|ra 8ou|evard
#05-02 Var|ra 8ay F|rarc|a| Cerlre
SINGAPORE 018981
Frasers losp|la||ly Trusl Varaererl Ple. Lld
(as lruslee-raraer ol Frasers losp|la||ly 8us|ress Trusl)
138 A|exardra Road
#21-00, A|exardra Po|rl
SINGAPORE 119958
19 Jure 2011
0ear 3|rs,
VALUATION SUMMARIES FOR A PORTFOLIO OF TWO PROPERTIES IN AUSTRALIA
we are p|eased lo suor|l lo you our va|ual|or 3urrar|es lor l|e lo||oW|r properl|es (co||ecl|ve|y: l|e
'lole|s ard/or l|e 'Properl|es):
1. Client Brief and Purpose of Valuation
lr accordarce W|l| our Wr|ller |rslrucl|ors We |ave prepared l||s va|ual|or surrary |eller oased
or l|e |rlorral|or corla|red |r our lu|| ard lorra| va|ual|or reporls daled 31 Varc| 2011. T||s
surrary |eller |s prepared |r accordarce W|l| our va|ual|or proposa| lo urderla|e a va|ual|or ol
l|e Properl|es |derl|l|ed |r l|e prev|ous lao|e lor Fraser losp|la||ly Assel Varaererl Ple Lld, T|e
Trusl Corpary (As|a) L|r|led ard Frasers losp|la||ly Trusl Varaererl Ple. Lld (l|e C||erl/s).
0ur |rslrucl|ors Were corl|rred oy Way ol s|red acceplarce oy l|e C||erl ol our proposa| daled
28 Apr|| 2011.
we |ave oeer |rslrucled lo prov|de l|e C||erl W|l| our op|r|or ol l|e Var|el va|ue (as al 31 Varc|
2011) ol eac| ol l|e l|ree Properl|es W||c| are lo oe re||ed upor lor l|e lr|l|a| Puo||c 0ller|r (lP0)
ol l|e Frasers losp|la||ly Trusl ('FlT') or l|e Va|r 8oard ol l|e 3|rapore Exc|are 3ecur|l|es
Trad|r L|r|led ('30X-3T').
Name of Property State Type of Asset
Hotels
Novole| Roc|lord 0ar||r laroour N3w lole|
Serviced Residences
Fraser 3u|les 3ydrey N3w Res|derl|a| Aparlrerls
Valuation Summary for Portfolio of Two Assets in Australia Page 1
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-49
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
we |ave prepared a corpre|ers|ve va|ual|or reporl lor eac| ol l|e Properl|es |r accordarce W|l|
our |rslrucl|ors lror l|e C||erl. T||s |eller ard |ls allac|rerls (|rc|ud|r va|ual|or surrar|es)
s|ou|d oe read |r corjurcl|or W|l| our lu|| va|ual|or reporls daled 31 Varc| 2011 (l|e 'Fu||
va|ual|or Reporls). we role l|al l||s |eller does rol corla|r a|| ol l|e recessary |rlorral|or ard
assurpl|ors W||c| are dela||ed |r l|e Fu|| va|ual|or Reporls. T|e Fu|| va|ual|or Reporls lorr ar
|rlera| parl ol our adv|ce ard prov|de descr|pl|ve correrlar|es or l|e |rd|v|dua| Properl|es ard
l|e|r |oca| rar|els, dela|| erera|, spec|l|c ard spec|a| assurpl|ors urder W||c| eac| va|ual|or
|as oeer prepared.
2. Basis of Valuation
Eac| va|ual|or la|es |rlo accourl l|e va|ue ol a|| eslales |r l|e properly, ard |s oased or Var|el
va|ue as del|red oy l|e lrlerral|ora| va|ual|ors 3lardards Corr|llee ard adopled oy l|e
Auslra||ar Properly lrsl|lule (APl), Roya| lrsl|lul|or ol C|arlered 3urveyors (RlC3) ard l|e
3|rapore lrsl|lule ol 3urveyors ard va|uers (3l3v) W||c| |s:
The estimated amount for which an asset or liability should exchange on the valuation date
between a willing buyer and a willing seller in an arms length transaction after proper marketing
and where the parties had acted knowledgeably, prudently and without compulsion.
T|e va|ual|or 3lardards prov|des |rlerprel|ve correrlar|es or l|e aoove del|r|l|or.
Excepl W|ere slaled ol|erW|se, our va|ual|ors |ave oeer prepared |r accordarce W|l| l|e
lrlerral|ora| va|ual|or 3lardards ard our 3lardard Terrs ard Cord|l|ors adopled |r l|e
preparal|or ol va|ual|ors ard reporls (l|e '3lardard Terrs ard Cord|l|ors), W||c| are corla|red
W|l||r Apperd|x ll ard s|ou|d oe read |r corjurcl|or W|l| l||s |eller. Your allerl|or |s a|so draWr lo
l|e 0erera| Assurpl|ors ard L|r|l|r 3lalererls sel oul |r Apperd|x l.
As |rslrucled oy l|e C||erl, our assessrerl ol Novole| Roc|lord 0ar||r laroour represerls l|e
Var|el va|ue ol 100 ol l|e suo-|ease|o|d |rleresl exp|r|r |r approx|rale|y 81 years. Furl|er, our
assessrerl |as oeer urderla|er |av|r reard lo lulure lrad|r polerl|a| as a 'o|r corcerr'
|ole| suojecl lo l|e preva|||r raraererl ard lrarc||se areererls.
0ur assessrerl ol Fraser 3u|les 3ydrey |as oeer urderla|er or a res|derl|a| aparlrerl oas|s '|r
ore ||re' suojecl lo l|e proposed Z5 year |ease|o|d |rleresl W||c| We |ave oeer adv|sed W||| oe
lree ol ary rourd rerl requ|rererl. Nole l|e approva| lo 3lrala suod|v|de l|e serv|ced aparlrerls
|rlo res|derl|a| aparlrerl |apses or 25 Jure 2015. 0ur assessed va|ue lor l|e res|derl|a| ur|ls
assures l|e corserl |s acled or pr|or lo l||s dale ard pul |rlo lorce. Aller l|e deve|oprerl
corserl |apses, a ruc| |oWer va|ue Wou|d app|y.
we role l|al a|| properl|es |ave oeer assessed or a vacarl possess|or oas|s ol l|e proposed
rasler |ease areererl W||c| |s lerr|rao|e upor sa|e ol l|e properl|es al ro cosl lo l|e Lessor.
0ur va|ual|ors (excepl lor Fraser 3u|les 3ydrey) corpr|ses l|e va|ue allr|ouled lo l|e rea| eslale,
oodW||| ard lurr|lure, l|ll|rs ard equ|prerl used |r l|e day-lo-day operal|or ol l|e |ole|
ous|ress. 3uc| ar assessrerl exc|udes l|e va|ue ol sloc| or cred|ls lor payrerl l|ereol ard
assures a|| |lers ol lurr|lure, l|ll|rs ard equ|prerl corla|red |r l|e lole| car oe lrarslerred
W|l|oul pera|ly lo a reW oWrer.
Valuation Summary for Portfolio of Two Assets in Australia Page 2
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-50
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
T|e va|ual|ors |ave oeer prepared or l|e oas|s ol |rd|v|dua| properl|es or|y. A porllo||o va|ual|or
l|al cors|ders l|e polerl|a| d|scourl or prer|ur l|al ray app|y |l l|e properl|es Were lo oe so|d oy
Way ol a s|r|e lrarsacl|or |as rol oeer urderla|er ard |s ouls|de l|e scope ol l||s appo|rlrerl.
Comment on forecast EBITDA Levels
For l|e Novole| Roc|lord 0ar||r laroour We |ave urderla|er a 'o|r corcerr' assessrerl (|.e.
|av|r reard lo lulure lrad|r polerl|a| as a lu||y equ|pped ard operal|r erl|ly) We |ave rev|eWed
l|e ||slor|c perlorrarce, currerl ard arl|c|paled rar|el lrerds as We|| as var|ous assurpl|ors
roled W|l||r eac| va|ual|or reporl.
0ur cas| l|oW projecl|ors ard esl|rale ol |||e|y prol|lao|||ly (E8lT0A) are cors|dered lo oe W|l||r
rar|el pararelers, parl|cu|ar|y W|er |av|r reard lo ol|er corparao|e properl|es W|l||r s|r||ar
rar|els l|rou|oul Auslra||a ard |r l|e case ol Novole| Roc|lord 0ar||r laroour soreW|al
rel|ecls raraererl's v|eW ol polerl|a| d|srupl|or ar|s|r lror l|e deve|oprerl Wor|s oe|r
urderla|er al l|e 3ydrey Corverl|or Cerlre ard arl|c|paled al 3ydrey Erlerla|rrerl Cerlre.
0ur lorecasls are W|al We cors|der Wou|d oe ac||evao|e oy a reasorao|y ell|c|erl qua||l|ed
|rlerral|ora|/ral|ora| raraererl corpary (averae raraererl) ard l|erelore rol recessar||y
l|e sare as l|ose l|al r||l oe ac||eved or are oudeled oy currerl raraererl
3. Date of Valuation
As |rslrucled, l|e dale ol eac| va|ual|or |s 31 Varc| 2011.
0ur va|ual|or l|erelore assures l|al l|ere |as oeer ro raler|a| c|are lo l|e |ole| or rar|el
oelWeer l|e dale ol |rspecl|or ard dale ol va|ual|or. 0ue lo poss|o|e c|ares |r l|e rar|el
ard/or c|rcurslarces re|al|r lo l|e properly, l|e va|ual|or s|ou|d or|y oe rearded as re|evarl as
al l|e dale ol |ssue ol l||s reporl.
T|e va|ues assessed |ere|r ray c|are s|r|l|carl|y ard urexpecled|y over a re|al|ve|y s|orl
per|od ol l|re (|rc|ud|r as a resu|l ol erera| rar|el rovererls or laclors spec|l|c lo l|e
parl|cu|ar properly). we do rol accepl ||ao|||ly lor l|e |osses ar|s|r lror suc| suosequerl c|ares
|r va|ue. w|l|oul ||r|l|r l|e erera||ly ol l|e aoove, We do rol assure ary respors|o|||ly or accepl
ary ||ao|||ly |r c|rcurslarces W|ere l||s va|ual|or |s re||ed upor aller l|e exp|ral|or ol 90 days lror
l|e dale ol va|ual|or, or suc| ear||er dale |l you oecore aWare ol ary laclors l|al |ave ary ellecl
or l|e va|ual|or. loWever, |l s|ou|d oe recor|sed l|al l|e 90 day re||arce per|od does rol
uararlee l|e va|ue lor l|al per|od, |l a|Ways rera|rs a va|ual|or al l|e dale ol va|ual|or or|y.
lr accordarce W|l| lrlerral|ora| va|ual|or 3lardards, |l |s adv|sed l|al urusua| va|ual|or
c|rcurslarces are reporled |l appropr|ale. lr l||s reard, We role l|al lo||oW|r l|e deler|oral|or ol
l|e |ooa| ecorory al l|e oe|rr|r ol 2008 l|ere Was a erera| reducl|or |r lrade ol properl|es.
F|rarc|a| rar|el |rslao|||ly corl|rues lo cause urcerla|rly |r l|e Wor|d's cap|la| rar|els ard rea|
eslale rar|els. w|||e ||qu|d|ly |r l|e rea| eslale rar|el |as suosequerl|y relurred lo rore rorra|
|eve|s, parl|cu|ar|y lor lrop|y ard We|| |ocaled qua||ly assels, l|ere rera|rs sore |ac| ol c|ar|ly as
lo pr|c|r |eve|s lor ror-pr|re rar|els ouls|de l|ese areas. Recerl y|e|ds lor pr|re |ole|s |r
aleWay |ocal|ors are rol recessar||y app||cao|e lo l|e W|der rar|el, parl|cu|ar|y l|ose properl|es |r
resorl or re|ora| |ocal|ors W|ere l|e ouyer prol||e lerds lo oe We||led loWards rore opporlur|sl|c
|rveslors or l|ose W|l| s|orler |rveslrerl |or|zors. w|||e lrarsacl|ors corl|rue lo occur l|al
|rvo|ve verdors W|o are rore corpe||ed lo se||, or purc|asers W|o or|y ouy al d|scourled pr|ces,
l|ese are cors|dered lo oe corlr|oul|r |ess lo lola| rar|el ||qu|d|ly.
Valuation Summary for Portfolio of Two Assets in Australia Page 3
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-51
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
lr l||s erv|rorrerl, pr|ces ard va|ues appear lo |ave oeer |ess vo|al||e over l|e |asl 18 rorl|s
corpared lo l|e |r|l|a| years ol l|e 0FC |oWever cord|l|ors |ave yel lo rorra||se ard l|e polerl|a|
rera|rs lor va|ual|ors ard op|r|ors ol va|ue or Worl| lo c|are rap|d|y. T|e averae per|od
requ|red lo reol|ale a sa|e appears lo |ave reduced oul ray corl|rue lo oe exlerded
cors|derao|y aoove l|e |or lerr averae parl|cu|ar|y lor properl|es W|l| oWrers||p corp|ex|l|es or
|arer properl|es requ|r|r suoslarl|a| |rveslrerl. Corsequerl|y, We corl|rue lo recorrerd l|al
va|ues oe rev|eWed al reu|ar |rlerva|s ard users ol l||s reporl see| our |alesl op|r|or or l|e
rar|el lor l|e|r rea| eslale dec|s|ors.
4. Qualifications and Assumptions
T|ese va|ual|ors are prepared or l|e oas|s ol l|e 3lardard Terrs ard Cord|l|ors W||c| corpr|ses
a ||sl ol l|e rajor assurpl|ors ard ||r|l|r cord|l|ors urder W||c| our op|r|ors are |ver. T|ese
are corla|red W|l||r Apperd|x ll (as allac|ed lo l||s |eller) ard s|ou|d oe read |r corjurcl|or W|l|
l||s |eller ard l|e va|ual|or surrar|es. 0l|er |ey assurpl|ors are sel oul |r l|e 0erera|
Assurpl|ors ard L|r|l|r 3lalererls W||c| are corla|red W|l||r Apperd|x l. ll |s a cord|l|or ol l|e
use ol eac| va|ual|or l|al l|e rec|p|erl ol l|e reporl accepls l|ese slalererls. 3pec|l|c
assurpl|ors rade |r respecl ol eac| parl|cu|ar va|ual|or are sel oul |r l|e correrlary prov|ded |r
l|e Fu|| va|ual|or Reporls.
we a|so ||||||l l|e lo||oW|r 3pec|l|c Assurpl|ors W|l| reards lo ool| va|ual|ors:
T|e Fraser 3u|les 3ydrey va|ual|or |as oeer urderla|er or ool| a '0ross Rea||sal|or' ard ar
'lr 0re L|re' oas|s. we are ol l|e op|r|or l|al l|e rosl su|lao|e rel|od ol va|ual|or lo oe
app||ed lor l|e purposes ol l||s |eller |s l|e 'lr 0re L|re' va|ual|or as l|e 0ross Rea||sal|or
approac| requ|res ar exlerded per|od lo slrala l|l|e ard se|| eac| ol l|e res|derl|a| aparlrerls
|r order lo oola|r l|e 0ross Rea||sal|or va|ual|or arourl.
we |ave oeer adv|sed oy l|e C||erl l|al urder l|e proposed RElT oWrers||p slruclure l|al l|e
oWrers||p |rleresl |r l|e Fraser 3u|les 3ydrey Wou|d oe |e|d oy Way ol a Z5 year |ease|o|d
|rleresl W|||e Novole| Roc|lord 0ar||r laroour Wou|d oe |e|d oy Way ol ar 81 year suo-
|ease|o|d arrarererl. we are adv|sed l|al l|e |rleresl |r ool| properl|es Wou|d rol carry
ary rerla| oo||al|ors, |oWever l|e cord|l|ors ard slruclure are lo oe cors|slerl W|l| ol|er
|ease|o|d arrarererls lo oe app||ed lor l|e RElT oWrers||p slruclure.
w|||e requesled, l|e lerrs ol l|e |ease slruclure lor e|l|er properly |ave rol oeer
prov|ded. For l|e purposes ol our assessrerls surrar|sed |ere|r |l |s exp||c|l|y assured l|al
l|ese proposed |eases corla|r ro orerous or ror-rar|el lerrs or cord|l|ors l|al ray allecl
va|ue or ercuroer l|e assel. w|l| reards lo l||s assurpl|or, We |ave re||ed or ool| veroa|
ard Wr|ller adv|ce ard corl|rral|or ol l|e alorererl|ored lror l|e C||erl. 3|ou|d l||s adv|ce
vary, We reserve l|e r||l lo arerd our va|ual|or corla|red |ere|r accord|r|y W|l|oul ||ao|||ly,
ll |s assured l|al l|e aoove oWrers||p slruclure re|al|r lo ool| l|e properl|es |s lo lac|||lale
l|e proposed |o|d|r slruclure or|y W||c| We are adv|sed |s oelWeer re|aled erl|l|es. lerce, |l
|s lurl|er adv|sed ard assured l|al |r l|e everl ol a sa|e ol e|l|er properly, l||s slruclure car
oe urWourd ard eac| properly so|d W|l| l|e oerel|l ol vacarl possess|or ol l||s |ease or suo-
|ease |r l|e case ol Novole| Roc|lord 0ar||r laroour. NolW|l|slard|r, |l |s assured l|al |r
l|e case ol Novole| Roc|lord 0ar||r laroour, l|e pre-ex|sl|r |ease arrarererl (as
correrled |ere|r) rera|rs |r p|ace. 3|ou|d l||s rol oe l|e case, We reserve l|e r||l lo
arerd our va|ual|or accord|r|y W|l|oul ||ao|||ly,
Valuation Summary for Portfolio of Two Assets in Australia Page 4
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-52
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
we |ave oeer prov|ded W|l| a copy ol a drall rasler |ease areererl, W||c| We are |rlorred
oy l|e C||erl, W||| oe ur|lorr lor eac| properly va|ued |ere|r. we |ave oeer lurl|er prov|ded
W|l| a supp|ererlary surrary ol l|e |ey lerrs W||c| deroles l|e arourls ol l|e oase ard
var|ao|e rerls as We|| as l|e arourl ol FF&E Reserve payao|e lor eac| properly,
we are lurl|er rol|l|ed l|al l|e rasler |ease arrarererl car oe lerr|raled upor sa|e ol l|e
assels ard ro lerr|ral|or lee |s payao|e. 0ur va|ual|ors |ere|r |ave l|erelore oeer
urderla|er or l||s assurpl|or. Jores Lar La3a||e recorrerds a copy ol l|e l|ra| rasler
|ease areererl |s prov|ded lo us orce |l |s execuled lo ersure l|e lerrs ol suc| are a||r lo
l|ose dela||ed W|l||r l|e lu|| va|ual|or reporls ard W|l||r l||s |eller,
we a|so role l|e drall rasler |ease prov|ded ard surrar|sed |ere|r re|ales lo a sarp|e
properly ard l|e C||erl |as prov|ded l|e correcl erl|ly rares lor eac| properly. 3|ou|d |l oe
revea|ed l|al l|e execuled copy ol l|e rasler |ease areererl var|es lo l|al W||c| We |ave
oeer prov|ded ard adv|sed, l|e var|arces ray |ave a raler|a| |rpacl or l|e va|ual|ors
corla|red |ere|r ard We l|erelore reserve l|e r||l lo arerd our va|ual|or accord|r|y W|l|oul
||ao|||ly,
lr l|e case ol Fraser 3u|les 3ydrey, We role l|al l|e C|ly ol 3ydrey approva| lo slrala
suod|v|de l|e serv|ced aparlrerls |rlo res|derl|a| aparlrerls |apses or 25 Jure 2015. 0ur
0ross Rea||sal|or ard |r 'ore ||re' va|ue lor l|e res|derl|a| ur|ls assures l|e corserl |s acled
or pr|or lo l||s dale. Aller l||s corserl |apses or|y a serv|ced aparlrerl 'o|r corcerr' va|ue
Wou|d app|y ur|ess l|e corserl |s rarled orce aa|r oy Courc||. we slress l|al aller l|e
|apse ol l||s corserl l|ere |s ro uararlee l|al l|e slrala suod|v|s|or va|ue W||| oe alla|rao|e
aa|r due lo l|e r|s| ol Courc|| rol re-approv|r l|e corvers|or due lo l|e currerl urdersupp|y
ol |ole| roors |r l|e 3ydrey C80,
Furl|er, |r l|e case ol l|e Fraser 3u|les 3ydrey, We role l|al our assessrerl |as oeer
urderla|er or l|e assurpl|or l|al lerr|ral|or ol l|e preva|||r raraererl areererl upor
|ypol|el|ca| sa|e |s ava||ao|e (as per l|e areererl). A lerr|ral|or lee |s requ|red lo oe pa|d
lo Fraser (Vasler Lessee) |r l|e everl ol lerr|ral|or upor sa|e |oWever We |ave oeer
|rslrucled oy l|e C||erl rol lo deducl l||s lerr|ral|or lee lror our va|ual|or as urder l|e
proposed slruclure, l|e oWrers||p erl|ly (|.e. Lessor oe|r l|e RElT) Wou|d rol oe requ|red lo
ra|e suc| a payrerl W|l| l|e ||ao|||ly oe|r W|l| l|e Vasler Lessee. we role l|al our
assessrerl |s l|erelore suojecl lo us oe|r prov|ded W|l| l|e appropr|ale docurerlal|or lo
corl|rr l|e dela||s adv|sed dur|r our d|scuss|ors. 3|ou|d |l oe revea|ed l|al l||s |s rol l|e
case, l||s W||| |ave a raler|a| |rpacl or l|e va|ual|or |ere|r, ard We reserve l|e r||l lo
arerd l||s va|ual|or accord|r|y W|l|oul ||ao|||ly,
lr |||l ol l|e aoove, lor l|e purposes ol our va|ual|or, Fraser 3u|les 3ydrey |as oeer
assessed or a vacarl possess|or oas|s ol l|e raraererl areererl W|||e Novole| Roc|lord
0ar||r laroour |as oeer assessed suojecl lo l|e preva|||r raraererl ard lrarc||se
areererls,
0r-o|r raraererl ol Novole| Roc|lord 0ar||r laroour oy a reasorao|y ell|c|erl qua||l|ed
|rlerral|ora|/ral|ora| raraererl corpary (averae raraererl) W|l| l|e recessary
rar|el|r/reserval|or |rlraslruclure |r p|ace lo rarae suc| properl|es,
Furl|errore, ary lrad|r projecl|ors |ere|r are assured lo oe urder l|e averae
raraererl assurpl|or aoove. 3uc| projecl|ors, l|rarc|a| ara|ys|s or va|ue cors|deral|or |r
l||s reporl are va|ual|or loo|s or|y, ard s|ou|d rol oe represerled |r ary Way as prov|d|r a
represerlal|or, Warrarly or |rd|cal|or ol l|e aclua| lulure prol|l ard cas| l|oW,
Valuation Summary for Portfolio of Two Assets in Australia Page 5
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
0ur va|ual|ors do rol |rvesl|ale or cors|der l|e slruclure ol l|e |ole| oWrers||p erl|l|es, ror
do l|ey |ave reard lo ary |eases or s|de areererls rol re|slered or l|e l|l|e docurerl
(ol|er l|ar l|e proposed Lease arrarererls dela||ed |ere|r) ard assure l|e oWrers||p
slruclure Wou|d rol ooslrucl l|e ord|rary sa|e ol l|e Properl|es. T||s assurpl|or |as oeer
rade |r l|e aoserce ol ar experl |ea| |rlerprelal|or ard op|r|or. As We are rol |ea| experls,
We recorrerd l|al appropr|ale experl adv|ce oe sou|l lo corl|rr l|e va||d|ly ol l||s
assurpl|or,
T|al l|e prev|ous vo|al|||ly |r |ooa| cred|l rar|els W||| rol relurr lo l|e exlerl l|al cou|d
jeopard|se currerl |eve|s ol operal|ora| ard |rveslor serl|rerl preva|||r |r l|e Auslra||ar
Tour|sr properly |rveslrerl rar|el,
T|al l|ere are ro raler|a| c|ares lo l|e properl|es or rar|el/s oelWeer l|e dale ol
|rspecl|or ard dale ol va|ual|or, ard
T|al l|e Auslra||ar ecorory W||| corl|rue lo rera|r corslra|red over l|e s|orl lerr |r |||l ol
|ooa| ecoror|c urcerla|rly preva|||r currerl|y ard l|erealler recover ard relurr lo lo||oW ar
overa|| roWl| lrerd l|rou| l|e lorecasl per|od |r-||re W|l| currerl Federa| 0overrrerl
expeclal|ors.
5. Information and Confidentiality
lr urderla||r our assessrerls, We |ave re||ed upor var|ous sources ol |rlorral|or prov|ded lo us
oy l|e C||erl, currerl oWrers ard l|e|r represerlal|ves. Jores Lar La3a||e la|es ro respors|o|||ly
lor ary darae or |oss oy reasor ol |raccuracy or |rcorreclress ol l||s reporl as a resu|l ol
|rlorral|or prov|ded lo us.
T||s |eller corla|rs |rlorral|or ol a corl|derl|a| ralure re|al|r lo l|e oWrers||p, raraererl,
ous|ress ard l|rarc|a| perlorrarce ol l|e Properl|es ard |as oeer supp||ed lo Jores Lar La3a||e
lor l|e spec|l|c purpose ol l||s va|ual|or.
6. Scope of Work and Approach
To accorp||s| l|e oojecl|ves ol l||s |rslrucl|or We |ave:
P|ys|ca||y |rspecled l|e Properl|es,
lrlerv|eWed ard rece|ved |rlorral|or lror l|e |rd|v|dua| lole| Varaers ard l|e C||erl,
Vade appropr|ale erqu|r|es aooul l|e |oca| rar|els W|l| re|evarl aul|or|l|es, ard
used Jores Lar La3a||e va|ual|or corpuler rode|||r lo prepare our ara|ys|s ard
corc|us|ors.
0ur va|ual|ors |ave oeer urderla|er ul|||s|r l|e rel|ods l|al are ra|r|y cors|dered oy polerl|a|
|rveslors, rare|y:
0|scourled cas| l|oW (0CF) approac|, ard
Cap|la||sal|or approac|.
T|e se|ecled va|ual|or cr|ler|a used |r l|ese approac|es |ave oeer der|ved lror recerl rar|el
lrarsacl|ors ard l|e resu|larl va|ues c|ec|ed aa|rsl l|ese lrarsacl|ors or a va|ue per roor
oas|s.
For l|e |ole| va|ual|or, our projecl|ors ol occuparcy ard averae da||y rale d|d rol |rvo|ve l|e
urderla||r ol a spec|l|c rar|el derard sludy oul ral|er are oased or our |roW|ede ard
Valuation Summary for Portfolio of Two Assets in Australia Page 6
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
urderslard|r ol l|e |oca| |ole| rar|els ard our exper|erce ol l|e operal|r perlorrarce ol |ole|s
ol s|r||ar s|ze ard slardard.
T|e cas| l|oW lorecasls ard va|ue esl|rale |ave oeer prepared |av|r reard lo:
l|slor|ca| roor supp|y, roor derard ard averae da||y rales,
Erer|r lrerds |r l|e var|ous respecl|ve |oca| |ole| rar|els, ard
T|e expecled lulure supp|y ol |ole| accorrodal|or |r l|e var|ous rar|els as al l|e dale ol
our assessrerl.
T|e assurpl|ors |r respecl lo lulure everls are our oesl esl|rales al l|e dale ol prepar|r l|e
va|ual|ors. To l|e exlerl l|al ary ol l|e assurpl|ors rade (ard W||c| are roled |r our Fu||
va|ual|or Reporls) are rol rea||sed, l|e |rd|cal|ve cas| l|oW projecl|ors ard esl|rale ol va|ue ray
oe raler|a||y allecled.
0ur assessrerls are oased upor currerl as We|| as expecled lulure cord|l|ors as perce|ved oy l|e
rar|el. we do slress l|al l|e esl|ral|or ol lulure rar|el cord|l|ors |s a very proo|eral|c exerc|se
W||c| al oesl s|ou|d oe rearded as ar |rd|cal|ve assessrerl ol poss|o|||l|es ral|er l|ar aoso|ule
cerla|rl|es.
T|e process ol ra||r lorWard projecl|ors |rvo|ves assurpl|ors reard|r a cors|derao|e ruroer
ol var|ao|es W||c| are acule|y sers|l|ve lo c|ar|r cord|l|ors. To re|y upor our va|ual|ors,
l|erelore, l|e reader rusl oe sal|sl|ed as lo l|e reasor|r oe||rd l|ese lulure esl|rales.
7. Valuation Methodology Novotel Rockford Darling Harbour
T||s secl|or or|el|y surrar|ses Jores Lar La3a||e's' approac| lo l|e va|ual|or ol Novole|
Roc|lord 0ar||r laroour.
lole| |rveslrerls are erera||y purc|ased or l|e oas|s ol lulure |rcore polerl|a|. Pasl
perlorrarce prov|des sore u|de lo l|e lulure perlorrarce ol a |ole|, oul oller reW racro-
ecoror|c laclors or |oca| supp|y |ssues rear l|al a lres| v|eW reeds lo oe la|er ol l|e
perlorrarce polerl|a| ol l|e |ole|.
Discounted Cash flow (DCF)
To arr|ve al ar esl|rale ol l|e |ole|'s cap|la| va|ue, We prepare ar |rcore ard experd|lure lorecasl
W||c| |s l|er cap|la||sed us|r a d|scourled cas| l|oW rode|. T||s lorecasl represerls W|al We
oe||eve a polerl|a| purc|aser Wou|d adopl as oe|r rea||sl|c esl|rales ol l|e |ole|'s lulure |rcore
polerl|a|. T||s |s rol recessar||y l|e sare as currerl |ole| raraererl ray projecl, oul
represerls W|al a prospecl|ve purc|aser r||l oe||eve |s reasorao|e as a oas|s lor acqu|s|l|or.
T|e lorecasl |s prepared lor a l|ve-year per|od. A d|scourl rale |s l|er app||ed lo l|e l|rsl l|ve years
ol projecl|ors. T|e cas| l|oW |r l|e s|xl| year |s cap|la||sed al ar assured cap|la||sal|or rale, ard
delerred al l|e d|scourl rale, ard |rcorporaled lo arr|ve al l|e lola| |rveslrerl l|ure. T|e c|o|ce ol
cap|la||sal|or rale |s se|ecled oy relererce lo ||slor|c |ole| lrarsacl|or ev|derce, y|e|d ev|derce ol
ol|er lorrs ol correrc|a| properly, rar|el laclors ard l|e lerure, ae, |ocal|or ard cord|l|or ol
l|e properly. lr order lo arr|ve al our d|scourl rale, We la|e accourl ol |or lerr |rl|al|or
expeclal|ors, ard l|e perce|ved r|s| ol l|e operal|or re|al|ve lo ol|er properl|es ard l|e
ac||evererl ol our cas| l|oW projecl|ors. lr accordarce W|l| our rorra| pracl|ce, We l|er cross
c|ec| l|e va|ual|or aa|rsl ol|er reasures suc| as l|e resu|larl rurr|r y|e|ds ard pr|ce per
roor.
Valuation Summary for Portfolio of Two Assets in Australia Page 7
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
lrlerral|ora| ard doresl|c purc|asers rera|r corcerred W|l| cas| l|oWs ard W|l| eslao||s|ed or
ac||eved lrad|r l|ures, as We|| as read||y loreseeao|e |rcore l|oWs. T|ese laclors |ave a slror
|rpacl or purc|as|r dec|s|ors ard We l|erelore |ave reard lo l|e |r|l|a| ard |||e|y relurrs lo ar
|rveslor/purc|aser |r l|e ear|y years.
lav|r arr|ved al ar esl|rale ol lola| |rveslrerl, W||c| We cors|der reasorao|e, We l|er deducl, |l
appropr|ale, ary cap|la| experd|lure, W||c| ar |rveslor Wou|d requ|re lo sperd |r l|e loreseeao|e
lulure.
we |ave |rc|uded |r our Fu|| va|ual|or Reporls our cas| l|oW projecl|ors ard correrls l|ereor.
Capitalisation Approach
Cap|la||sal|or rel|odo|oy corverls l|e loreseeao|e earr|r capac|ly ol l|e |ole| |rlo a currerl
cap|la| va|ue oy l|e app||cal|or ol a rar|el der|ved/requ|red y|e|d. T|e |rcore used |s l|e
projecled rel |rcore aller raraererl lees ard FF&E Reserve oul oelore |rleresl, deprec|al|or,
laxal|or ard arorl|sal|or (E8l0TA).
T|e y|e|d |s se|ecled aller la||r |rlo cors|deral|or:
0erorslraled rar|el y|e|ds,
T|e p|ys|ca| appea| ard qua||ly ol l|e ou||d|r ard |ls lac|||l|es,
T|e |ocal|or, zor|r ard polerl|a| ol l|e urder|y|r |or lerr suo-|ease|o|d lerure,
T|e earr|rs prol||e over l|e |asl lour years (W|ere ava||ao|e),
Expeclal|ors ol earr|rs roWl|, ard
T|e su|lao|||ly ol l|e currerl operalor ard l|e lerrs ol l|e currerl raraererl areererls.
Aa|r, l|e cap|la| va|ue produced |s l|er cross c|ec|ed aa|rsl ol|er reasures suc| as pr|ce per
roor.
8. Valuation Methodology Fraser Suites Sydney
w|l| reard lo delerr|r|r a va|ue lor l|e res|derl|a| usae ol 188 Kerl 3lreel 'Fraser 3u|les We
ul|||sed d|recl corpar|sor |r delerr|r|r ar 'As ll Corp|ele 0ross Rea||sal|or ard 'lr 0re L|re
va|ue. we |ave a|so d|scourled l|e 0ross Rea||sal|ors oy 25 lo accourl lor l|e sa|e ol l|e ur|ls
or a Z5 year |ease|o|d oas|s as opposed lo l|e usua| lree|o|d |r perpelu|ly |ard l|l|e.
we lurl|er role l|al our va|ual|or ol l||s properly |as oeer urderla|er or ool| a '0ross
Rea||sal|or' ard ar 'lr 0re L|re' oas|s. we are ol l|e op|r|or l|al l|e rosl su|lao|e rel|od ol
va|ual|or lo oe app||ed lor l|e purposes ol l||s |eller |s l|e 'lr 0re L|re' va|ual|or as l|e 0ross
Rea||sal|or approac| requ|res ar exlerded per|od lo slrala l|l|e ard se|| eac| ol l|e res|derl|a|
aparlrerls |r order lo oola|r l|e va|ual|or arourl.
As If Complete Gross Realisations
lr delerr|r|r l|e 'As ll Corp|ele' va|ue ol l|e suojecl properl|es We |ave re||ed upor l|e
corpar|sor approac|. 3uc| ar approac| |rvo|ves ara|ys|r ava||ao|e corparao|e sa|es ev|derce,
la||r |rlo cors|deral|or |ocal|or, ae, s|ze ard qua||ly ol |rprovererls W|ere ava||ao|e. T|e 'As
ll Corp|ele va|ue assures l|e slrala p|ar |s re|slered ard sal|slaclory corp|el|or ol l|e
deve|oprerl corserl lor 115 aparlrerls ard 905 square relers ol correrc|a| |s |r p|ace.
Valuation Summary for Portfolio of Two Assets in Australia Page 8
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31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
In One Line Valuation
we |ave a|so prov|ded ar 'lr 0re L|re va|ue W||c| lrades al a d|scourl lo l|e 0ross Rea||sal|or
va|ue. lr order lo delerr|re l|e 'lr 0re L|re va|ue (ard suosequerl d|scourl) We |ave rur a
d|scourled cas| l|oW assur|r l|al l|e purc|aser Wou|d oe a specu|alor/|rveslor W|l| l|e |rlerl|or
lo rese|| l|e ur|ls |rd|v|dua||y.
T||s rel|od reasures l|e 'lr 0re L|re va|ue lor l|e properly aller ra||r appropr|ale
a||oWarces lor |o|d|r c|ares, corvers|or/reluro|s|rerl cosls, lrarsacl|or cosls, sa|es per|ods
elc. ard a reasorao|e prol|l or l|e verlure aller la||r |rlo accourl l|e r|s|s |rvo|ved. T||s ara|ys|s
assures 100 deol l|rarc|r. 0ur assessrerl ol va|ue |as oeer urderla|er ul|||s|r l|e Eslale
Vasler Vode| vers|or 5.3.
9. Pecuniary Interest
we corl|rr l|al We are rol a re|aled corporal|or ol l|e C||erl ard l|al l|e va|uers ard Jores Lar
La3a||e |ave ro ecoror|c |rleresl |r l|e C||erl or l|e suojecl properl|es l|al Wou|d corl||cl W|l| l|e
proper va|ual|or ol l|e Properl|es or cou|d reasorao|y oe rearded as oe|r capao|e ol allecl|r
l|e va|uers' ao|||ly lo |ve ar uro|ased op|r|or.
10. Use of Report
lr accordarce W|l| our slardard pracl|ce We rusl slale l|al l||s |eller |s corl|derl|a| ard lor l|e use
or|y ol l|e C||erl lor l|e purpose lo W||c| |l relers. No respors|o|||ly or ||ao|||ly |s accepled lo ary
l||rd parl|es ard re|l|er l|e W|o|e ror ary parl ror ary relererce l|erelo ray oe puo||s|ed |r ary
docurerl, slalererl or c|rcu|ar ror |r corrur|cal|or W|l| l||rd parl|es W|l|oul our pr|or Wr|ller
approva| ol l|e lorr ard corlexl |r W||c| |l W||| appear.
lr l|e everl our corserl |s |ver ard l||s va|ual|or surrary appears |r l|e Prospeclus lo oe
|ssued oy l|e Varaer |r correcl|or W|l| l|e oller|r ol ur|ls |r l|e Frasers losp|la||ly Trusl (l|e
Prospeclus), We spec|l|ca||y d|sc|a|r ||ao|||ly lo ary persor |r l|e everl ol ary or|ss|or lror or
la|se or r|s|ead|r slalererl |rc|uded |r l|e Prospeclus, ol|er l|ar |r respecl ol l|e |rlorral|or
prov|ded W|l||r l|e va|ual|or reporls ard surrary. we do rol ra|e ary Warrarly or
represerlal|or as lo l|e accuracy ol l|e |rlorral|or |r ary parl ol l|e Prospeclus ol|er l|ar as
express|y rade or |ver |r l||s va|ual|or surrary.
NolW|l|slard|r l|e aoove, |r l|e everl l|al Jores Lar La3a||e corserls lo l|e d|sc|osure ol l||s
|eller ard our va|ual|ors |r correcl|or W|l| l|e lP0, suc| d|sc|osure |s approved so|e|y lor l|e
purpose ol prov|d|r |rlorral|or lo polerl|a| |rveslors or ary ol|er |rleresled persor. Ne|l|er l||s
|eller, ror l|e allac|ed va|ual|or surrar|es ror our Fu|| va|ual|or Reporls purporl lo corla|r a|| l|e
|rlorral|or l|al a polerl|a| purc|aser or ary ol|er |rleresled parly ray requ|re. T|ey do rol la|e
|rlo accourl l|e |rd|v|dua| c|rcurslarces, l|rarc|a| s|lual|or, |rveslrerl oojecl|ves or requ|rererls
ol a polerl|a| purc|aser or ary ol|er persor. T|ey are |rlerded lo oe used as a u|de or|y ard do
rol corsl|lule adv|ce, |rc|ud|r W|l|oul ||r|lal|or, |rveslrerl, lax, |ea| or ary ol|er lype ol adv|ce.
T|e va|ues slaled |ere|r are, |r l|e op|r|or ol Jores Lar La3a||e, l|e oesl esl|rales ard s|ou|d
rol lo oe corslrued as a uararlee or pred|cl|or. Furl|errore eac| va|ual|or |s lu||y deperderl
upor l|e accuracy ol l|e assoc|aled assurpl|ors rade. Polerl|a| lrveslors s|ou|d rol re|y or ary
raler|a| corla|red |r l||s reporl as a slalererl or represerlal|or ol lacl oul s|ou|d sal|sly
l|erse|ves as lo |ls correclress oy suc| |rdeperderl |rvesl|al|or as l|ey or l|e|r |ea| or l|rarc|a|
adv|sors see l|l aller rev|eW|r l|e va|ual|or reporl lo urderslard l|e parl|cu|ar assurpl|ors ard
Valuation Summary for Portfolio of Two Assets in Australia Page 9
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-57
Liability limited by a scheme approved under Professional Standards Legislation
methodologies made in the preparation of the valuations and to appreciate the context in which the
values are arrived at.
This report contains information provided by third parties. Figures, calculations and other
information contained in this report that has been provided to Jones Lang LaSalle by third parties
have not been independently verified by Jones Lang LaSalle and Jones Lang LaSalle takes no
responsibility for it and subsequent conclusions related to such data.
Jones Lang LaSalle, its directors, employees, affiliates and representatives shall not be liable
(except to the extent that liability under statute or by operation of law cannot be excluded) to any
person for any loss, liability, damage or expense arising from or connected in any way with any use
of or reliance on this report.
For and on behalf of
Jones Lang LaSalle Hotels (NSW) Pty Ltd
David J Marriott AAPI
v|ce Pres|dent - Strateg|c Adv|sory
0ert|f|ed Pract|s|ng va|uer
Property va|ued: Novote| Rockford
0ar||ng harbour
Bill Fatouros FAPI
0|rector
0ert|f|ed Pract|s|ng va|uer
Property va|ued: Fraser Su|tes Sydney
Troy Craig FAPI MRICS
Vanag|ng 0|rector - Strateg|c Adv|sory
0ert|f|ed Pract|s|ng va|uer
Iiatility liuitcc ty a schcuc appicvcc urcci Picfcssicral 5tarcaics Icislaticr.
Valuation Summary for Portfolio of Two Assets in Australia Page 10
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-58
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
VALUATION SUMMARY
Property : Novole| Roc|lord 0ar||r laroour, s|lualed al 1Z L|ll|e P|er 3lreel, 3ydrey, NeW 3oul|
wa|es Auslra||a (l|e 'Properly ard/or l|e 'lole|).
Tenure : T|e |ard |s |ease|o|d |r ralure (approx|rale|y 85 years rera|r|r) W|l| l|e re|slered
oWrer oe|r l|e 3ydrey laroour Fores|ore Aul|or|ly ard |s corla|red or Lol 301 or
0epos|led P|ar 102Z1. T|e lole| operales pursuarl lo l|e prov|s|ors ol a
Varaererl Areererl W||c| Was recerl|y rereol|aled W|l| Roc|lord lole|
Varaererl ard exp|res or 31 0eceroer 2018 as We|| as a Frarc||se Areererl W|l|
AAPC W||c| exp|res or 31 Auusl 2018.
we are adv|sed l|al a proposed 81 year suo-|ease|o|d slruclure |s oe|r dralled as parl
ol l|e RElT ||sl|r lor l||s properly, ard our assessrerl |as oeer urderla|er or l||s
oas|s. we |ave oeer lurl|er adv|sed l|al l||s |rleresl |r l|e properly Wou|d rol carry
ary rerla| oo||al|ors. 3|ou|d l||s vary l|e va|ual|or |ere|r W||| vary raler|a||y ard We
l|erelore reserve l|e r||l lo arerd our va|ual|or accord|r|y W|l|oul ||ao|||ly.
ll |s assured l|al l|e aoove oWrers||p slruclure |s lo lac|||lale l|e proposed |o|d|r
slruclure or|y W||c| We are adv|sed |s oelWeer re|aled erl|l|es. lerce, |l |s lurl|er
adv|sed ard assured l|al |r l|e everl ol a sa|e, l||s slruclure car oe urWourd ard l|e
properly car oe so|d W|l| l|e oerel|l ol vacarl possess|or ol l|e suo-|ease.
NolW|l|slard|r, |l |s assured l|al l|e pre-ex|sl|r |ease arrarererl (as roled W|l||r
aoove) rera|rs |r p|ace. 3|ou|d l||s rol oe l|e case, We reserve l|e r||l lo arerd our
va|ual|or accord|r|y W|l|oul ||ao|||ly.
w|||e requesled, l|e lerrs ol l|e proposed |ease slruclure |ave rol oeer prov|ded. For
l|e purpose ol our assessrerl surrar|zed |ere|r, |l |s exp||c|l|y assured l|al l|e
proposed |ease corla|rs ro orerous or ror-rar|el lerrs or cord|l|ors l|al ray allecl
va|ue or ercuroer l|e assel. we |ave re||ed or ool| veroa| ard Wr|ller adv|ce ard
corl|rral|or |r l||s reard lror l|e C||erl. 3|ou|d l||s adv|ce vary, We reserve l|e r||l
lo arerd our va|ual|or corla|red |ere|r accord|r|y W|l|oul ||ao|||ly.
Location : Novole| Roc|lord 0ar||r laroour |s s|lualed or l|e correr ol laroour ard L|ll|e P|er
3lreels, or l|e ede ol l|e C80 C||raloWr Prec|rcl oppos|le l|e 3ydrey Erlerla|rrerl
Cerlre. T|e pr|rary access lo l|e |ole| |s lror laroour 3lreel.
Property
Description
: T|e lole| |s ar e||l slorey, lour ard a |a|l slar |ole| corpr|s|r 230 uesl roors, lWo
reslaurarls, oar, cal ard lurcl|or roors. Add|l|ora| uesl lac|||l|es |rc|ude ar |rdoor
sW|rr|r poo| ard l|lress cerlre. Car par||r |s prov|ded lo uesls v|a ar adjacerl
puo||c car par||r ou||d|r. T|e properly Was opered |r 1999 ard adjo|rs a 110 year o|d
|er|lae ||sled ou||d|r W||c| |as oeer reluro|s|ed as l|e |ole|'s Purp|ouse Reslaurarl
ard 8ar.
Master
Lease
Agreement
: we |ave oeer prov|ded W|l| a copy ol a drall pro-lorra rasler |ease areererl, W||c|
We are |rlorred oy l|e C||erl cou|d oe lerr|raled upor sa|e ol l|e |ole| assel. lr
add|l|or, We |ave oeer prov|ded W|l| a supp|ererlary surrary ol l|e |ey lerrs W||c|
deroles l|e arourls ol l|e oase ard var|ao|e rerls as We|| as l|e arourl ol FF&E
Reserve payao|e lor eac| properly. T|e |ey lerrs surrary a|so |rd|cales l|al l|ere |s
ro lerr|ral|or lee payao|e |r l|e everl l|al l|e |ease |s lerr|raled |oWever We do role
l|al l||s c|ause does rol appear |r l|e drall pro-lorra prov|ded.
lr |||l ol l|e aoove, We role l|al our va|ual|or |as oeer prepared or l|e spec|l|c
Valuation Summary for Portfolio of Two Assets in Australia Page 11
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-59
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
assurpl|or l|al l|e l|ra| rasler |ease docurerl W||| |rcorporale l|e lerrs recessary lo
erao|e l|e sa|e ol l|e assel W|l| vacarl possess|or ol l|e rasler |ease ard lurl|er l|al
l|ere Wou|d oe ro lerr|ral|or lee payao|e. 3|ou|d l||s rol oe l|e case We reserve l|e
r||l lo arerd our va|ual|or W|l|oul ||ao|||ly.
we a|so role l|e drall rasler |ease prov|ded ard surrar|sed |ere|r re|ales lo a
sarp|e properly ard l|e C||erl |as prov|ded l|e correcl erl|ly rares lor eac| properly.
Jores Lar La3a||e recorrerds a copy ol l|e l|ra| rasler |ease areererl |s prov|ded
lo us orce |l |s execuled lo ersure l|e lerrs ol suc| are a||r lo l|ose dela||ed |ere|r.
T|e drall pro-lorra rasler |ease areererl ard adv|sed |ey lerrs are co||ecl|ve|y
surrar|sed oe|oW:
Lessor: Frasers l-RElT
Lessee: 0o|der 3|oWer 0eve|oprerl (PTC) L|r|led
Terr: 20 years
0pl|or(s): 0re opl|or ol 20 years
8ase Rerl: Au02,500,000 per arrur (exc. 03T)
Turrover Rerl: 3ur ol 0 ol 0ross 0peral|r Reverue ard 81.0 ol 0ross
0peral|r Prol|l roors reverue |ess oase rerl.
FF&E
Corlr|oul|or
3.0 ol 0ross 0peral|r Reverue
Terr|ral|or: T|e Lessor ray se|| or ass|r |ls |rleresl |r l|e Prer|ses al ary l|re
dur|r l|e lerr lree ard c|ear ol l||s Lease ard suc| sa|e or
ass|rrerl W||| rol oe suojecl lo l||s Lease |l l|e Lessor lerr|rales
l||s Lease W|l| Wr|ller rol|ce lo l|e Lessee.
We have reviewed the draft pro-forma master lease and can
confirm that termination is available upon sale of the hotel. Our
valuation herein, has been undertaken on the specific
assumption that the lease agreement is terminable with no
compensation payable by the Lessor to the Lessee as indicated
in the summary of key terms provided. Jones Lang LaSalle
recommends a copy of the final master lease is provided once it
is executed to ensure the terms of such are consistent with the
terms summarised herein.
Should it be revealed that the executed copy of the master lease
agreement varies to that which we have been provided and
advised, the variances may have a material impact on the
valuation contained herein and we therefore reserve the right to
amend our valuation accordingly without liability.
Management
Agreement /
Franchise
Agreement
: T|e lole| operales pursuarl lo l|e prov|s|ors ol ool| a Varaererl Areererl W|l|
Roc|lord lole|s Ply L|r|led ard Frarc||se Areererl W|l| AAPC Properl|es Ply
L|r|led. T|e Varaererl Areererl correrced or 1 Jaruary 2011 lor ar |r|l|a| lerr
ol 5 years, W|l| ore lurl|er l|ve year opl|or. T|e Frarc||se Areererl correrced or 1
Valuation Summary for Portfolio of Two Assets in Australia Page 12
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-60
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
3epleroer 2013 lor ar |r|l|a| lerr ol 5 years W|l| ro lurl|er opl|or lo rereW. we role
l|al urder l|e lerrs ol l|e raraererl areererl ard lrarc||se areererl, a 8ase
Varaererl Fee, lrcerl|ve Varaererl Fee, Frarc||se Fee ard FF&E Reserve are
payao|e.
we |ave oeer adv|sed l|al l||s properly W||| corl|rue lo oe operaled suojecl lo ool| a raraererl
areererl ard lrarc||se areererl ard our va|ual|or |as l|erelore oeer carr|ed oul or l||s oas|s. 0ur
va|ual|or |s pred|caled or l|e aoove ard We slress l|al, s|ou|d l||s |rlerprelal|or prove |rcorrecl, our
va|ual|or ray oe raler|a||y ard/or adverse|y allecled.
Historic
Trading
: we |ave oeer prov|ded W|l| lrad|r accourls lor l|e pasl l|ree l|rarc|a| years erd|r 31
0eceroer 2010, 2011, 2012 ard 2013 as We|| as l|e year lo dale resu|ls lor l|e l|ree
rorl|s lo Varc| 2011 ard raraererls lorecasl lor l|e lu|| year erd|r 31 0eceroer
2011.
Key perlorrarce |rd|calors lor 2010 - 2011 are surrar|sed oe|oW:
We note that all amounts herein are expressed in Australian dollars.
Trad|r 3urrary
( Expressed lr Aclua| 0o||ar va|ues )
ACTuAL ACTuAL ACTuAL ACTuAL F0RECA3T (39)
V0NTl3 12 12 12 12 12
PERl00 EN0lN0 0ec-10 0ec-11 0ec-12 0ec-13 0ec-11
R00V3 230 230 230 230 230
0CCuPANCY 85.9 8.9 89.0 90.2 88.2
AvERA0E 0AlLY RATE (AS) 11 15 15Z 1 18
R00V YlEL0 (AS)
R00V YlEL0 ClAN0E
AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o
T0TAL REvENuE 11,83 100.0 15,22 100.0 1,112 100.0 1Z,390 100.0 1,89 100.0
0R033 0PERATlN0 PR0FlT* 5,1Z 38.0 ,255 10.0 ,103 39.Z Z,50Z 13.2 ,998 11.1
NET 0PERATlN0 lNC0VE (E8lT0A)** 1,291 1,810 1,800 5,Z01 5,132
N0TE3
*AFTER 0E0uCTl0N 0F 8A3E VANA0EVENT FEE
**AFTER PR0PERTY TAX, lN3uRANCE, FF&E RE3ERvE AN0 VANA0EVENT FEE3
2.Z Z.Z -1.0
12 13 139 150 119
Z.9
T|e aoove l|ures corpr|se a surrary ol ||slor|c lrad|r |rlorral|or prov|ded lo us oy
l|e C||erl as al 31 Varc| 2011 ard do rol ra|e ary a||oWarce lor ar suosequerl
rev|s|ors, arerdrerls or re-lorecasls l|al ray |ave oeer rade s|rce l|al dale.
Trading
Forecast
: For va|ual|or purposes We |ave prepared a cas| l|oW projecl|or lor l|e |ole| over a l|ve
year per|od oased upor our |roW|ede ol l|e rar|el ard l|e ara|ys|s ol l|e reverue
ard experse |eve|s al l||s |ole| over recerl l|res. T|ese projecl|ors represerl our
assessrerl ol l|e l|ures l|al r||l oe prepared oy polerl|a| purc|asers ard are rol
recessar||y l|e sare as l|ose l|al r||l oe ac||eved or are oudeled oy currerl
raraererl.
We note that all amounts herein are expressed in Australian dollars.
Valuation Summary for Portfolio of Two Assets in Australia Page 13
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-61
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
Trad|r Forecasl
( Expressed lr Esca|aled 0o||ar va|ues )
PERl00 1 2 3 1 5
YEAR EN0lN0 JuNE 2015 201 201Z 2018 2019
R00V3 230 230 230 230 230
0CCuPANCY 8Z 8Z 8Z 8 85
AvERA0E 0AlLY RATE (AS) 1Z0 182 193 203 211
A0R ClAN0E
R00V YlEL0 (AS)
R00V YlEL0 ClAN0E
AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o AS' 000s Ral|o
T0TAL REvENuE 1,Z1Z 100.0 1Z,Z31 100.0 18,Z0 100.0 19,310 100.0 19,88 100.0
0R033 0PERATlN0 PR0FlT* Z,391 11.1 8,102 15.Z 8,Z50 1.9 9,1Z3 1Z.1 9,11Z 1Z.5
NET 0PERATlN0 lNC0VE (E8lT0A)** 5,3Z 5,91 ,19 ,83 Z,012
N0TE3
*AFTER 0E0uCTl0N 0F 8A3E VANA0EVENT FEE
**AFTER PR0PERTY TAX, lN3uRANCE, FF&E RE3ERvE AN0 VANA0EVENT FEE3
1Z9 118 158 18 1Z5
Z.0 .2 1.1 2.Z
1.0 Z.0 .1 5.0
Market Value
1
(with Special
Assumptions)
Subject to the
Comments
and
Assumptions
contained
within our full
valuation
report
:
Au0 ,000,000 (3lXTY 3lX VlLLl0N Au3TRALlAN 00LLAR3)
1
Var|el va|ue ol l|e suo-|ease|o|d |rleresl |r l|e Properly suojecl lo l|e preva|||r
raraererl ard lrarc||se areererl |oWever or a vacarl possess|or oas|s ol l|e
proposed rasler |ease areererl, loel|er W|l| a|| l|xlures, l|ll|rs, lurr|lure ard
equ|prerl, as a lu||y equ|pped operal|ora| erl|ly, |av|r reard lo lrad|r polerl|a|, (|.e. or a
'o|r corcerr' oas|s).
Date of
Valuation
: 31 Varc| 2011
Notice : T||s va|ual|or surrary s|ou|d oe read |r corjurcl|or W|l| l|e lu|| va|ual|or reporl daled 31
Varc| 2011, W||c| dela||s l|e cord|l|ors ard assurpl|ors urder W||c| l||s va|ual|or |s
prepared.
Valuation Summary for Portfolio of Two Assets in Australia Page 14
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-62
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
VALUATION SUMMARY
Property : Fraser 3u|les 3ydrey al 188 Kerl 3lreel, 3ydrey, NeW 3oul| wa|es, Auslra||a (l|e
'Properly ard/or l|e 'lole|).
Tenure : T|e Properly |s descr|oed as Lol 2 |r 0epos|led P|ar 1102151 ard |s |e|d urder
slralur lree|o|d l|l|e.
we are adv|sed l|al a proposed Z5 year |ease|o|d slruclure |s oe|r dralled as
parl ol l|e RElT ||sl|r lor l||s properly, ard our assessrerl |as oeer
urderla|er or l||s oas|s. we |ave oeer lurl|er adv|sed l|al l||s |rleresl |r l|e
properly Wou|d rol carry ary rerla| oo||al|ors. 3|ou|d l||s vary l|e va|ual|or
|ere|r W||| vary raler|a||y ard We l|erelore reserve l|e r||l lo arerd our
va|ual|or accord|r|y W|l|oul ||ao|||ly.
ll |s assured l|al l|e aoove oWrers||p slruclure |s lo lac|||lale l|e proposed
|o|d|r slruclure or|y W||c| We are adv|sed |s oelWeer re|aled erl|l|es. lerce,
|l |s lurl|er adv|sed ard assured l|al |r l|e everl ol a sa|e, l||s slruclure car oe
urWourd ard l|e properly car oe so|d W|l| l|e oerel|l ol vacarl possess|or ol
l|e |ease. 3|ou|d l||s rol oe l|e case, We reserve l|e r||l lo arerd our
va|ual|or accord|r|y W|l|oul ||ao|||ly.
w|||e requesled, l|e lerrs ol l|e proposed |ease slruclure |ave rol oeer
prov|ded. For l|e purpose ol our assessrerl surrar|zed |ere|r, |l |s exp||c|l|y
assured l|al l|e proposed |ease corla|rs ro orerous or ror-rar|el lerrs or
cord|l|ors l|al ray allecl va|ue or ercuroer l|e assel. we |ave re||ed or ool|
veroa| ard Wr|ller adv|ce ard corl|rral|or |r l||s reard lror l|e C||erl. 3|ou|d
l||s adv|ce vary, We reserve l|e r||l lo arerd our va|ual|or corla|red |ere|r
accord|r|y W|l|oul ||ao|||ly.
Location : Fraser 3u|les 3ydrey |s s|lualed W|l||r l|e Weslerr corr|dor ol l|e 3ydrey
Cerlra| 8us|ress 0|slr|cl or l|e easlerr s|de ol Kerl 3lreel soul| ol |ls
|rlersecl|or W|l| 8al|ursl 3lreel. T|e properly |s cerlra||y |ocaled |r l|e c|ly ard
|s W|l||r c|ose prox|r|ly lo ToWr la||, C||raloWr, 0ar||r laroour, wor|d
3quare rela||/oll|ce ard erlerla|rrerl prec|rcl ard l|e l|rarc|a| ard rela||
prec|rcls ol l|e C80. T|e lole| |s a|so W|l||r Wa|||r d|slarce lo Coc||e 8ay
w|arl lealur|r lVAX l|ealre, 3ydrey Corverl|or ard Ex||o|l|or Cerlre,
rurerous reslaurarls ard erlerla|rrerl lac|||l|es.
Property
Descriptio
n
: T|e suojecl properly corpr|ses a r|xed use 32 |eve| ou||d|r corp|eled |r
0eceroer 200. T|e properly |s currerl|y operal|r as a 'o|r corcerr' ol 201
serv|ced aparlrerl/roors W|l| deve|oprerl approva| lor corvers|or ol use lo
res|derl|a| aparlrerls (115 ur|ls). T|e proposed ur|l r|x corpr|ses 88 x 1
oedroor, 55 x 2 oedroor, 1 x 2 oedroor dup|ex perl|ouse ard 1 x 3 oedroor
dup|ex perl|ouse. lr add|l|or lo l|e res|derl|a| ur|ls l|ere |s 905r2 ol
correrc|a| area across 8 ur|ls or 3 |eve|s. Corror lac|||l|es ava||ao|e lo l|e
properly |rc|ude L|orary/erlerla|rrerl roor, Furcl|or roors, yrras|ur,
recreal|or roor, spa roor, |ap poo|, s|oWers, saura ard ra|e/lera|e
arer|l|es.
Master Lease
Agreement
: As |rslrucled We |ave urderla|er our assessrerl ol Fraser 3u|les 3ydrey as
res|derl|a| aparlrerls or a ross rea||sal|or oas|s '|r ore ||re' assur|r a Z5
year |ease|o|d l|l|e. we lurl|er role l|al l|ere |s a drall rasler |ease currerl|y
Valuation Summary for Portfolio of Two Assets in Australia Page 15
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-63
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
oe|r prepared lor l||s properly |oWever |ver l|e res|derl|a| oas|s ol va|ual|or
app||ed our va|ual|or assures l|al l||s |ease Wou|d rol oe execuled over l|e
properly. lr l|e everl l|al |l |as oeer execuled our va|ual|or lurl|er assures
l|al |l Wou|d oe lerr|raled W|l| ro lerr|ral|or lee oe|r payao|e W||c| |s
cors|slerl W|l| l|e adv|sed lerrs ol l|e proposed rasler |ease. 3|ou|d l||s rol
oe l|e case, We reserve l|e r||l lo arerd our va|ual|or accord|r|y W|l|oul
||ao|||ly.
Given that the assessment of the property reported herein is on a
residential apartment basis in one line our valuation assumes that the
proposed master lease and prevailing management agreement would not
be in force which would therefore enable the sell down of the apartments
which forms a key assumption in our in one line valuation of this
property. The summary of this proposed master lease and prevailing
management agreement detailed below are therefore contained in this
report by way of background information only.
T|e drall pro-lorra rasler |ease areererl ard adv|sed |ey lerrs are
co||ecl|ve|y surrar|sed oe|oW:
Lessor: Frasers l-RElT
Lessee:
Frasers ToWr la|| Res|derces Ply Lld
Terr:
20 years
0pl|or(s): 0re opl|or ol 20 years
8ase Rerl: Au01,200,000 per arrur (exc. 03T)
Turrover Rerl: 3ur ol 20.0 ol 0ross 0peral|r Reverue ard
51.5 ol 0ross 0peral|r Prol|l roors reverue |ess
oase rerl.
FF&E Corlr|oul|or 2.5 ol 0ross 0peral|r Reverue
Terr|ral|or: T|e Lessor ray se|| or ass|r |ls |rleresl |r l|e
Prer|ses al ary l|re dur|r l|e lerr lree ard c|ear ol
l||s Lease ard suc| sa|e or ass|rrerl W||| rol oe
suojecl lo l||s Lease |l l|e Lessor lerr|rales l||s
Lease W|l| Wr|ller rol|ce lo l|e Lessee.
We have reviewed the draft pro-forma master
lease agreement and can confirm that termination
is available upon sale of the hotel. We note
however that our valuation has been undertaken
on a residential in one line basis and therefore
have not had regard to the proposed master lease
agreement. In the event that it has been executed
our valuation further assumes that it would be
terminated with no termination fee being payable
which is consistent with the advised terms of the
proposed master lease. Should this not be the
Valuation Summary for Portfolio of Two Assets in Australia Page 16
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
case, we reserve the right to amend our valuation
accordingly without liability.
Management
Agreement
: we are aWare l|al l|e properly, currerl|y lrad|r as a |ole| suojecl lo a
preva|||r raraererl areererl. loWever our assessrerl or a ross
rea||sal|or oas|s '|r ore ||re' |as oeer urderla|er or l|e assurpl|or l|al suc|
raraererl areererl car oe lerr|raled upor sa|e.
we role l|al lerr|ral|or upor |ypol|el|ca| sa|e suojecl lo a lerr|ral|or lee
payao|e lo Fraser |s ava||ao|e urder l|e lerrs ol l||s areererl. 0ur
d|scuss|ors W|l| l|e C||erl |ave |rd|caled |oWever, l|al due lo l|e slruclure ol
l|e RElT, l||s lerr|ral|or payrerl Wou|d rol oe payao|e al l|e properly
oWrers||p |eve|. 0ur va|ual|or, |as l|erelore oeer urderla|er or l|e spec|l|c
assurpl|or l|al |r l|e everl ol a |ypol|el|ca| sa|e, a lerr|ral|or payrerl Wou|d
rol oe payao|e oy l|e properly oWrer, ard l|erelore |as rol oeer deducled
lror our assessrerl. 3|ou|d |l oe revea|ed l|al l||s |s rol l|e case, l||s W|||
|ave a raler|a| |rpacl or l|e va|ual|or |ere|r, ard We reserve l|e r||l lo
arerd l||s va|ual|or accord|r|y W|l|oul ||ao|||ly.
w|ere rallers ar|se re|al|r lo l|e corlerl ol l|e Varaererl Areererl ard |ls |rlerprelal|or,
|rdeperderl |ea| adv|ce |s lo oe oola|red oy l|e C||erl. Furl|errore |l |s esserl|a| l|al l|e erl|re
Varaererl Areererl |s relererced oy l|e C||erl ard |ls |ea| adv|sors. Jores Lar La3a||e does
rol prov|de |ea| adv|ce ard does rol exlerd ary ||ao|||ly |r l||s reard.
0ur va|ual|or |s pred|caled or l|e aoove ard We slress l|al, s|ou|d l||s |rlerprelal|or proves |rcorrecl,
our va|ual|or ray oe raler|a||y ard/or adverse|y allecled.
Development
Application
we role a deve|oprerl app||cal|or (0/2009/1112) Was |oded W|l| l|e C|ly ol
3ydrey lor l|e c|are ol use ol ToWer 8 lror serv|ced aparlrerls lo res|derl|a|
aparlrerls p|us slrala suod|v|s|or ard r|ror |rlerra| a|leral|ors W|l||r l|e
oasererl lo prov|de add|l|ora| slorae. we role l|al approva| Was oola|red or
25 Jure 2010 ard exp|res or 25 Jure 2015.
Our Gross Realisation Value for the residential units assumes the consent
is acted on prior to this expiry date (i.e. 25 June 2015).
After the development consent lapses, it is likely that a materially lower
valuation would apply relative to the one reported herein. After the lapse of
this consent there is no guarantee that the strata subdivision value will be
attainable again due to the risk of council not approving the conversion
due to the undersupply of hotel rooms in the Sydney CBD.
Gross
Realisation
Market Value
1
Subject to the
Comments and
Assumptions
2
contained
within our full
valuation
report
: Au0 99,800,000 (NlNETY NlNE VlLLl0N El0lT luN0RE0 Tl0u3AN0
Au3TRALlAN 00LLAR3)
1
0ross Rea||sal|or va|ue ol l|e 115 res|derl|a| aparlrerls ard 905 square
relers ol correrc|a| space or a Z5 year |ease|o|d oas|s assur|r vacarl
possess|or ol l|e proposed rasler |ease areererl ard l|e raraererl
areererl.
2
T|e aoove va|ues assure l|e slrala p|ar |s re|slered ard sal|slaclory
corp|el|or ol l|e deve|oprerl corserl lor 115 aparlrerls ard 905 square
Valuation Summary for Portfolio of Two Assets in Australia Page 17
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
D-65
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
relers ol correrc|a| |s |r p|ace.
In one line
Market Value
1
Subject to the
Comments and
Assumptions
2
contained
within our full
valuation
report
: Au0 Z,500,000 (3EvENTY 3lX VlLLl0N FlvE luN0RE0 Tl0u3AN0
Au3TRALlAN 00LLAR3)
1
'lr ore ||re'
va|ue ol l|e 115 res|derl|a| aparlrerls ard 905 square relers ol
correrc|a| space or a Z5 year |ease|o|d oas|s assur|r vacarl possess|or ol
l|e proposed rasler |ease areererl ard l|e raraererl areererl.
2
T|e aoove va|ues assure l|e slrala p|ar |s re|slered ard sal|slaclory
corp|el|or ol l|e deve|oprerl corserl lor 115 aparlrerls ard 905 square
relers ol correrc|a| |s |r p|ace.
Date of
Valuation
: 31 Varc| 2011
Notice : T||s va|ual|or surrary s|ou|d oe read |r corjurcl|or W|l| l|e lu|| va|ual|or
reporl daled 31 Varc| 2011 W||c| dela||s l|e cord|l|ors ard assurpl|ors urder
W||c| l||s va|ual|or |s prepared.
As s|oWr aoove, our va|ual|or ol l||s properly |as oeer urderla|er or ool| a '0ross Rea||sal|or' ard
ar 'lr 0re L|re' oas|s. we are ol l|e op|r|or l|al l|e rosl su|lao|e rel|od ol va|ual|or lo oe app||ed lor
l|e purposes ol l||s |eller |s l|e 'lr 0re L|re' va|ual|or as l|e 0ross Rea||sal|or approac| requ|res ar
exlerded per|od lo slrala l|l|e ard se|| eac| ol l|e res|derl|a| aparlrerls |r order lo oola|r l|e va|ual|or
arourl.
Valuation Summary for Portfolio of Two Assets in Australia Page 18
Prepared for Fraser Hospitality Asset Management Pte Ltd, The Trust Company (Asia) Limited and Frasers
Hospitality Trust Management Pte Ltd
31 March 2014
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
APPENDIX I
0ENERAL A33uVPTl0N3 AN0 LlVlTlN0 3TATEVENT3
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
GENERAL ASSUMPTIONS AND LIMITING STATEMENTS
we Wou|d a|so draW your allerl|or lo l|e lo||oW|r |ey assurpl|ors ard ||r|lal|ors rade |r respecl ol
eac| ol l|e Properl|es:
1. we |ave assured l|al l|e |rlorral|or prov|ded lo us |s correcl, parl|cu|ar|y l|al l|e |ole|'s ||slor|c
operal|r l|ures accurale|y rel|ecl |ls lrad|r ||slory.
2. ll |s assured l|al eac| properly |rc|udes a|| operal|r equ|prerl, lurr|lure, l|xlures, l|ll|rs ard
equ|prerl recessary lo rarae a |ole| ol l||s slardard, l|al l|ey Wou|d rera|r |r eac| properly
or sa|e ard l|al l|e equ|prerl |s oWred, rol |eased. we |ave rol separale|y assessed l|e
lrarslerao|e va|ue ol l|e oodW||| ror rade ar |rverlory or separale|y assessed l|e va|ue ol
lurr|lure, l|ll|rs, p|arl ard equ|prerl.
3. ll |s a|so assured l|al eac| properly |s oper lor ous|ress ard W||| corl|rue lo lrade rorra||y up
url|| l|e dale ol sa|e. T|e va|ual|ors lurl|er assure a prospecl|ve purc|aser Wou|d erae l|e
ex|sl|r slall (oul rol recessar||y l|e ser|or raraererl) ard la|e over l|e oerel|l ol lulure
ooo||rs.
1. we |ave assured l|e raraererl ol eac| |ole| W||| operale l|e |ole| corpelerl|y. ll s|ou|d oe
erp|as|sed l|al ac||evererl ol lrad|r perlorrarce rera|rs |are|y re||arl or l|e s|||| ard
experl|se ol l|e |ole| raraererl, (parl|cu|ar|y lor a reW ous|ress). we |ave re|l|er eva|ualed
raraererl's ellecl|veress ror are respors|o|e lor lulure rar|el|r ellorls ard ol|er
raraererl acl|ors upor W||c| aclua| lrad|r resu|ls W||| deperd. 3ore assurpl|ors |rev|lao|y
W||| rol raler|a||se ard urarl|c|paled everls ard c|rcurslarces ray occur. T|erelore, aclua|
resu|ls ac||eved dur|r l|e ara|ys|s per|od W||| vary lror l|e assurpl|ors ard l|e d|llererce ray
oe raler|a|.
5. we |ave rol lu||y searc|ed ror ver|l|ed l|e aul|erl|c|ly ol l|e |ard l|l|es. 0ur va|ual|or |s prepared
or l|e assurpl|or l|al l|e properly ard l|l|e |s lrarslerred lree ard c|ear ol ercurorarces,
reslr|cl|ors, or ol|er |rped|rerls ol ar orerous ralure, W||c| Wou|d allecl va|ue. 0ur va|ual|or |s
rade or l|e oas|s l|al l|e properly |s lrarslerred lree ol rorlaes, c|ares ard ol|er l|rarc|a|
||ers.
. we |ave rol corducled a |ard survey lo ver|ly l|e |ard oourdar|es ard s|le areas ard W|el|er a||
deve|oprerls ard |rprovererls are W|l||r suc| oourdar|es. we |ave assured, ur|ess ol|erW|se
slaled, l|al a|| deve|oprerls ard |rprovererls are W|l||r l|e oourdar|es ol suc| |ard parce| as
descr|oed |r l||s reporl ard l|e |ard parce| |s lu||y oWred oy l|e properly oWrer.
Z. we |ave rol |ad s||l ol a zor|r cerl|l|cale, ou||d|r, l|re salely cerl|l|cale or ol|er slalulory
requ|rererls, ard |l |s assured, ur|ess ol|erW|se slaled, l|al a|| appropr|ale ||cerces ard
approva|s are |e|d lo operale eac| |ole| ard l|e var|ous lood ard oeverae lac|||l|es. ll |s assured
l|al eac| properly corp||es W|l| l|e requ|rererls ol a|| |oca| overrrerl reu|al|ors. ll |s a|so
assured l|al eac| |ole| |as l|e oerel|l ol a|| recessary p|arr|r corserls ard l|al l|ey are
suojecl lo ro urusua|, orerous or reslr|cl|ve cord|l|ors.
8. we |ave rol carr|ed oul a slruclura| survey ror |ave We lesled ary ol l|e serv|ce |rsla||al|ors, ard
l|erelore are urao|e lo slale eac| properly |s lree lror delecl. we |ave rol arrared lor ary
|rvesl|al|or lo oe carr|ed oul lo delerr|re W|el|er or rol ary de|eler|ous or |azardous raler|a|
|as oeer used |r l|e corslrucl|or ol l|e Properly or |as s|rce oeer |rcorporaled ard, l|erelore,
We are urao|e lo reporl l|al l|e Properly |s lree lror r|s| |r l||s respecl. For l|e purpose ol l||s
reporl, We |ave assured l|al suc| |rvesl|al|or Wou|d rol d|sc|ose l|e preserce ol ary suc|
raler|a| lo ary s|r|l|carl exlerl.
Appendix I - General Assumptions and Limiting Statements Page 1
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
9. 0ur |rspecl|ors Were ||r|led lo areas W|ere We |ad access lo ard v|eW|r ol lyp|ca| ueslroor
ard ol|er lac|||l|es. we |ave assured l|al |rlorral|or prov|ded oy 083 8ar| L|r|led ard sourced
lror l|e raraererl ol l|e lole|s, |rc|ud|r l|e lole| lacl s|eels ard rar|el|r raler|a|s, W|l|
respecl ol roor |rverlory, lypes, s|zes ard corl|ural|ors, Food ard 8everae oul|els, reel|r,
recreal|or ard ol|er lac|||l|es |s raler|a||y correcl ard corp|ele.
10. we Were rol |rslrucled lo carry oul ary |rvesl|al|ors or s|le |r order lo delerr|re l|e su|lao|||ly ol
rourd cord|l|ors ard serv|ces, ror d|d We urderla|e arc|aeo|o|ca|, eco|o|ca| or erv|rorrerla|
surveys. 3|ou|d |l oe eslao||s|ed suosequerl|y l|al corlar|ral|or (|rc|ud|r l|e preserce ol
asoeslos |r ary ol l|e ou||d|rs), suos|derce or ol|er delecls ex|sl al l|e s|les or or ary
re||oour|r |ard, or l|al l|e s|les |ave oeer or are oe|r pul lo ary corlar|raled use, We
reserve l|e r||l lo adjusl l|e va|ues reporled |ere|r.
11. we |ave assured l|al eac| Properly Wou|d oe proper|y ard ellecl|ve|y rar|eled lo ool| doresl|c
ard |rlerral|ora| purc|asers a||oW|r a reasorao|e per|od ol l|re (oe|r oelWeer s|x ard r|re
rorl|s) lor exposure lo l|e rar|el ard reol|al|or. we |ave a|so assured l|al eac| |ole|'s
ex|sl|r raraererl Wou|d ass|sl |r l|e rar|el|r process ard prov|de a|| re|evarl |rlorral|or. ll
|s lurl|er presured l|al l|e pr|ce Wou|d rol oe adverse|y allecled oy a rorlaee la||r
possess|or ard d|spos|r ol l|e Properly urder lorced c|rcurslarces.
12. we |ave assured slao|||ly |r ous|ress, lour|sr, ecoror|c ard po||l|ca| s|lual|ors |r eac|
respecl|ve slale |r W||c| l|e Properl|es are |ocaled ard l|al ro s|r|l|carl c|ares ol ar adverse
ralure W||| occur. we a|so assure l|e |eve| ol l|e var|ous respecl|ve |oca| currerc|es aa|rsl ol|er
Wor|d currerc|es W||| rera|r as allracl|ve lo overseas v|s|lors as al l|e dale ol va|ual|or.
Appendix I - General Assumptions and Limiting Statement s Page 2
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APPENDIX II
3TAN0AR0 TERV3 AN0 C0N0lTl0N3 A00PTE0 lN TlE PREPARATl0N 0F vALuATl0N3
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
STANDARD TERMS & CONDITIONS ADOPTED IN
THE PREPARATION OF VALUATIONS
Explanation
Fo||oW|r are l|e slardard lerrs ard cord|l|ors l|al app|y |r l|e preparal|or ol va|ual|ors or
corsu|larcy ass|rrerls. T|ese lerrs lorr parl ol l|e appo|rlrerl lor Jores Lar La3a||e lo prov|de
l|e serv|ces corla|red |r l|e proposa| lo W||c| l||s apperd|x app||es.
Exclusion on Use and Liability
T|e va|ual|or reporl W||| oe prepared lor ard W||| oe corl|derl|a| lo l|e C||erl lor l|e spec|l|c purpose
oul||red aoove. Jores Lar La3a||e does rol |rlerd l|al ary ol|er parl|es accepl or re|y upor l|e reporls.
No ||ao|||ly lor re||erce or ol|erW|se W||| oe assured oy Jores Lar La3a||e lor ary |oss or darae
sullered oy ary ol|er parly.
T|e C||erl arees l|al e|l|er l|e W|o|e or ary parl ol l|e reporl or l|e suoslarce l|ereol W||| oe
corrur|caled lo ary ol|er persor W|l|oul l|rsl oola|r|r l|e Wr|ller corserl ol Jores Lar La3a||e. T|e
C||erl lurl|er arees l|al |l |l does corrur|cale lo ary ol|er persor, l|e W|o|e or ary parl ol l|e reporl, or
l|e suoslarce ol |l, l|e C||erl W||| a|so corrur|cale l|e lerrs ol our eraererl lo l|al ol|er persor ard
W||| lu||y |rderr|ly Jores Lar La3a||e |r l|e everl ol ary la||ure lo do so.
Performance of the Services
Jores Lar La3a||e s|a|| exerc|se a|| reasorao|e s|||| ard care |r prov|d|r l|e 3erv|ces ard s|a||
|rlorr l|e C||erl |l |l oecores apparerl l|al l|e 3erv|ces reed lo oe var|ed. Jores Lar La3a||e s|a||
corl|rr |r Wr|l|r ary areererl reac|ed.
Valuation Basis
ur|ess slaled lo l|e corlrary |r l|e proposa|, l|e va|ual|or prov|ded W||| oe l|e rar|el va|ue as del|red
oy l|e lrlerral|ora| Assels va|ual|ors 3lardards Corr|llee as:
The estimated amount for which an asset should exchange on the date of valuation between a willing
buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had
each acted knowledgeably, prudently and without compulsion.
Jores Lar La3a||e W||| accepl l|e |rlorral|or prov|ded |r ood la|l| ard re|y upor l|al |rlorral|or as
oe|r lrue ard accurale |r prepar|r |ls adv|ce, |oWever l|e |rslrucl|r parly ac|roW|edes l|al s|ou|d
l|e |rlorral|or prov|ded oe |rcorp|ele ard/or |rcorrecl:
a) |l W||| |ave ro c|a|r W|alsoever aa|rsl Jores Lar La3a||e lor |oss or daraed sullered oy l|e
|rslrucl|r parly or ary l||rd parly, ard
o) |l W||| lu||y |rderr|ly Jores Lar La3a||e aa|rsl ary |oss, darae or ||ao|||ly (|rc|ud|r a|| |ea|
lees |rcurred |r delerd|r ar acl|or) |r re|al|or lo a c|a|r oy ary l||rd parly lor ary |oss or darae
sullered.
Environmental Issues
T|e rec|p|erl ol l|e va|ual|or ac|roW|edes l|al Jores Lar La3a||e |s rol l|e re|evarl experl lo
prepare ar erv|rorrerla| aud|l reporl ard l|al l||s va|ual|or W||| rol |r ary Way corsl|lule ar
erv|rorrerl aud|l.
Appendix II Standard Terms & Conditions Adopted in the Preparation of Valuations Page 1
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L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
Town Planning and Other Statutory Regulations
lrlorral|or or ToWr P|arr|r |s oller oola|red veroa||y lror l|e Loca| P|arr|r Aul|or|ly ard We
recorrerd ver|l|cal|or lror l|e re|evarl aul|or|ly oe oola|red l|al corl|rrs:
a) l|e pos|l|or |s correcl|y slaled |r Jores Lar La3a||e reporl,
o) l|e properly |s rol adverse|y allecled oy ary ol|er dec|s|ors rade, or cord|l|ors prescr|oed oy
puo||c aul|or|l|es,
c) l|al l|ere are ro oulslard|r slalulory rol|ces.
3|ou|d l|e |rlorral|or prov|ded lo Jores Lar La3a||e prove lo oe |rcorrecl, We reserve l|e r||l lo
arerd our va|ual|or.
0ur va|ual|ors are prepared or l|e oas|s l|al l|e prer|ses (ard ary Wor|s l|erelo) corp|y W|l| a||
re|evarl slalulory reu|al|ors, |rc|ud|r ord|rarces re|al|r lo l|re reu|al|ors.
Structural Surveys
Jores Lar La3a||e does rol carry oul a slruclura| survey, ror do We lesl l|e serv|ces. w|||sl ary
delecls or |lers ol d|srepa|r W||c| We role dur|r l|e course ol l|e |rspecl|or W||| oe roled |r our
va|ual|or reporl, Jores Lar La3a||e |s rol ao|e lo |ve ary assurarce l|al ary properly |s lree lror
delecl.
Deleterious Materials
Jores Lar La3a||e does rol rorra||y carry oul |rvesl|al|ors or s|le lo ascerla|r W|el|er ary ou||d|r
Was corslrucled or a|lered us|r de|eler|ous raler|a|s (e. asoeslos). ur|ess We are ol|erW|se
|rlorred, our va|ual|ors are or l|e oas|s l|al ro suc| raler|a|s |ave oeer used.
Site Conditions
Jores Lar La3a||e does rol carry oul |rvesl|al|ors or s|le |r order lo delerr|re l|e su|lao|||ly ol
rourd cord|l|ors, ard l|e serv|ces, lor ary reW deve|oprerl. ur|ess ol|erW|se |rlorred, our
va|ual|ors are or l|e oas|s l|al l|ese aspecls are sal|slaclory ard l|al W|ere deve|oprerl |s proposed,
ro exlraord|rary experses or de|ays W||| oe |rcurred dur|r l|e corslrucl|or per|od.
Properties as Trading Businesses
Properl|es suc| as |ole|s, W|ere l|e p|ys|ca| ex|slerce ol l|e rea| eslale |s recessary lor l|e corducl
ol l|e ous|ress, are va|ued as a lu||y operal|ora| ous|ress, e|l|er as a 'o|r corcerr W|l| vacarl
possess|or or suojecl lo raraererl areererl as appropr|ale |oWever or a vacarl possess|or ol
l|e proposed Vasler Lease Areererl.
0ur va|ual|ors assure l|e properly |as l|e oerel|l ol a||-recessary ||cerces ard l|re cerl|l|cales, ur|ess
slaled lo l|e corlrary. ll |s lurl|er assured l|al a prospecl|ve purc|aser W||| rorra||y erae l|e
ex|sl|r slall ard sorel|res raraererl ard Wou|d expecl lo la|e over l|e oerel|l ol lulure ooo||rs.
we do rol la|e ar |rverlory or separale|y assess l|e va|ue ol lurr|lure, l|ll|rs ard equ|prerl oul car
arrare lor suc| serv|ce lo oe prov|ded. Jores Lar La3a||e presures a|| l|ese |lers are oWred oy l|e
propr|elor ol l|e ous|ress ur|ess ol|erW|se |rlorred. T|ose |lers ||red or |eased are presured lo oe
sull|c|erl|y secured oy appropr|ale docurerlal|or ard ao|e lo oe lrarslerred W|l|oul pera|ly.
Appendix II Standard Terms & Conditions Adopted in the Preparation of Valuations Page 2
D-72
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
No a||oWarce |s rade lor ary corl|rerl lax ||ao|||l|es lo slall.
Lease and Title Searches
Jores Lar La3a||e does rol rorra||y |rspecl a|| |eases or dea||rs or l|l|e. w|ere l||s Wou|d oe
requ|red lor l|e purpose ol l|e va|ual|or, We recorrerd l|al |aWyers' adv|ce oe oola|red. Jores Lar
La3a||e assures, ur|ess |rlorred lo l|e corlrary, l|al a|| docurerlal|or |s sal|slaclor||y draWr ard l|al
l|ere are ro ercurorarces, reslr|cl|ors, easererls or ol|er |ssues ol ar orerous ralure W||c| Wou|d
|ave ar allecl or l|e va|ue ol l|e |rleresl urder cors|deral|or.
Erqu|r|es as lo l|e l|rarc|a| slard|r ol aclua| |essees or prospecl|ve lerarls are rol rorra||y rade
ur|ess spec|l|ca||y requesled. w|ere properl|es are va|ued W|l| l|e oerel|l ol |ell|rs, |l |s l|erelore
assured l|al l|e lerarls are capao|e ol reel|r l|e|r oo||al|ors urder l|e |ease ard l|al l|ere are ro
arrears ol rerl or urd|sc|osed oreac|es ol coverarls.
Land Boundaries
T|e va|ual|or |s rade or l|e oas|s l|al l|ere are ro ercroac|rerls upor or oy l|e suojecl properly,
|oWever, s|ou|d corl|rral|or ol l||s oe requ|red l|e serv|ces ol a Corsu|l|r 3urveyor s|ou|d oe
eraed.
Sub-Contracting
Jores Lar La3a||e s|a|| |ave l|e r||l lo suo-corlracl l|e perlorrarce ol a|| or parl ol l|e 3erv|ces
lror l|re lo l|re. 3|ou|d l||s occur, Jores Lar La3a||e W||| reverl|e|ess ard ur|ess ol|erW|se
spec|l|ca||y areed, rera|r respors|o|e lo l|e C||erl lor l|e due ard proper perlorrarce ol l|e 3erv|ces.
Information provided by Client
T|e C||erl s|a|| prov|de lo Jores Lar La3a||e a|| |rlorral|or as |s recessary or reasorao|y requesled
|r order lo erao|e us lo proper|y perlorr l|e serv|ces.
T|e C||erl accepls l|al Jores Lar La3a||e |s erl|l|ed lo re|y or l|e accuracy, sull|c|ercy ard
cors|slercy ol ary ard a|| |rlorral|or supp||ed oy l|e C||erl. Jores Lar La3a||e accepls ro ||ao|||ly lor
ary |raccurac|es corla|red |r |rlorral|or d|sc|osed oy l|e C||erl, W|el|er prepared oy l|e C||erl or oy
a l||rd parly ard W|el|er or rol supp||ed d|recl|y lo us oy l|al l||rd parly.
Excepl W|ere requ|red oy |aW or oy ary proper aul|or|ly, a|| corl|derl|a| |rlorral|or prov|ded oy l|e
C||erl s|a||, excepl W|l| l|e pr|or Wr|ller corserl ol l|e C||erl, oe |epl corl|derl|a| oy Jores Lar
La3a||e.
A|| corl|derl|a| |rlorral|or prov|ded oy l|e C||erl W||| oe relurred, deslroyed or erased upor l|e C||erl's
requesl, save l|al Jores Lar La3a||e reserves l|e r||l lo rela|r ore copy ol l|e corl|derl|a|
|rlorral|or lor l|e purposes or|y ol corp||arce W|l| ary proless|ora|, |ea| or reu|alory requ|rererls
or oo||al|ors (suojecl a|Ways lo |ls corl|ru|r duly lo lreal suc| |rlorral|or as corl|derl|a|).
Information provided by Jones Lang LaSalle
Copyr||l |r a|| raler|a| ol W|alever ralure prepared oy Jores Lar La3a||e ard prov|ded lo l|e C||erl
or ol|erW|se ereraled |r l|e course ol carry|r oul l|e 3erv|ces s|a|| rera|r l|e properly ol Jores
Lar La3a||e. No parl ol ary reporl, docurerl or puo||cal|or ray oe reproduced or lrarsr|lled or
d|sc|osed |r ary lorr or oy ary rears, or slored |r ary dalaoase or relr|eva| sysler ol ary ralure,
W|l|oul pr|or Wr|ller perr|ss|or ol Jores Lar La3a||e.
Appendix II Standard Terms & Conditions Adopted in the Preparation of Valuations Page 3
D-73
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
A|| |rlorral|or ard adv|ce rade ava||ao|e oy Jores Lar La3a||e lo l|e C||erl |s lor l|e so|e use ol l|e
C||erl lor l|e so|e purpose lor W||c| |l Was prepared.
Third Party Liability
T|e C||erl ac|roW|edes l|al, save |r respecl ol Jores Lar La3a||e's' oWr suo-corlraclors, Jores
Lar La3a||e does rol Warrarl l|e perlorrarce, Wor| or l|e producls ol ol|ers ard s|a|| rol |o|d Jores
Lar La3a||e respors|o|e lor l|e |rspecl|or or superv|s|or ol l|e execul|or ol suc| perlorrarce, Wor|
or producls. T||s prov|s|or |s rol aoaled W|ere, |r l|e perlorrarce ol |ls 3erv|ces, exposure ol Jores
Lar La3a||e lo l|e perlorrarce, Wor| or producls ol ol|ers |s |rc|derla| ard/or |rev|lao|e.
Ne|l|er l|e adv|ce ol Jores Lar La3a||e ror ary ol l|e serv|ces prov|ded pursuarl lo l|e lrslrucl|or
are |rlerded, e|l|er express|y or oy |rp||cal|or, lo corler ary oerel|l or ary l||rd parly (ol|er l|ar a
l|rarc|er W|o |s ror|raled lo us |r Wr|l|r) ard l|e ||ao|||ly ol Jores Lar La3a||e lo ary l||rd parly |s
express|y d|sc|a|red.
Delay
Jores Lar La3a||e s|a|| rol oe respors|o|e lor ary de|ay lo l|e perlorrarce ol l|e 3erv|ces, W|ere
rallers oeyord Jores Lar La3a||e's' corlro| cause suc| de|ay.
Payment of Fees, Expenses and Disbursements
Payrerl ol l|e lees lor l|e 3erv|ces s|a|| oe ca|cu|aled, c|ared ard rade as sel oul |r l|e allac|ed
proposa| or ary var|al|or l|erelo areed oy l|e C||erl ard Jores Lar La3a||e.
T|e C||erl s|a|| pay l|e experses ol ard re|rourse l|e d|soursererls |rcurred or |ls oe|a|l oy Jores
Lar La3a||e as spec|l|ed |r l|e allac|ed proposa|
A|| relererces lo lees, experses ard d|soursererls are exc|us|ve ol ary app||cao|e overrrerl laxes.
Ary suc| laxes c|areao|e or Jores Lar La3a||e's' lees experses ard d|soursererls s|a|| oe pa|d
oy l|e C||erl.
w|ere lor ary reasor Jores Lar La3a||e prov|des or|y parl ol l|e serv|ces as spec|l|ed |r l|e allac|ed
proposa|. Jores Lar La3a||e s|a|| oe erl|l|ed lo lees proporl|orale lo l|ose sel oul |r l|e allac|ed
proposa| l|al apporl|ored, oased or our esl|rale ol l|e percerlae ol corp|el|or.
lr l|e everl l|al |rvo|ces are rol sell|ed |r lu|| W|l||r 28 days ol suor|ss|or, Jores Lar La3a||e
reserves l|e r||l lo W|l|draW respors|o|||ly lor Wor| perlorred.
Termination
lr l|e everl l|al e|l|er parly |s |r raler|a| or pers|slerl oreac| ol ary ol l|e lerrs ol l|e lrslrucl|or, l|e
ol|er parly ray lerr|rale l|e |rslrucl|or |l, upor l|e exp|ry ol 11 days aller serv|r rol|ce or l|e parly
|r delau|l, sleps |ave rol oeer la|er lo reredy l|e oreac|.
0r lerr|ral|or ol l|e lrslrucl|or, Jores Lar La3a||e s|a|| oe erl|l|ed lo, ard s|a|| oe pa|d, lees lor a||
3erv|ces prov|ded lo l|al l|re, |r accordarce W|l| l|e aoove c|ause.
Appendix II Standard Terms & Conditions Adopted in the Preparation of Valuations Page 4
D-74
L|ao|||ly ||r|led oy a sc|ere approved urder Proless|ora| 3lardards Le|s|al|or
Liability
Jores Lar La3a||e's ||ao|||ly |s ||r|led oy a sc|ere approved urder Proless|ora| 3lardards
Le|s|al|or. Jores Lar La3a||e's' ||ao|||ly lo l|e C||erl lor |oss or darae s|a|| oe ||r|led lo suc| sur
as Jores Lar La3a||e ou|l reasorao|y lo pay |av|r reard lo |ls d|recl respors|o|||ly lor l|e sare
ard or l|e oas|s l|al a|| ol|er l||rd parl|es s|a||, W|ere rela|red oy l|e C||erl, oe deered lo |ave
prov|ded lo l|e C||erl corlraclua| urderla||rs |r lerrs ro |ess orerous l|ar l||s C|ause |r respecl ol
l|e perlorrarce ol l|e|r serv|ces |r correcl|or W|l| l|e Projecl, ard s|a|| oe deered lo |ave pa|d lo
l|e C||erl suc| proporl|or as ray oe jusl ard equ|lao|e |av|r reard lo l|e exlerl ol l|e|r respors|o|||ly
lor suc| |oss or darae.
ur|ess ol|erW|se areed, l|e ||ao|||ly ol Jores Lar La3a||e's' lo l|e C||erl lor |oss or darae c|a|red
|r respecl ol ary lrslrucl|or s|a||, rolW|l|slard|r l|e prov|s|ors ol l|e pararap| aoove, |r ary everl
oe ||r|led lo ar areale sur rol exceed|r our lola| lees prov|ded lor |r l||s rardale.
ur|ess ard lo l|e exlerl l|al l|ey |ave oeer l|ra||y ard jud|c|a||y delerr|red lo |ave oeer caused oy
lraud, W||lu| delau|l or re||erce ol Jores Lar La3a||e, l|e C||erl arees lo |rderr|ly or derard ard
|o|d |arr|ess Jores Lar La3a||e aa|rsl a|| acl|ors, c|a|rs, proceed|rs, |osses, daraes, cosls ard
experses W|alsoever ard |oWsoever ar|s|r lror or |r ary Way correcled W|l| l|e |rslrucl|or or l|e
prov|s|or ol 3erv|ces l|ereurder.
ur|ess ard url|| ary suc| areererl |s reac|ed ard recorded |r Wr|l|r, Jores Lar La3a||e W||| accepl
ro respors|o|||ly or oWe ro dul|es lo l|e C||erl W||c| re|ale lo rallers oeyord l|e scope ol l|e 3erv|ces.
Copyright Jones Lang LaSalle
Appendix II Standard Terms & Conditions Adopted in the Preparation of Valuations Page 5
E-1
lrdeperderl lole| ard 3erv|ced Aparlrerl
Var|el lrduslry Correrlar|es
Vay 2011
Prepared lor:
Frasers hosp|ta||ty Asset Hanagement Pte. Ltd.
(as manager of Frasers hosp|ta||ty Rea| Estate |nvestment Trust}
138 A|exardra Road
#21-00 A|exardra Po|rl
3|rgapore 119958
The Trust 6ompany (As|a} L|m|ted
(as trustee of Frasers hosp|ta||ty Rea| Estate |nvestment Trust}
8 Var|ra 8ou|evard
#05-02 Var|ra 8ay F|rarc|a| Cerlre
3|rgapore 018981
Frasers hosp|ta||ty Trust Hanagement Pte. Ltd.
(as trustee-manager of Frasers hosp|ta||ty us|ness Trust}
138 A|exardra Road
#21-00 A|exardra Po|rl
3|rgapore 119958
Prepared 8y:
Jones Lang La8a||e Property 6onsu|tants Pte Ltd
Jones Lang La8a||e [ hote|s & hosp|ta||ty Croup
CEA L|cerce No. L300Z32E
9 Rall|es P|ace
#38-01 Repuo||c P|aza
3|rgapore 01819
APPENDIX E
INDEPENDENT HOSPITALITY INDUSTRY REPORT
E-2
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 2
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Corlerls
1 lrlroducl|or ............................................................................................................................................. 1
1.1 C||erl 8r|el ......................................................................................................................................... 1
1.2 3lalererl ol Assurpl|ors ard L|r|l|rg Cord|l|ors ........................................................................ 5
2 As|a Pac|l|c Var|el 0verv|eW ................................................................................................................
2.1 Trad|rg 0ul|oo| & Var|el 3erl|rerl ...............................................................................................
2.2 lole| lrveslrerl 0ul|oo| .................................................................................................................. Z
3 3|rgapore Var|el 0verv|eW .................................................................................................................. 9
3.1 Execul|ve 3urrary .......................................................................................................................... 9
3.2 3|rgapore Ecoror|c Var|el 0verv|eW ............................................................................................ 9
3.3 Tour|sr 0verv|eW............................................................................................................................ 10
3.1 Accorrodal|or Var|el 0verv|eW .................................................................................................. 11
3.5 lrveslrerl Var|el ........................................................................................................................... 18
3. Var|el 0ul|oo| ................................................................................................................................ 19
3.Z lrlerCorl|rerla| 3|rgapore ............................................................................................................. 20
3.8 Fraser 3u|les 3|rgapore ................................................................................................................. 23
1 Kua|a Lurpur Var|el 0verv|eW .......................................................................................................... 2Z
1.1 Execul|ve 3urrary ........................................................................................................................ 2Z
1.2 Va|ays|a Ecoror|c Var|el 0verv|eW ............................................................................................ 2Z
1.3 Tour|sr 0verv|eW............................................................................................................................ 28
1.1 Accorrodal|or Var|el 0verv|eW .................................................................................................. 31
1.5 lrveslrerl Var|el ........................................................................................................................... 33
1. Var|el 0ul|oo| ................................................................................................................................ 33
1.Z Tre wesl|r Kua|a Lurpur .............................................................................................................. 31
5 Kooe Var|el 0verv|eW ........................................................................................................................ 3Z
5.1 Execul|ve 3urrary ........................................................................................................................ 3Z
5.2 Japar Ecoror|c Var|el 0verv|eW ................................................................................................. 3Z
5.3 Tour|sr 0verv|eW............................................................................................................................ 38
5.1 Accorrodal|or Var|el 0verv|eW .................................................................................................. 11
5.5 lrveslrerl Var|el ........................................................................................................................... 11
5. Var|el 0ul|oo| ................................................................................................................................ 11
5.Z ANA CroWre P|aza Kooe ................................................................................................................ 15
3ydrey Var|el 0verv|eW..................................................................................................................... 18
.1 Execul|ve 3urrary ........................................................................................................................ 18
.2 Auslra||a Ecoror|c Var|el 0verv|eW ............................................................................................ 18
.3 Tour|sr 0verv|eW............................................................................................................................ 19
.1 Accorrodal|or Var|el 0verv|eW .................................................................................................. 51
.5 lrveslrerl Var|el ........................................................................................................................... 5Z
. Var|el 0ul|oo| ................................................................................................................................ 5Z
.Z Fraser 3u|les 3ydrey ...................................................................................................................... 58
.8 Novole| Roc|lord 0ar||rg laroour ................................................................................................. 1
E-3
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 3
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Z Lordor Var|el 0verv|eW..................................................................................................................... 5
Z.1 Execul|ve 3urrary ........................................................................................................................ 5
Z.2 ur|led K|rgdor Ecoror|c Var|el 0verv|eW ................................................................................ 5
Z.3 Tour|sr 0verv|eW............................................................................................................................ Z
Z.1 Accorrodal|or Var|el 0verv|eW .................................................................................................. Z0
Z.5 lrveslrerl Var|el ........................................................................................................................... Z
Z. Var|el 0ul|oo| ................................................................................................................................ ZZ
Z.Z Par| lrlerral|ora| lole|................................................................................................................... Z8
Z.8 8esl weslerr Tre CrorWe|| ........................................................................................................... 80
Z.9 Fraser P|ace Carary wrarl ............................................................................................................ 83
Z.10 Fraser 3u|les 0ueers 0ale ............................................................................................................ 85
8 0|asgoW Var|el 0verv|eW .................................................................................................................. 88
8.1 Execul|ve 3urrary ........................................................................................................................ 88
8.2 Tour|sr 0verv|eW............................................................................................................................ 88
8.3 Accorrodal|or Var|el 0verv|eW .................................................................................................. 91
8.1 lrveslrerl Var|el ........................................................................................................................... 98
8.5 Var|el 0ul|oo| ................................................................................................................................ 98
8. Fraser 3u|les 0|asgoW .................................................................................................................... 99
9 Ed|rourgr Var|el 0verv|eW .............................................................................................................. 102
9.1 Execul|ve 3urrary ...................................................................................................................... 102
9.2 Tour|sr 0verv|eW.......................................................................................................................... 103
9.3 Accorrodal|or Var|el 0verv|eW ................................................................................................ 10
9.1 lrveslrerl Var|el ......................................................................................................................... 110
9.5 Var|el 0ul|oo| .............................................................................................................................. 110
9. Fraser 3u|les Ed|rourgr ............................................................................................................... 111
APPEN0lX 1 - Vaps ol Loca||l|es ol C||erl's lole| ard 3erv|ced Aparlrerl Porllo||o
E-4
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
1 Introduction
1.1 6||ent r|ef
Tr|s reporl ras oeer prepared |r resporse lo |rslrucl|ors daled 15 0clooer 2013 ard suosequerl|y updale
|rslrucl|ors or 2Z Vay 2011 rece|ved lror Frasers Cerlrepo|rl Lld requesl|rg Jores Larg La3a||e
Properly Corsu|larls Ple Lld / Jores Larg La3a||e lole|s & losp|la||ly 0roup ('JLL) lo corp|ele
lrdeperderl Var|el lrduslry Correrlar|es or lre rosp|la||ly seclors |r sever rar|els |r As|a Pac|l|c ard
lre ur|led K|rgdor. Tre reporl Was de||vered lo Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre
Trusl Corpary (As|a) L|r|led ard Frasers losp|la||ly Trusl Varagererl Ple. Lld. (lre 'C||erl).
Tre ||sl ol c|l|es ard properl|es ('Ass|grrerl) lo oe covered |s as lo||oWs:
A8|A
No. 6|ty Name of Property
8|ngapore
1 3|rgapore lrlerCorl|rerla| 3|rgapore
2 3|rgapore Fraser 3u|les 3|rgapore
Ha|ays|a
3
Kua|a Lurpur Tre wesl|r Kua|a Lurpur
Japan
1
Kooe ANA CroWre P|aza Kooe
AU8TRAL|A
No. 6|ty Name of Property
1 3ydrey Fraser 3u|les 3ydrey
2 3ydrey Novole| Roc|lord 0ar||rg laroour
UN|TE0 K|NC00H
No. 6|ty Name of Property
1 Lordor Par| lrlerral|ora| lole|
2 Lordor 8esl weslerr Tre CrorWe||
3 Lordor Fraser P|ace Carary wrarl
1 Lordor Fraser 3u|les 0ueers 0ale
5 0|asgoW Fraser 3u|les 0|asgoW
Ed|rourgr Fraser 3u|les Ed|rourgr
Tre ass|grrerl ras oeer urderla|er |r co||aooral|or W|lr our reg|ora| role| operal|ves |r Japar, Auslra||a
ard lre ur|led K|rgdor.
E-5
E-6
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
2 Asia Pacific Market Overview
2.1 Trad|ng 0ut|ook & Harket 8ent|ment
Accord|rg lo JLL's Vay 2011 lole| lrveslor 3erl|rerl 3urvey, |rveslor expeclal|ors lor lrad|rg across
As|a Pac|l|c |rcreased s|gr|l|carl|y over lre pasl s|x rorlrs. 3erl|rerl lor srorl lerr lrad|rg calapu|led
2.3 po|rls corpared lo our Noveroer 2013 survey lo 51.8 ard red|ur lerr expeclal|ors rose 13.Z
po|rls lo 51.2.
lrprovererls |r lre g|ooa| ecorory, ourgeor|rg lrave| rar|els ard a roderal|or |r As|ar deve|oprerl
projecls are urderp|rr|rg lr|s sr|ll |r serl|rerl. As a resu|l, lrad|rg perlorrarce expeclal|ors lor oolr lre
srorl ard red|ur lerr are roW al lre r|gresl |eve| s|rce 200Z. Tr|s prov|des a c|ear s|gra| lral |rveslors
oe||eve lre lrouo|ed days ol lre g|ooa| l|rarc|a| cr|s|s are roW oer|rd us.
Ecoror|c acl|v|ly across As|a Pac|l|c lurlrer |rproved |r lre secord ra|l ol 2013 roWever, groWlr |s
expecled lo acce|erale rodesl|y lo aooul 5.5 |r oolr 2011 ard 2015, supporled oy rore corpel|l|ve
excrarge rales |r sore cases as We|| as slrorg |aoour rar|els ard sl|||-ouoyarl cred|l groWlr. 8y
corlrasl, As|a Pac|l|c's role| deve|oprerl supp|y |rcreases are projecled lo average 5.1 per arrur over
lre sare per|od W|lr corrercererls rav|rg s|oWed across lre reg|or.
lr lre srorl lerr, a cra||erge lor rary As|ar ecoror|es resls W|lr darag|rg po||l|ca| serl|rerl. 3|rce lre
arry se|zed corlro| ol Tra||ard |r Vay 2011, rore lrar u30 15 o||||or ol p|arred |rveslrerls rave oeer
pul or ro|d, ard a srarp la|| |r 00P |s roW lorecasl. lrdores|a corl|rues lo oe cra||erged oy a corp|ex
po||l|ca| sysler ard r|gr |rc|derce ol corrupl|or rear|rg lre |ac| ol po||l|ca| corsersus r|s|s ro|d|rg oac|
ecoror|c progress over lre red|ur lerr. Corverse|y, v|elrar's groWlr prospecls rave deler|oraled
s||grl|y due lo a rore caul|ous oul|oo| lor |rlra-As|ar lrade ard rereWed lerr|lor|a| d|spules W|lr Va|r|ard
Cr|ra.
As|a Pac|f|c Trad|ng Performance Expectat|ons 2000 to 2014^
Nole: * we|grled oy ruroer ol resporses
3ource: JLL
-0
-10
-20
0
20
10
0
80
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e
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-
0
0
0
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-
0
0
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-
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E-7
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
2.2 hote| |nvestment 0ut|ook
lole| lrarsacl|ora| acl|v|ly surged |r 2013, |rcreas|rg a|rosl 200 lo jusl aoove u30 9.5 o||||or, as
|rveslor corl|derce relurred lo pre-g|ooa| l|rarc|a| cr|s|s |eve|s. 3lrorg |rveslor serl|rerl ard |rporlarl|y,
lre ava||ao|||ly ol qua||ly role| assels (parl|cu|ar|y |r 3|rgapore ard To|yo), Were |ey reasors oer|rd lre
|rpress|ve resu|l. Auslra|as|ar lrarsacl|ors greW oy a respeclao|e 110 ouoyed oy |ardrar| role| dea|s
|r 3ydrey ard lre Tour|sr Assel lo|d|rgs porllo||o sa|e lo lre Aou 0rao| lrveslrerl Aulror|ly.
As|a Pac|f|c hote| Transact|on Vo|ume 2008 to 2013
3ource: JLL
Trrougroul As|a Pac|l|c, Va|r|ard Cr|ra, Japar, 3|rgapore ard Auslra||a dor|raled dea| l|oW W|lr a|| lour
courlr|es record|rg lre r|gresl arrua| vo|ure |r lre posl-cr|s|s era, oul W|lr assel sa|es occurr|rg |r rary
courlr|es across lre reg|or. 0vera||, 2013 represerled lre secord r|gresl year ol lrarsacl|ors or record,
lo||oW|rg 200Z.
0esp|le |rveslors rav|rg access lo creaper deol ard sources ol equ|ly, lre or|y drag or lre As|a Pac|l|c
role| |rveslrerl rar|el |r 2013 Was a |ac| ol ava||ao|e sloc| W|lr sore se||ers re|uclarl lo re||rqu|sr
assels |r a gerera||y r|s|rg rar|el ol Wr|cr We expecl lo see repealed |r 2011. 0l lre role|s lral d|d
lrarsacl, se||ers re|d l|rr Wr||sl ouyers roved lo reel rar|el expeclal|ors.
As|a Pac|l|c role| lrarsacl|or vo|ure |s projecled lo roderale |r 2011 lo arourd u30 .0 o||||or. ll |s
expecled lral leWer |ardrar| dea|s W||| cause a reducl|or |r overa|| sa|es vo|ures, Wr||e dea| l|oW rera|rs
ouoyarl W|lr a grealer deplr ol sra|| assel sa|es. Tre average s|rg|e assel s|ze W||| lrerelore reduce lo
lre |org lerr lrerd. l|grer vo|ures W||| a|so oe re|d oac| oy a |ac| ol |rveslrerl opporlur|l|es ard
porllo||o lrarsacl|ors.
Trree reW role| ard rosp|la||ly RElTs ||sled |r As|a |r 2013, |rc|ud|rg lre l|rsl |r Va|r|ard Cr|ra, or|rg|rg
lre lola| lo 11 |r lre reg|or. As|ar RElTs are gerera||y allacred lo a lar||y corpary or sporsor, re|uclarl
lo surrerder corlro|, ard |l |s oller lr|s re|al|orsr|p Wr|cr d|clales ||sl|rg success. Tr|s lrerelore
represerls qu|le a d|llererl slruclure lo Auslra||a ard lre ur|led 3lales ol Arer|ca (u3A). For Va|r|ard
Cr|rese |rveslors, lre lavoured roule ras oeer ar lr|l|a| Puo||c 0ller|rg (lP0) ||sl|rg |r lorg Korg,
erao||rg grealer lreedor lor lre rovererl ol cap|la| across lre g|ooe.
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E-8
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 8
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
wr||e rore groups are cors|der|rg rorel|s|rg porllo||os lrrougr lre puo||c rar|els, ary crarge |r lre
ecoror|c lurdarerla|s cou|d see lre erv|rorrerl sr|ll, parl|cu|ar|y Wr||e quarl|lal|ve eas|rg |oors.
0|vers|l|cal|or W||| oe lre |ey, ||r|l|rg exposure lo ary ore segrerl or geograpry.
As|a Pac|f|c hote| Transact|on Vo|ume 1998 to 2014F
3ource: JLL
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E-9
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 9
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
3 Singapore Market Overview
3.1 Execut|ve 8ummary
3|rgapore |s a r|gr|y |rduslr|a||zed ecorory reroWred lor |ls slrorg ecoror|c lurdarerla|s ard pruderl
racroecoror|c po||c|es. Tre c|ly |s a |ey l|rarc|a|, rarulaclur|rg ard serv|ces ruo |r As|a. l|slor|ca||y,
lre goverrrerl ras acl|ve|y We|cored lore|gr |rveslrerl ard |r|ed o||alera|-lrade dea|s W|lr lre u3A,
Auslra||a, Japar, NeW Zea|ard ard lrd|a, arorg olrer courlr|es. As a |ey correrc|a| ruo |r As|a, lre
c|ly allracls oolr g|ooa| ard reg|ora| corporale lour|sr.
3|rgapore ras corl|ruous|y |rproved or |ls lour|sr oller|rg, allracl|rg rary |e|sure v|s|lors. NeW lour|sl
allracl|ors deve|oped over lre pasl leW years |rc|ude lre 3|rgapore F|yer, lre Arl3c|erce Vuseur,
0arders oy lre 8ay, R|ver 3alar| ard lre lWo |rlegraled resorls - Var|ra 8ay 3ards ard Resorls wor|d
3erlosa. 3|rgapore ras slaged severa| g|ooa| everls |rc|ud|rg lre |raugura| 3|rgapore 2010 Youlr
0|yrp|c 0ares, Forru|a 0re 3|rgTe| 3|rgapore 0rard Pr|x ard lre vo|vo 0cear Race. Tour|sl
allracl|ors |r lre p|pe||re |rc|ude lre 3|rgapore 3porls luo al Ka||arg (Jure 2011); lre Nal|ora| Arl
0a||ery (2015); ard lre deve|oprerl ol lre Jurorg La|e 0|slr|cl over lre rexl l|ve lo ler years.
3|rgapore's role| |rverlory corpr|sed a lola| ol 51,92 gazelled ard ror-gazelled roors |r 2013
accord|rg lo lre 3T8. Approx|rale|y 3,310 roors opered dur|rg lre year, record|rg groWlr ol .5 over
2012. A rajor|ly ol lre role| oper|rgs Were |r lre upsca|e ard r|dsca|e seclors.
8elWeer 2009 ard 2013, lre |uxury role| rar|el |r 3|rgapore ras recorded a s|gr|l|carl |rprovererl |r
lrad|rg perlorrarce. 0ur|rg lr|s per|od, Average 0a||y Rales (A0R) sroWed a corpourd arrua| groWlr
rale (CA0R) ol 8.1, |rcreas|rg lror 300 311 |r 2009 lo 300 131 |r 2013, correspord|rg lo ar |rcrease
|r occuparcy |eve|s lror Z.5 |r 2009 lo 85.1 |r 2013. Tr|s Was due lo a reoourd ol corporale ard
Veel|rgs, lrcerl|ves, Corverl|ors ard Exr|o|l|ors (VlCE) derard lo||oW|rg lre 0|ooa| F|rarc|a| Cr|s|s
ard severa| reW everls Wr|cr lurlrer drove |e|sure derard.
3.2 8|ngapore Econom|c Harket 0verv|ew
8|ngapore: Econom|c |nd|cators
2010 2011 2012 2013 2014F 2015F 201F
Rea| 00P groWlr () 15.0 .00 1.90 1.01 3.1 3.52 3.81
00P (u30 o||||ors, PPP) 2Z.8 283.91 289.33 301.02 311.90 322.89 335.18
00P Per Cap|la (u30, PPP) 52,Z0 51,ZZ1 51,12 55,Z1Z 5,989 58,21 59,12
Corsurer Pr|ce lrdex ( crarge) 2.82 5.25 1.58 2.3 2.92 2.93 2.29
Excrarge Rale (LCu / u30) 1.29 1.30 1.22 1.2Z 1.25 1.25 1.25
urerp|oyrerl Rale () 2.18 2.03 1.93 1.90 1.90 1.83 1.82
Popu|al|or (r||||or) 5.08 5.18 5.31 5.10 5.1Z 5.55 5.2
3ource: 0xlord Ecoror|cs, F= Forecasl
lr 2013, 3|rgapore's ecorory recorded a 1.1 groWlr, exceed|rg V|r|slry ol Trade ard lrduslry's (VTl)
groWlr lorecasls ol 3.5 lo 1.0, ard douo||rg lre 1.9 groWlr reg|slered |r 2012. Tre slrorg
perlorrarce |r 2013 Was urderp|rred oy lre l|rarce ard |rsurarce, ard Wro|esa|e ard rela|| lrade
seclors, Wr|cr recorded roousl groWlr ol 10. ard 5.0 respecl|ve|y. 3|rgapore's ecorory corl|rued
E-10
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 10
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
or lre groWlr lrajeclory |r ear|y 2011, reg|sler|rg a 1.9 year-or-year (y-o-y) |rcrease |r 01 2011,
accord|rg lo VTl.
3|rgapore's ecorory |s expecled lo groW roderale|y oy 2 lo 1 |r 2011, accord|rg lo lorecasls
arrourced oy lre VTl. Ecoror|c expars|or |s expecled lo corl|rue or lre oac| ol lre recovery |r
exlerra||y-or|erled seclors sucr as rarulaclur|rg ard Wro|esa|e lrade, |r larder W|lr lre recovery |r
g|ooa| derard. 0oresl|c derard |s a|so expecled lo slay res|||erl. loWever, overa|| groWlr ray oe
capped oy supp|y-s|de corslra|rls, parl|cu|ar|y |r lre l|grl |aoour rar|el.
Tre cerlra| oar|'s po||cy lrareWor| locuses or rarag|rg lre excrarge rale, a|red pr|rar||y al prorol|rg
pr|ce slao|||ly as lre oas|s ol susla|rao|e ecoror|c groWlr. 3|rce 1981, |l ras used lre 3|rgapore 0o||ar's
excrarge rale aga|rsl ar urd|sc|osed lrade-We|grled oas|el ol currerc|es ralrer lrar |rleresl rales lo
supporl ecoror|c groWlr Wr||e ra|rla|r|rg doresl|c pr|ce slao|||ly. Tre Vorelary Aulror|ly ol 3|rgapore
(VA3) gu|des lre excrarge rale lo apprec|ale or deprec|ale deperd|rg pr|rar||y or Wrelrer expecled
|rl|al|orary pressures are slrorg or Wea|.
Tre VA3 ra|rla|red |ls l|grl rorelary po||cy slarce al lre 0clooer 2013 ard Apr|| 2011 reel|rgs. Tr|s
slarce, |rp|y|rg a rodesl ard gradua| apprec|al|or ol lre 3|rgaporear 0o||ar |s expecled lo corl|rue lor
lre resl ol 2011. Tr|s W||| corla|r doresl|c ard |rporled sources ol |rl|al|or, as We|| as ersure red|ur-
lerr pr|ce slao|||ly lor susla|rao|e groWlr. Tre currercy currerl|y slards al 300 1.2 per u30 1.00 as al
erd Apr|| 2011, oased or dala re|eased oy VA3. lr lre red|ur lerr, lre slrerglr ol ecoror|c
lurdarerla|s ard lre pos|l|ve lrade oa|arces rear lre 3|rgapore 0o||ar |s |||e|y lo rera|r al a slrorger
|eve| re|al|ve lo olrer As|ar currerc|es.
3.3 Tour|sm 0verv|ew
v|s|ror /rr|va|s
lr 2013, lola| |rlerral|ora| v|s|lor arr|va|s lo 3|rgapore recorded 15. r||||or, acr|ev|rg a Z.1 y-o-y
groWlr rale over 2012, accord|rg lo lre 3|rgapore Tour|sr 8oard (3T8). Tr|s exceeded lre lorecasls sel
|r 2013, Wr|cr largeled 11.8 lo 15.5 r||||or arr|va|s. Tour|sr rece|pls Were recorded al 300 23.5 o||||or |r
2013, reel|rg 3T8's lorecasl ol 300 23.5 lo 300 21.5 o||||or lor 2013.
Vov|rg lorWard, lre 3T8 |s lorecasl|rg v|s|lor arr|va|s lo rarge oelWeer 1.3 r||||or ard 1.8 r||||or |r
2011, represerl|rg a y-o-y |rcrease ol aooul 1.Z lo Z.9. Tre VTl expecls lre rexl prase ol lour|sr
groWlr lo core lrrougr |rcreas|rg v|s|lor sperd ralrer lrar v|s|lor ruroers. lr ||re W|lr lr|s, 3|rgapore |s
largel|rg r|grer-y|e|d|rg lour|sls lrrougr var|ous rar|el|rg |r|l|al|ves.
E-11
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 11
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
/verage lengrn ol $ra,
Accord|rg lo |alesl slal|sl|cs lror lre 3T8, approx|rale|y 21.1 ol v|s|lors slay lor |ess lrar ore day |r
3|rgapore, lo||oWed oy 20.0 Wro slay lor a s|rg|e day ard 1.9 Wro slay lor lWo days. Tre srorl
|erglr ol slay lor rajor|ly ol v|s|lors |rd|cales lral rary v|s|lors lrars|l lrrougr 3|rgapore g|ver lral
3|rgapore Crarg| A|rporl |s a rajor a|r ruo W|lr exlers|ve l||grl correcl|v|ly reg|ora||y ard g|ooa||y.
8elWeer 2008 ard 2012, lre average |erglr ol slay ras dec||red lror 1.0 lo 3.5 days. wr||e lre average
|erglr ol slay |s rol yel ava||ao|e lor 2013, a reducl|or over recerl years |s poss|o|y due lo lre pro||leral|or
ol lre |oW cosl carr|er |rduslry Wr|cr ras prov|ded rore allordao|e lrave| opl|ors W|lr|r lre reg|or. Tr|s
ras ercouraged repeal srorl-slay v|s|lal|or, espec|a||y lor reg|ora| lrave||ers.
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|nternat|ona| V|s|tor Arr|va|s to 8|ngapore - 2003 to YT0 Harch 2014
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr ()
3ource: 3|rgapore Tour|sr 8oard (3T8)
Nole: Varcr 2011 dala |s pre||r|rary
urder 1 day,
21.1
1 day, 20.0
2 days, 1.9
3 days, 11.8
1 days, Z.9
Vore lrar 5
days, 1.1
Lerglr ol 3lay |r 2012
3ource: 3|rgapore Tour|sr 8oard (3T8)
E-12
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 12
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$easona||r,
As 3|rgapore |s oolr a corporale ard |e|sure desl|ral|or W|lr cors|slerl Wealrer pallerrs lrrougroul lre
year, lrere are ro rajor l|uclual|ors |r v|s|lor arr|va|s.
Fror Vay lo Augusl, r|grer v|s|lal|or ruroers are recorded, co|rc|d|rg W|lr lre arrua| 0real 3|rgapore
3a|e, lre W|rler seasor |r Auslra||a ard lre surrer ro||days |r Europe ard lre u3A. 0clooer ard
Noveroer are lyp|ca||y slrorger corporale rorlrs. Lale Noveroer lo 0eceroer co|rc|des W|lr lre
reg|ora| year-erd scroo| ro||days ard Crr|slras / NeW Year lesl|ve ro||days Wr|cr usua||y draW rary
v|s|lors lo lre c|ly. Tre |u|| per|od |s gerera||y arourd lre Cr|rese NeW Year per|od |r Jaruary / Feoruary.
Seograpn|c Dr|g|n
0.0
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0.1
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1.0
1.2
1.1
1.
Jar Feo Var Apr Vay Jur Ju| Aug 3ep 0cl Nov 0ec
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3easora||ly - lrlerral|ora| v|s|lor Arr|va|s lo 3|rgapore
2008 2009 2010 2011 2012 2013 2011
3ource: 3|rgapore Tour|sr 8oard (3T8)
Nole: Varcr 2011 dala |s pre||r|rary
0.0
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Top 10 8ource Harkets (2012 - 2013}
2012 2013 3ource: 3|rgapore Tour|sr 8oard (3T8)
E-13
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 13
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
8ased or lre |alesl slal|sl|cs or geograpr|ca| source rar|els lror lre 3T8, as al erd ol 2013, lrdores|a
corl|rues lo oe 3|rgapore's lop source rar|el, W|lr v|s|lor arr|va|s reg|sler|rg ar |rcrease ol 8.9 over lre
prev|ous year. Va|r|ard Cr|ra recorded ar 11. groWlr |r 2013, ard Was lre secord |argesl source
rar|el lo 3|rgapore dur|rg lre year. Tre groWlr |r Va|r|ard Cr|rese v|s|lors Was roousl |r lre l|rsl lrree
quarlers ol 2013 due lo lre slrorg ouloourd Cr|rese v|s|lal|or ard lW|rr|rg lrall|c W|lr Va|ays|a. loWever,
lror 0clooer lo 0eceroer 2013, Va|r|ard Cr|rese v|s|lors sroWed a 30.8 y-o-y dec||re due lo lre
courlry's ausler|ly reasures or sperd|rg lror 0clooer 2013 orWards Wr|cr rad ar |rpacl or ouloourd
lrave| lror Va|r|ard Cr|ra.
0lrer rajor source rar|els lo 3|rgapore corpr|se ra|r|y ol As|a Pac|l|c courlr|es |rc|ud|rg Va|ays|a
(8.2), Auslra||a (Z.2), lrd|a (.0), Japar (5.3) ard lorg Korg (3.5). Trese rar|els rave sroWr
rea|lry y-o-y groWlr as al erd 2013.
0l lre rajor source rar|els, lorg Korg ard Japar recorded slrorg groWlr rales ol 11.3 ard 10.0 y-o-
y respecl|ve|y. NeW l||grls oelWeer lorg Korg ard 3|rgapore oy |oW cosl carr|ers sucr as 3cool
ercouraged v|s|lal|or. Ar |rcrease |r Japarese v|s|lors Was rel|ecl|ve ol a reoourd |r lour|sls lo 3|rgapore
aller lre 2011 earlrqua|e |r Japar ard orgo|rg po||l|ca| lers|ors oelWeer Japar ard Va|r|ard Cr|ra
Wr|cr ras resu|led |r sore Japarese v|s|lors croos|rg 3|rgapore as ar a|lerral|ve desl|ral|or dur|rg lre
year.
re, 0emano 0r|vers
Tre 3|rgapore goverrrerl rera|rs corr|lled lo supporl|rg lre |oca| lour|sr ard rosp|la||ly |rduslry lo
acr|eve |ls 2015 goa| ol 1Z r||||or v|s|lor arr|va|s, 300 30 o||||or |r lour|sl rece|pls ard lre creal|or ol ar
add|l|ora| 100,000 joos |r lre serv|ce seclor.
0ver lre pasl s|x years, s|rce lre 'Tour|sr 2015' p|ar Was pul |r p|ace, lre lour|sr |ardscape |r 3|rgapore
ras seer rary pos|l|ve crarges. NeW lour|sl allracl|ors rave oeer deve|oped across lre |s|ard c|ly
|rc|ud|rg lre 3|rgapore F|yer, lre Arl3c|erce Vuseur, 0arders oy lre 8ay ard lre lWo |rlegraled resorls
- Var|ra 8ay 3ards ard Resorls wor|d 3erlosa.
3|rgapore ras a|so slaged rary g|ooa| everls |r recerl years |rc|ud|rg lre |raugura| 3|rgapore 2010
Youlr 0|yrp|c 0ares, Forru|a 0re 3|rgTe| 3|rgapore 0rard Pr|x ard lre vo|vo 0cear Race. lr
3epleroer 2012, Forru|a 0re arrourced lral lrey W||| corl|rue lre 0rard Pr|x N|grl Race |r 3|rgapore
lor arolrer l|ve years. lr Apr|| 2013, a reW ralure lour|sr allracl|or, lre R|ver 3alar|, opered Wr|cr W|||
corp|ererl lre c|ly slale's currerl oller|rgs, |rc|ud|rg lre 3|rgapore Zoo, lre N|grl 3alar| ard Jurorg 8|rd
Par|.
Fulure lour|sl allracl|ors |rc|ude lre 3|rgapore 3porls luo al Ka||arg (Jure 2011); Vadare Tussauds
3|rgapore ard lre Tr|c|eye Vuseur |r 3erlosa (Jure 2011); lre Nal|ora| Arl 0a||ery (2015); ard lre
deve|oprerl ol lre Jurorg La|e 0|slr|cl over lre rexl l|ve lo ler years.
Corporale derard |r 3|rgapore |s |||e|y lo rera|r slao|e |r lre srorl lo red|ur lerr as 3|rgapore
rera|rs ore ol lre |ey ecoror|c ruos |r As|a Pac|l|c W|lr |ls pruderl ecoror|c po||c|es lral corl|rue lo
allracl lore|gr l|rrs ard |rveslors.
Accord|rg lo lre |alesl g|ooa| rar||rgs oy lre lrlerral|ora| Corgress ard Corverl|or Assoc|al|or (lCCA),
3|rgapore Was As|a's Top Corverl|or C|ly lor lre 12lr corsecul|ve year |r 2013, all|rr|rg lre c|ly's
pos|l|or as a VlCE desl|ral|or. lr 2013, 3|rgapore rosled a record ruroer ol 1Z5 lCCA everls,
reg|sler|rg a 1.Z |rprovererl lror 150 everls |r 2012 ard record|rg lre slrorgesl y-o-y |rcrease s|rce
E-14
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 11
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
2005. lr lre |org lerr, 3|rgapore |s sl||| po|sed lo corl|rue |ls slao|e groWlr as |l |s ao|e lo allracl r|gr
prol||e everls ard de|egales oeyord 3oulreasl As|a.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
3|rgapore's Crarg| A|rporl |s lre l|llr ous|esl a|rporl |r lre Wor|d oy |rlerral|ora| passergers rece|ved, ard
|s a rajor a|rporl ruo |r As|a. lr 2013, Crarg| A|rporl rece|ved 5Z.3 r||||or passergers. Tre a|rporl serves
rore lrar 100 |rlerral|ora| a|r||res Wr|cr l||es lo 2Z0 c|l|es |r approx|rale|y 0 courlr|es. lr 2012, lre
8udgel Terr|ra| Wr|cr prev|ous|y served |oW cosl carr|ers, c|osed lo ra|e Way lor lre corslrucl|or ol
Terr|ra| 1 Wr|cr W||| rave a passerger capac|ly ol 1 r||||or a year Wrer ready |r 201Z, or|rg|rg lre
a|rporl's rard||rg capac|ly lo 82 r||||or passergers. Terr|ra| 1 W||| lealure lre deoul ol severa| lasl ard
sear|ess lrave| (FA3T) |r|l|al|ves |r Crarg| A|rporl |rc|ud|rg se|l-serv|ce ard auloraled opl|ors dur|rg
crec|-|r, oag drop, ard |rr|gral|or c|eararce al lre deparlure gale.
lr Augusl 2013, Crarg| A|rporl 0roup re|eased |ls corcepl p|ars lor deve|op|rg ar |cor|c r|xed-use
corp|ex or lre ex|sl|rg car par| lrorl|rg Terr|ra| 1, code-rared 'Projecl JeWe|', Wr|cr |s scredu|ed lor
corp|el|or |r 2018. Tr|s errarcererl W||| |rcrease Terr|ra| 1's currerl passerger rard||rg capac|ly ol
21 r||||or lo 21 r||||or per arrur. Tre corp|ex |s erv|saged lo prov|de av|al|or ard lrave|-re|aled
lac|||l|es as We|| as a var|ely ol rela|| oller|rgs ard |e|sure allracl|ors.
3|rgapore's rass rap|d lrars|l (VRT) sysler |s oe|rg errarced W|lr lre deve|oprerl ol a l|llr ||re, lre
0oWrloWr L|re |r 3|rgapore. Tre reW VRT ||re Wr|cr W||| oe corp|eled |r prases oelWeer 2013 ard
201Z, W||| serve lre rorlr-Weslerr ard cerlra|-easlerr reg|ors ol 3|rgapore lo lre cerlra| areas ol lre c|ly.
Prase ore ol lre 0oWrloWr L|re opered |r 0eceroer 2013 W|lr s|x slal|ors.
Tre Var|ra 8ay Cru|se Cerlre 3|rgapore (V8CC3) oll|c|a||y opered |r 0clooer 2012. lr 2013, cru|se
passergers ard cru|se sr|ps recorded a 13 ard 1Z y-o-y |rcrease respecl|ve|y lo 1.03 r||||or cru|se
passergers ard 391 sr|ps. Tre oper|rg ol lre V8CC3 |r add|l|or lo lre 3|rgapore Cru|se Cerlre ras
erao|ed 3|rgapore lo rard|e ar |rcrease |r cru|se passergers ard |arger cru|se sr|ps. lr add|l|or, Crarg|
A|rporl 0roup, 3T8 ard Pr|rcess Cru|ses rave arrourced a reW l|y-cru|se |r|l|al|ve |r Vay 2011 lo groW
lre cru|se |rduslry |r 3|rgapore.
3.4 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Tre 3T8 calegor|ses lre role| rar|el |r 3|rgapore |rlo |uxury, upsca|e, r|d-l|er ard ecorory calegor|es.
lole|s |r 3|rgapore are c|ass|l|ed oased or severa| laclors |rc|ud|rg average roor rales, |oca||ly ard
producl qua||ly. Tre rajor|ly ol role|s are s|lualed |r 3|rgapore's c|ly cerlre |r lre lo||oW|rg ra|r d|slr|cls /
|ocal|ors:
0rchard Road - 3|rgapore's ra|r sropp|rg oe|l W|lr ar exlers|ve cro|ce ol rela||, erlerla|rrerl,
d|r|rg, oll|ce ard role| oller|rgs. Vajor lour- ard l|ve-slar role|s |ocaled |r lr|s area |rc|ude lre Four
3easors lole|, 3|rgapore Varr|oll lole|, Vardar|r 0rcrard 3|rgapore, 0rard lyall 3|rgapore,
0rcrard lole|, 0oodWood Par| lole|, Roya| P|aza or 3colls, lo||day lrr 3|rgapore 0rcrard C|ly
Cerlre, l||lor 3|rgapore, Tre Corcorde lole| 3|rgapore ard 0rard Par| 0rcrard. Vosl ol lrese
role|s largel |e|sure ard corporale lrave||ers. Vajor serv|ced aparlrerls |ocaled |r 0rcrard Road
|rc|ude lre Fraser Res|derce 0rcrard, 0rcrard Par|su|les, Par Pac|l|c 3erv|ced 3u|les 0rcrard ard
3orersel 0rcrard 3|rgapore.
E-15
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 15
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
ras asah | ug|s - Tr|s area |s craracler|sed oy a v|orarl arls, cu|lure, erlerla|rrerl ard
educal|or ruo, W|lr severa| c|ly carpuses, lre Nal|ora| L|orary ol 3|rgapore, 3|rgapore Arls
Vuseur ard severa| olrer arl rouses ard educal|or cerlres. A ser|es ol pedeslr|ar ra||s ard p|azas
prov|de ||ve|y spaces lor oazaars, ouldoor everls ard acl|v|l|es. lole|s corcerlraled |r lr|s area
|rc|ude lre Rerdezvous lole| 3|rgapore, lrlerCorl|rerla| 3|rgapore, 3lrard lole|, lo|s 3|rgapore
or 8ercoo|er ard Tre C|ly 8ayv|eW lole| 3|rgapore. Trere are a|so severa| serv|ced aparlrerl
deve|oprerls |r lr|s d|slr|cl sucr as lre C|lad|res Vourl 3opr|a 3|rgapore, 3orersel 8ercoo|er
ard Par Pac|l|c 3erv|ced 3u|les 8eacr Road.
Har|na ay | 8untec 6|ty - A We||-eslao||sred r|xed-use ruo corpr|s|rg oll|ces, role|s, sropp|rg
ard corverl|or lac|||l|es sucr as lre 3urlec 3|rgapore lrlerral|ora| Corverl|or & Exr|o|l|or Cerlre
ard Tre Rall|es C|ly Corverl|or Cerlre. Vajor role|s |r lr|s |oca||ly |rc|ude Var|ra 8ay 3ards, Tre
R|lz-Car|lor V|||er|a 3|rgapore, Corrad Cerlerr|a| 3|rgapore, Par Pac|l|c lole| ard Var|ra
Vardar|r. wr||e lr|s area calers pr|rar||y lo corporale ard VlCE lrave||ers, Var|ra 8ay 3ards
allracls rary |e|sure lrave||ers as |l prov|des exlers|ve sropp|rg, d|r|rg ard erlerla|rrerl lac|||l|es.
Raff|es P|ace | Tanjong Pagar | 8|ngapore R|ver - Tr|s |s lre core correrc|a| ard l|rarc|a| d|slr|cl
|r 3|rgapore corpr|s|rg r|gr r|se oll|ce ou||d|rgs, corserval|or srop rouses, res|derl|a|
deve|oprerls ard role|s. Tre C|ar|e 0uay ard 8oal 0uay areas a|org lre 3|rgapore R|ver oller
rary erlerla|rrerl ard d|r|rg opl|ors ard |s ore ol lre |ey allracl|ors |r 3|rgapore. Vajor role|
eslao||srrerls |r lrese areas |rc|ude Tre wesl|r 3|rgapore, Car|lor C|ly lole|, Tre Fu||erlor lole|,
Tre Fu||erlor 8ay lole|, 3lud|o V lole|, 3W|ssole| Vercrarl Courl 3|rgapore, V lole| 3|rgapore,
Par|roya| or P|c|er|rg, 0rard Coplrorre walerlrorl, Coplrorre K|rgs, Arara lole| 3|rgapore ard
Tre 0a||ery lole|. 3erv|ced aparlrerls |ocaled |r lr|s area |rc|ude lre Ascoll Rall|es P|ace
3|rgapore ard 3orersel L|arg Courl.
6|v|c 0|str|ct | 6|ty ha|| - Tr|s area |s lre r|slor|ca| seal ol lre 0overrrerl ard rore lo rary ol
3|rgapore's corserved ou||d|rgs ard rorurerls, rary ol Wr|cr roW rouse arls ard cu|lura|
lac|||l|es, as We|| as par|s ard rajor oper spaces. Tour|sl allracl|ors |rc|ude lre war Veror|a| Par|,
Forl Carr|rg Par| ard Cr|jres. lole|s |r lr|s area, sucr as Rall|es lole| 3|rgapore, Fa|rrorl
3|rgapore, 3W|ssole| Tre 3larlord, Naur| lole| 3|rgapore ard Car|lor lole| 3|rgapore, Wr|cr
serve oolr lour|sls ard ous|ress lrave||ers.
8entosa - 3|rgapore's resorl |s|ard, 3erlosa, a|so ollers a ruroer ol r|d- lo r|gr-erd
accorrodal|or opl|ors. Resorls wor|d 3erlosa, ore ol 3|rgapore's |rlegraled resorls, opered or
3erlosa ls|ard |r 2010 ard roW lealures role|s ard olrer lac|||l|es sucr as ur|versa| 3lud|os
3|rgapore, VlCE lac|||l|es, a cas|ro as We|| as rela|| ard d|r|rg lac|||l|es. 0lrer role|s or 3erlosa
corpr|se ol Cape||a 3|rgapore, w 3|rgapore 3erlosa Cove, Tre 3erlosa Resorl ard 3pa, Arara
3arcluary Resorl 3erlosa, 3rargr|-La's Rasa 3erlosa Resorl 3|rgapore ard Tre Voverp|c|
ler|lage lole| 3|rgapore.
Ex|sr|ng lore| $upp|,
3|rgapore's role| |rverlory corpr|sed a lola| ol 51,92 gazelled ard ror-gazelled roors |r 2013
accord|rg lo lre 3T8. Approx|rale|y 3,310 roors opered dur|rg lre year, record|rg a .5 groWlr over
2012. lrlerral|ora| orarded role|s Wr|cr opered |r 3|rgapore |r 2013 |rc|ude lre 220-roor lo||day lrr
Express 0rcrard Road, lre 305-roor Tre wesl|r |ocaled al As|a 3quare, lre 381-roor Rarada
3|rgapore al 8a|esl|er ard lre 3Z-roor Par|roya| or P|c|er|rg. Tre 305-roor Tre wesl|r opered |r
Noveroer 2013, or|rg|rg lre role| orard oac| lo 3|rgapore aller a 10-year aoserce. lr add|l|or, severa|
E-16
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
role|s opered ouls|de lre c|ly cerlre areas |rc|ud|rg lre 251-roor Par| Averue Crarg|, lre 313-roor
Capr| oy Fraser ard lre 229-roor v|||age lole| Kalorg.
As al YT0 Apr|| 2011, lrere ras oeer lWo role| oper|rgs corpr|s|rg lre 112-roor lo||day lrr Express
C|ar|e 0uay ard lre Z5-roor Aqueer lole| |ocaled al Ja|ar 8esar. Tr|s |s lre secord lo||day lrr
Express role| lo oper |r 3|rgapore, W|lr lre l|rsl deoul|rg or 0rcrard Road |r 2013.
Furure lore| $upp|,
Approx|rale|y 10,1Z1 roors are arl|c|paled lo erler 3|rgapore's role| rar|el oelWeer Jaruary 2011 ard
0eceroer 2018, exc|ud|rg ary proposed 0overrrerl Lard 3a|es s|les lor role|s.
lr 2011, rajor role| oper|rgs |r lre p|pe||re |rc|ude lre 3ol|le| 3o 3|rgapore ard Traders 0rcrardgaleWay.
Trese role|s W||| oe |ocaled |r pr|re areas |r lre cerlra| ous|ress d|slr|cl (C80) ard 0rcrard Road.
Assur|rg a|| lre proposed projecls raler|a||se lror 2011 lo 2018, 3|rgapore's role| roor |rverlory W|||
groW oy approx|rale|y 18.5 lror 51,92 roors |r Jaruary 2011 lo 5,13 roors oy 0eceroer 2018.
luxur, lore| Trao|ng Perlormance
Tre lo||oW|rg 3TR 0|ooa| slal|sl|cs are oased or a oas|el ol 15 role|s across 5,918 roors. As al YT0
Apr|| 2011, |uxury role| occuparc|es Were recorded al Z9.9 correspord|rg lo a 5.9 y-o-y |rcrease |r
Average 0a||y Rale (A0R) lo 300 111. Reverue per Ava||ao|e Roor (RevPAR) ol lre |uxury role| seclor
Was recorded al 300 331, dr|ver ra|r|y oy lre rale groWlr. lole| lrad|rg perlorrarce rera|rs slrorg W|lr
roousl corporale ard VlCE derard.
Vov|rg lorWard, g|ver lre erlry ol severa| reW |uxury role|s |rc|ud|rg lre oper|rg ol Tre wesl|r
3|rgapore |r |ale 2013 ard lre 3ol|le| 3o 3|rgapore (due lor corp|el|or |r erd Vay 2011), roor rales lor
corporale c||erls W||| rera|r corpel|l|ve.
19,Z19
51,22
51,92
5Z,531
0,530
1,811
3,23
1,903
3,310
2,5Z2
2,99
1,311
1,392
1,900
0
10,000
20,000
30,000
10,000
50,000
0,000
Z0,000
2012 2013 2011 2015 201 201Z 2018
N
u
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o
e
r
o
l
R
o
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s
Add|l|ors lo lole| 3upp|y |r 3|rgapore (2011 - 2018)
Ex|sl|rg 3upp|y Corp|eled 3upp|y NeW/Fulure Roors 3upp|y
3ource: 3T8, JLL
E-17
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Ex|sr|ng $erv|ceo /parrmenr $upp|,
Tre ex|sl|rg sloc| ol serv|ced aparlrerls |rc|ud|rg rajor |rlerral|ora| ard |oca| serv|ced aparlrerl
operalors |r 3|rgapore as al Apr|| 2011 slards al approx|rale|y 3 serv|ced aparlrerls W|lr approx|rale|y
1,800 ur|ls. Vajor serv|ced aparlrerl operalors accourl|rg lor lr|s supp|y |rc|ude Far Easl losp|la||ly
(21.Z), Frasers losp|la||ly (1Z.8), Tre Ascoll L|r|led (15.2), Par| Averue lole|s & 3u|les (9.5) ard
Par Pac|l|c lole|s ard Resorls (8.3).
Tre serv|ced aparlrerl |rverlory |s re|al|ve|y slao|e |r 3|rgapore W|lr rosl deve|oprerls oe|rg
corp|eled |r lre 1990s. A s|gr|l|carl proporl|or ol serv|ced aparlrerls are |ocaled |r pr|re res|derl|a|
d|slr|cls as lrese areas are oller prelerred oy corporale c||erle|e. Arecdola| ev|derce |rd|cales lral lre
0rcrard Road d|slr|cl |s lre rosl popu|ar area arorgsl corporale c||erle|e lor serv|ced aparlrerls.
Add|l|ors lo supp|y |r recerl years rave oeer ||r|led lo a leW deve|oprerls. lr 2013, lrere Were lWo
rajor add|l|ors lo supp|y - lre 180-roor Par Pac|l|c 3erv|ced 3u|les 8eacr Road ard lre 313-roor Capr|
oy Fraser. Tre Par Pac|l|c 3erv|ced 3u|les 8eacr Road |s Par Pac|l|c lole|s ard Resorls' lr|rd serv|ced
aparlrerl |r 3|rgapore. Capr| oy Fraser |s operaled oy Frasers losp|la||ly as a role| res|derce, caler|rg
rosl|y lo corporale guesls lror Crarg| 8us|ress Par| as We|| as |e|sure v|s|lors.
Furure $erv|ceo /parrmenr $upp|,
we are uraWare ol ary upcor|rg reW deve|oprerls |r lre p|pe||re. loWever, We rave rol la|er |rlo
accourl ary ror-orarded serv|ced aparlrerls |r lre reW supp|y.
0
10
20
30
10
50
0
Z0
80
90
100
S0
S50
S100
S150
S200
S250
S300
S350
S100
S150
S500
200Z 2008 2009 2010 2011 2012 2013 YT0 Apr
2013
YT0 Apr
2011
0
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(
7
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A
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Luxury Trad|ng Performance |n 8|ngapore
A0R (300) RevPAR (300) 0ccuparcy ()
3ource: 3TR 0|ooa|
Nole: Rales |rc|us|ve ol 3erv|ce Crarge
E-18
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 18
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Varkeru|oe $erv|ceo /parrmenr Trao|ng Perlormance
Tre 3TR 0|ooa| slal|sl|cs as sroWr aoove are oased or a oas|el ol 21 serv|ced aparlrerls W|lr 3,158
ur|ls |r 2011. As al YT0 Apr|| 2011, serv|ced aparlrerl lrad|rg perlorrarce recorded a rarg|ra| dec||re
|r oolr occuparcy ard A0R. 0ccuparcy decreased oy 1.9 percerlage po|rls dec||re lo ZZ.1 Wr||e A0R
sroWed a dec||re ol 2.1 lo 300 290 resu|l|rg |r a RevPAR ol 300 221. Tr|s r|grl oe due lo lre
add|l|or ol lre Par Pac|l|c 3erv|ced 3u|les 8eacr Road |r 2013 lo sore exlerl.
Tre 3TR 0|ooa| slal|sl|cs lror 200Z lo 2013 Were oased or a sra||er sarp|e ol 10 serv|ced aparlrerls
W|lr 1,55 ur|ls oul lre sarp|e ras oeer crarged |r 2011. As al erd-2013, lrad|rg perlorrarces ol lre
serv|ced aparlrerls recorded a s|gr|l|carl .9 percerlage po|rl |rcrease |r occuparcy lo||oW|rg lre
corp|el|or ol lre reluro|srrerl ol lre Fraser 3u|les 3|rgapore |r 2012.
Tral sa|d, 3|rgapore rera|rs a rajor reg|ora| ruo lor rary corpar|es ard expalr|ales are |rcreas|rg|y
oe|rg p|aced |r 3|rgapore lo oversee spec|l|c projecls |r lre reg|or. Trese projecls are lyp|ca||y |ess lrar
lWo years ard |rc|ude |rduslr|es sucr as o|| ard gas exp|oral|or, |rlraslruclure, rea|lrcare, as We|| as
oar||rg ard l|rarc|a| acl|v|l|es.
3.5 |nvestment Harket
lole|s |r 3|rgapore rare|y crarge rards ard are l|grl|y re|d oy lar||y corpar|es ard puo||c|y ||sled
erl|l|es. Tral sa|d, lrere rave oeer sore rajor lrarsacl|ors |r 2013. Tre 0rard Par| 0rcrard (ard
adjo|r|rg Kr|grlsor|dge rela|| pod|ur) Was lre |argesl s|rg|e correrc|a| properly lrarsacl|or |r
3|rgapore's r|slory, sell||rg |r 0clooer 2013 lor ar urd|sc|osed l|gure. Tre wesl|r lrarsacled al 300 18
r||||or (300 1.5 r||||or per roor) accord|rg lo |rduslry sources.
0
10
20
30
10
50
0
Z0
80
90
100
S0
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S150
S200
S250
S300
S350
200Z 2008 2009 2010 2011 2012 2013 YT0 Apr
2013
YT0 Apr
2011
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7
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0
}
8erv|ced Apartments Trad|ng Performance |n 8|ngapore
A0R (300) RevPAR (300) 0ccuparcy () 3ource: 3TR 0|ooa|
E-19
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 19
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Properly
Trarsacl|or
0ale
Roors Pr|ce (300)
Esl|raled Pr|ce
per roor (300)
Tre wesl|r 3|rgapore 0ec-13 305 18,000,000 1,531,000
Par| Averue Crarg| lole| & 3u|les Nov-13 251 138,000,000 550,000
Par| Reg|s 0cl-13 203 15,000,000 813,000
0rard Par| 0rcrard (W|lr
Kr|grlsor|dge rela|| pod|ur)
0cl-13 308 Corl|derl|a| Corl|derl|a|
lole| 1929 3ep-13 32 35,000,000 1,091,000
3erlosa Resorl & 3pa Aug-13 215 210,850,000 981,000
Rerdezvous 0rard lole| Aug-13 298 23,000,000 Z92,000
0a||ery lole| Aug-13 222 232,500,000 1,01Z,000
Par| lole| C|ar|e 0uay Jur-13 33 300,000,000 893,000
8erjaya lole| Vay-13 19 50,000,000 1,020,000
lole| w|rdsor Vay-13 225 13,000,000 Z21,000
lo|s Novera Var-13 211 150,000,000 22,000
3ource: JLL
3. Harket 0ut|ook
lrlerral|ora| v|s|lor arr|va|s lo 3|rgapore rave sroWr a s|gr|l|carl CA0R ol 9.8 lror 2003 lo 2013,
|rd|cal|rg lre popu|ar|ly ol lre c|ly-slale as a corporale ard |e|sure desl|ral|or. lr 2013, v|s|lor arr|va|s lo
3|rgapore Were recorded al 15. r||||or, represerl|rg a Z.1 |rcrease lror 2012. lr lre srorl lo red|ur
lerr, lre VTl expecls lour|sr groWlr lo core v|a |rcreas|rg v|s|lor sperd |rslead ol v|s|lor ruroers. Tre
3|rgapore goverrrerl corl|rues lo supporl lre lour|sr |rduslry lrrougr var|ous |r|l|al|ves |r v|eW ol |ls
2015 goa| ol 1Z r||||or v|s|lor arr|va|s ard 300 30 o||||or |r lour|sl rece|pls.
Reg|ora| rar|els sucr as lrdores|a, Va|r|ard Cr|ra ard Va|ays|a are |||e|y lo rera|r lre |ey source
rar|els lo 3|rgapore, g|ver lre|r prox|r|ly lo 3|rgapore ard lre preserce ol |oW cosl carr|ers ||r||rg lrese
courlr|es lo 3|rgapore. Corporale derard |s arl|c|paled lo rera|r slao|e |r lre srorl lo red|ur lerr as
3|rgapore rera|rs ore ol lre |ey correrc|a| ruos |r As|a Pac|l|c. 3|rgapore |s a|so a popu|ar VlCE
desl|ral|or ard lre c|ly Was As|a's Top Corverl|or C|ly lor lre 12lr corsecul|ve year |r 2013, accord|rg lo
lre |alesl g|ooa| rar||rgs oy lre lCCA. Le|sure derard |s expecled lo oe dr|ver oy reW lour|sr oller|rgs |r
lre rexl leW years, |rc|ud|rg lre 3porls luo Wr|cr ras a p|pe||re ol everls ||red up |r 2011, lor |rslarce
lre 8NP Par|oas wTA F|ra|s 3|rgapore |r 0clooer 2011.
Tre oper|rg ol lre cru|se lerr|ra|, Var|ra 8ay Cru|se Cerlre 3|rgapore (V8CC3), |r 0clooer 2012 |s
|||e|y lo or|rg |r rore cru|se passergers as lre c|ly |s roW ao|e lo rard|e |arger cru|ses ard passerger
vo|ures. lr add|l|or, lre reW l|y-cru|se co||aooral|or oelWeer Crarg| A|rporl 0roup, 3T8 ard Pr|rcess
Cru|ses Wr|cr Was arrourced |r Vay 2011 |s |||e|y lo oerel|l lre lour|sr |rduslry |r 3|rgapore.
Errarcererls lo 3|rgapore Crarg| A|rporl, |rc|ud|rg lre deve|oprerl ol Terr|ra| 1 (201Z), lre
deve|oprerl ol ar |cor|c r|xed-use corp|ex al Crarg| A|rporl (2018) as We|| as |rprovererls |r lre
puo||c lrarsporlal|or sysler W|lr lre add|l|or ol a reW VRT ||re W||| a|so |rprove lre ease ol access|o|||ly
lor v|s|lors lo ard lror 3|rgapore ard W|lr|r lre courlry.
E-20
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 20
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0ccuparcy |eve|s ol lre |uxury role| rar|el rave rera|red re|al|ve|y slao|e oelWeer 2011 ard YT0 Apr||
2011, acr|ev|rg occuparcy aoove 80. Tr|s correspords lo ar A0R ol oelWeer 300 39Z ard 300 131.
we arl|c|pale |uxury role| lrad|rg perlorrarce |r 3|rgapore lo groW roderale|y |r lre srorl lerr |r v|eW ol
lre upcor|rg supp|y ol upsca|e ard |uxury role|s |r 2011 ard 2015. 0|ver lral lre VTl expecls
exlerra||y-or|erled seclors sucr as rarulaclur|rg ard Wro|esa|e lrade |rduslr|es lo supporl groWlr |r 2011,
corporale derard |s |||e|y lo ralcr lr|s groWlr.
w|lr regards lo serv|ced aparlrerls, sourd lrad|rg perlorrarce |s |||e|y lo rera|r |r lre srorl lerr |r v|eW
ol slao|e corporale derard lo 3|rgapore ard ||r|led add|l|ors lo supp|y. Projecl groups ard corporale
re|ocal|or are |||e|y lo rera|r lre lWo ra|r segrerls lor serv|ced aparlrerls. 0|ver lre l|grler|rg ol
corporale oudgels, corpar|es ray |rcreas|rg|y prov|de lor re|ocal|or ol s|rg|es ard coup|es ralrer lrar
lar|||es; rerce, ore-oedroor aparlrerls W||| |||e|y corl|rue lo oe lre rosl popu|ar ur|l lype al serv|ced
aparlrerls.
Ercourag|rg|y, 3|rgapore corl|rues lo exper|erce lre pos|l|ve |rpacl ol |rduced derard, oolr lror a
|e|sure ard VlCE perspecl|ve, lror lre lrlegraled Resorls Wr|cr lo dale rave gereraled derard pr|rar||y
lror rar|els |r c|ose prox|r|ly lo 3|rgapore sucr as Va|r|ard Cr|ra. Tre VTl ra|rla|rs |ls lorecasl lor
00P groWlr |r 2011 lror 2.0 lo 1.0, |rd|cal|rg a gradua| |rprovererl |r lre rar|el go|rg lorWard.
3.7 |nter6ont|nenta| 8|ngapore
|nter6ont|nenta| 8|ngapore
Address: 80 V|dd|e Road
3|rgapore 1889
No. Roors: 10 roors |rc|ud|rg 19 su|les
Execul|ve C|uo: C|uo Lourge
Veel|rg 3pace: 13 reel|rg roors lor up lo 3Z0
guesls, oarquel sly|e
Food & 8everage: 0||ve Tree - a|| day d|r|rg reslaurarl
Var Fu Yuar - Carlorese cu|s|re
K0 - Japarese cu|s|re
Tre Lourge - |oooy |ourge
v|clor|a 8ar - dr|r|s ard srac|s
Arora 0e|| - srac|s
0lrer Fac|||l|es: 8us|ress Cerlre, 0yrras|ur, 3W|rr|rg Poo| ard 3pa
3ource: lole| Varagererl
lr 2010, lre lrlerCorl|rerla| 3|rgapore corp|eled a reluro|srrerl Wr|cr |rc|uded lre reroval|or ol 5
srop rouse roors, lre corvers|or ol lour add|l|ora| roors lo ar execul|ve |ourge ard reroval|or ol lre
Carlorese reslaurarl, Var Fu Yuar. we urderslard lrere are p|ars lor reroval|rg lre gueslroors |r lre
role|, lre lood ard oeverage oul|els ard lre recepl|or area |r r|d-2011. Tre reroval|ors W||| la|e
approx|rale|y ore ard a ra|l years lo corp|ele.
lore| Dperaror lnlormar|on
Tre lrlerCorl|rerla| 3|rgapore |s operaled oy lrlerCorl|rerla| lole|s 0roup (ll0) urder lre
lrlerCorl|rerla| orard. ll0 |s a g|ooa| rosp|la||ly corpary Wr|cr rarages lrarcr|ses ard oWrs role|s
ard resorls urder r|re d|sl|rcl orards corpr|s|rg lrlerCorl|rerla|, CroWre P|aza, lole| lrd|go, lo||day lrr,
E-21
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 21
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lo||day lrr Express, 3layor|dge 3u|les, Card|eWood 3u|les, EvEN lole|s ard luALuXE lole|s ard
Resorls.
As al Vay 2011, ll0 rad 1,Z00 role|s W|lr over 88,51Z role| roors |r rear|y 100 courlr|es ol Wr|cr |ess
lrar 1 ol lre role|s are oWred or |eased. ll0 ras approx|rale|y 1,000 role|s |r lre p|pe||re Wor|dW|de.
ll0 currerl|y ras s|x role|s |r 3|rgapore urder lre lrlerCorl|rerla|, CroWre P|aza, lo||day lrr ard
lo||day lrr Express orards W|lr 2,215 roors as al Vay 2011.
Ex|sr|ng 0omper|r|ve lore|s - lnrer0onr|nenra| $|ngapore
Tre properly-del|red corpel|l|ve sel corpr|ses a group ol l|ve properl|es, a|| ol Wr|cr are |ocaled |r lre
C|ly la|| ard Var|ra 8ay areas |r 3|rgapore.
Property Rooms 0perator
|nter6ont|nenta| 8|ngapore 40 |nter6ont|nenta| hote|s Croup
Fa|rrorl 3|rgapore Z9 Fa|rrorl Rall|es lole|s lrlerral|ora| lole|s & Resorls
Vardar|r 0r|erla| 3|rgapore 52Z
Vardar|r 0r|erla| lole| 0roup
Corrad Cerlerr|a| 3|rgapore 50Z l||lor lole|s & Resorls
Par Pac|l|c 3|rgapore Z90 Par Pac|l|c lole|s ard Resorls
3W|ssole| Tre 3larlord 1,21
Fa|rrorl Rall|es lole|s lrlerral|ora| lole|s & Resorls
Tota| Number of Rooms 4,20
3ource: JLL
Tre corpel|l|ve group|rg corpr|ses |rlerral|ora||y orarded role|s W|lr roor |rverlor|es ol aoove 500
roors. A|| corpel|l|ve role|s are We||-eslao||sred |r lre rar|el ard are gerera||y corporale ard VlCE
role|s. we role lral lre Par Pac|l|c 3|rgapore corp|eled a rajor reluro|srrerl |r 3epleroer 2012
cosl|rg approx|rale|y 300 80 r||||or ard roW lealures a relresred |oooy, rerovaled gueslroors, reW
d|r|rg corcepls ard a Pac|l|c C|uo or Leve| 38.
Perlormance ol 0omper|r|ve $er
Perlorrarce dala ras oeer sourced lror 3TR 0|ooa| ard prov|ded lo JLL lror Jaruary lo 0eceroer
2013. A srapsrol ol lre lrad|rg perlorrarce |s prov|ded |r lre lo||oW|rg crarl ard r|gr||grls lral lre
lrlerCorl|rerla| ras oulperlorred lre corpel|lor sel lor rosl rorlrs |r lre year W|lr RevPAR averag|rg
300 2Z versus corpel|lor sel ol 300 255. upor corp|el|or ol lre scredu|ed reluro|srrerl |r 201, lre
lrlerCorl|rerla| ras polerl|a| lo |rcrease |ls rales.
E-22
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 22
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol lnrer0onr|nenra| $|ngapore
8trengths weaknesses
3lraleg|c |ocal|or |r 8ug|s Jurcl|or, W|lr
slrorg |oca| F&8 oller|rg
L|r|ed lo 8ug|s VRT slal|or, prov|d|rg
corver|erl access lo puo||c lrarsporlal|or
Prox|r|ly lo lre C80
0llers a var|ely ol gueslroor lypes
|rc|ud|rg srop rouse gueslroors Wr|cr
rave oeer reluro|sred |r 2010
3evera| areas ol lre role| rave urdergore
reluro|srrerl recerl|y |rc|ud|rg lre
execul|ve |ourge ard Var Fu Yuar
reslaurarl
0ua||ly recreal|ora| lac|||l|es |rc|ud|rg a
sW|rr|rg poo|, gyrras|ur ard spa
3lao|e occuparcy |eve|s aoove 85 lror
Jaruary lo 0eceroer 2013
Lac| ol exc|us|v|ly ard pr|vacy lor ar
upsca|e / |uxury role| producl as lre
lrlerCorl|rerla| |s ||r|ed lo a sropp|rg
cerlre
Roors are |r reed ol reluro|srrerl.
3ore role|s |r lre corpel|l|ve sel rave
recerl|y urdergore reluro|srrerl ard
oller rore corlerporary roderr roors
Corpel|rg role|s are lar ard W|de |r
3|rgapore due lo lre sra||er rar|el oy
area ard exce||erl puo||c / pr|vale
lrarsporlal|or ||r|s
0
50
100
150
200
250
300
350
J
a
r
-
1
3
F
e
o
-
1
3
V
a
r
-
1
3
A
p
r
-
1
3
V
a
y
-
1
3
J
u
r
-
1
3
J
u
|
-
1
3
A
u
g
-
1
3
3
e
p
-
1
3
0
c
l
-
1
3
N
o
v
-
1
3
0
e
c
-
1
3
R
e
v
P
A
R
(
3
0
0
)
|nter6ont|nenta| 8|ngapore RevPAR 2013
lrlerCorl|rerla| 3|rgapore RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-23
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 23
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0pportun|t|es Threats
Leverage or lre We||-eslao||sred orard
rare ol lrlerCorl|rerla| |r lre 3|rgapore
rar|el
0pporlur|ly lo |rcrease roor rales upor
corp|el|or ol lre reluro|srrerl ol lre
role| gueslroors, lood ard oeverage
oul|els ard puo||c areas g|ver lral lre Par
Pac|l|c |s lre or|y corpel|l|ve role| Wr|cr
ras urdergore a rajor reluro|srrerl
lrcrease lre percerlage ol slaycal|ors
lror 3|rgaporears dur|rg lre Wee|erds
g|ver |ls slraleg|c |ocal|or |r 8ug|s
Jurcl|or
NeW role| deve|oprerls |rc|ud|rg lre
0u0 projecl ard 3oulr 8eacr lole| a|org
8eacr Road W||| corpele d|recl|y or
corp|el|or lror 2015
3upp|y p|pe||re rera|rs a lrreal W|lr reW
upsca|e / |uxury role|s
3.8 Fraser 8u|tes 8|ngapore
Fraser 8u|tes 8|ngapore
Address: 191A R|ver va||ey Road
3|rgapore 2183Z2
No. Roors: 255 ur|ls
Execul|ve C|uo: Nol app||cao|e
Veel|rg 3pace: Nore
Food & 8everage: A|| 0ay 0|r|rg Reslaurarl
0lrer Fac|||l|es: Tre Relreal, 0yrras|ur, 3W|rr|rg Poo|, wad|rg poo|, lrdoor cr||drer's
p|ay area, 0uldoor cr||drer's p|aygrourd
3ource: lole| Varagererl
Tre Fraser 3u|les 3|rgapore recerl|y urderWerl a rajor overrau|. P|arr|rg lor lre reroval|ors oegar |r
2009 ard rajor|ly ol lre reroval|ors Were carr|ed oul ard corp|eled |r 2012. A|| serv|ced aparlrerl ur|ls
Were lu||y rerovaled, W|lr lour ur|ls oe|rg added lo lre serv|ced aparlrerl |rverlory. Tre lood ard
oeverage oul|el ard serv|ced aparlrerl lac|||l|es Were a|so reluro|sred. Tre relreal, Wr|cr rouses lWo
rassage cra|rs ard a lool rassage lor res|derls, Was added as parl ol lre recreal|ora| lac|||l|es dur|rg lre
reluro|srrerl.
$erv|ceo /parrmenr Dperaror lnlormar|on
Tre Fraser 3u|les 3|rgapore |s operaled oy Frasers losp|la||ly. Frasers losp|la||ly |s a |ead|rg
|rlerral|ora| prer|er serv|ced res|derces oWrer ard raragererl corpary. Fror lWo l|agsr|p properl|es
al |rcepl|or |r 3|rgapore |r 1998, Frasers losp|la||ly ras exparded lo 19 prer|er properl|es |r over 30
c|l|es |r As|a, Auslra||a, Europe ard V|dd|e Easl. Coro|red W|lr lre projecled |aurcres ol reW serv|ced
res|derces across ex|sl|rg ard reW rajor galeWay c|l|es, Frasers losp|la||ly rarages aooul 8,000
aparlrerls as al 30 3epleroer 2013 ard expecls lo rarage over 11,100 aparlrerls (operal|ora| ard
upcor|rg) W|lr|r lre rexl lrree years lrrougr |ls orarded ||lesly|e oller|rgs Wr|cr |rc|ude Frasers prer|er
serv|ced res|derces (Fraser 3u|les, Fraser P|ace ard Fraser Res|derce), Vodera oy Fraser, lre rexl l|er
serv|ced res|derces lor ous|ress lrave||ers ard lre des|gr-|ed Capr| oy Fraser role| res|derces.
E-24
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 21
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Ex|sr|ng 0omper|r|ve lore|s - Fraser $u|res $|ngapore
Tre properly-del|red corpel|l|ve sel corpr|ses a group ol s|x properl|es, a|| ol Wr|cr are |ocaled |r
0rcrard Road, lre C80 ard lre R|ver va||ey area.
Property Rooms 0perator
Fraser 8u|tes 8|ngapore 255 Frasers hosp|ta||ty
Ascoll Rall|es P|ace 3|rgapore 11 Tre Ascoll L|r|led
0real wor|d 3erv|ced Aparlrerls 301 A||greer Properl|es L|r|led
Par Pac|l|c 3erv|ced 3u|les 0rcrard 3|rgapore 12 Par Pac|l|c lole|s ard Resorls
0rcrard Par|su|les 225 Far Easl 0rgar|sal|or
Regercy louse 90 Far Easl 0rgar|sal|or
Treelops Execul|ve Res|derces 220 0TZ 0eoerrar T|e Leurg losp|la||ly
Varagererl 3erv|ces
Tota| Number of Rooms 1,3
3ource: JLL
Tre corpel|l|ve group|rg corpr|ses a r|x ol |rlerral|ora| (52Z roors or 38.) ard doresl|c (839 roors
or 1.1) orarded producl. lrlerral|ora| orards |rc|ude lre Fraser 3u|les as We|| as Ascoll Rall|es P|ace
ard Par Pac|l|c 3erv|ced 3u|les 0rcrard. Tre Ascoll Rall|es P|ace, |ocaled |r lre C80, |s lre or|y
serv|ced aparlrerl |r lre corpel|l|ve group|rg W|lr a role| ||cerse Wr|cr a||oWs lre properly lo se|| |ls
ur|ls or a da||y oas|s, s|r||ar lo a role|.
Par Pac|l|c 3erv|ced 3u|les 0rcrard Road |s slraleg|ca||y |ocaled or 0rcrard Road, W|lr|r c|ose prox|r|ly
lo 3orersel VRT slal|or ard rary sropp|rg cerlres. Tre olrer serv|ced aparlrerls |r lre corpel|l|ve
group|rg are |oca||y operaled. Tre 0rcrard Par|su|les, ard Regercy louse are parl ol Far Easl
0rgar|sal|or's porllo||o ol serv|ced aparlrerls. Far Easl 0rgar|sal|or |s 3|rgapore's secord |argesl
serv|ced aparlrerl operalor Wr|cr a|so operales role|s.
0real wor|d 3erv|ced Aparlrerls |s lre |argesl properly W|lr 301 roors ard |s |ocaled |r c|ose prox|r|ly lo
lre Fraser 3u|les |r R|ver va||ey. loWever, lre serv|ced aparlrerl does rol rave ary slud|o or ore-
oedroor ur|ls Wr|cr are currerl|y lre prelerred roor lype, g|ver lre |rcreas|rg lrerd ol serv|ced
aparlrerls oe|rg occup|ed oy s|rg|es or coup|es ralrer lrar lar|||es.
Perlormance ol 0omper|r|ve $er
Perlorrarce dala ras oeer sourced lror 3TR 0|ooa| ard prov|ded lo JLL lror Vay lo 0eceroer 2013.
we urderslard lror Frasers losp|la||ly lral slal|sl|cs lror Vay lo 0eceroer 2013 rel|ecl a slao|e
corpel|l|ve sel Wrereas r|slor|ca| dala |rc|uded olrer corpel|lors sucr as role|s. RevPAR |eve|s rave
rarged oelWeer 300 191 ard 300 30Z lror Vay lo 0eceroer 2013 Wrereas lre corpel|lor sel recorded
RevPAR rarg|rg oelWeer 300 225 ard 300 298 dur|rg lr|s per|od.
E-25
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 25
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser $u|res $|ngapore
8trengths weaknesses
Localed rear lre C80 ard c|ly cerlre
3|lualed adjacerl lo va||ey Po|rl 3ropp|rg
Cerlre ard |r c|ose prox|r|ly lo 0real
wor|d 3ropp|rg Cerlre
NeW|y reluro|sred serv|ced aparlrerl
ur|ls ard lac|||l|es
0a||y rouse|eep|rg serv|ces aparl lror
3urdays ard puo||c ro||days
A|| day d|r|rg reslaurarl opers l||| 10pr
da||y
Ava||ao|||ly ol cr||drer's lac|||l|es |rc|ud|rg
ar |rdoor ard ouldoor p|ay area ard a
Wad|rg poo|
21-rour gyrras|ur
3credu|ed srull|e serv|ce lo |ey ous|ress
ard sropp|rg d|slr|cls
Preserce ol exlers|ve cr||d-lr|erd|y
lac|||l|es ard lWo lo lrree-oedroor ur|l
lypes W||| erao|e lre Fraser 3u|les lo caler
lo lar|||es
Z5 ol corporales slay|rg al lre Fraser
3u|les are lror Forlure 500 corpar|es
Nol W|lr|r Wa|||rg d|slarce lo ary VRT
slal|or
Nol W|lr|r Wa|||rg d|slarce lo C80 or c|ly
cerlre ur|||e rucr ol lre Fraser 3u|les'
corpel|l|ve sel
No reel|rg roors
L|r|led ors|le F&8 lac|||l|es
0
50
100
150
200
250
300
350
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1
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Fraser 8u|tes 8|ngapore RevPAR 2013
Fraser 3u|les 3|rgapore RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-26
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 2
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0pportun|t|es Threats
Leverage or lre slrorg orard rare ard
relWor| ol Frasers losp|la||ly Wr|cr
currerl|y ras l|ve properl|es |r 3|rgapore
Polerl|a| lor lurlrer rale groWlr |r ||grl ol
lre reW|y reluro|sred serv|ced aparlrerl
producl
Corl|rue largel|rg srorl lerr slays ol ore
lo lrree rorlrs lror projecl groups ard
re|ocal|rg expalr|ales
L|r|led supp|y ol reW orarded serv|ced
aparlrerls |r lre p|pe||re
Nor-orarded serv|ced aparlrerls oller|rg
s|r||ar producls ard serv|ces
Ererg|rg lrerd ol srorler slays al serv|ced
aparlrerls
E-27
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 2Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
4 Kuala Lumpur Market Overview
4.1 Execut|ve 8ummary
Kua|a Lurpur |s lre cu|lura|, l|rarc|a| ard ecoror|c cerlre ol Va|ays|a. Le|sure lour|sr |s dr|ver oy lre
c|ly's cu|lura| d|vers|ly, slrorg rela|| oller|rg ard |oWer cosl accorrodal|or (Wrer corpared lo olrer |ey
galeWay c|l|es |r As|a). Tre c|ly esserl|a||y operales as a corporale rar|el W|lr so||d Wee|day ous|ress
Wr||sl caplur|rg a r|grer |eve| ol |e|sure lour|sls or Wee|erds.
Accord|rg lo Tour|sr Va|ays|a, |rlerral|ora| v|s|lor arr|va|s lo Va|ays|a recorded 25.Z r||||or |r 2013,
represerl|rg groWlr ol 2.Z y-o-y. 3lal|sl|cs are rol re|eased lor Kua|a Lurpur a|ore oul We expecl a
s|r||ar rale ol groWlr as lre rajor |rlerral|ora| |roourd porl lor lre courlry.
As al lre erd ol 2013, Tour|sr Va|ays|a esl|rales lrere Were 11,10 roors |r Kua|a Lurpur. Tre
rajor|ly ol reW supp|y W||| oe locused |r KL 3erlra| ard Kua|a Lurpur C|ly Cerlre (KLCC). we expecl
approx|rale|y 3,300 roors lo erler Kua|a Lurpur's role| rar|el oy lre erd ol 2018. 0|ver lre r|gr
corcerlral|or ol oll|ce supp|y |r oolr KLCC ard KL 3erlra|, lre rajor|ly ol lr|s upsca|e ard |uxury-graded
role| sloc| W||| oe corcerlraled |r lrese lWo areas.
Aller dec||r|rg s|gr|l|carl|y dur|rg 2009 due lo lre 0|ooa| F|rarc|a| Cr|s|s, lre Kua|a Lurpur |uxury rar|el
ras reoourded oac| lo pre-cr|s|s |eve|s a|lrougr lre rale ol groWlr ras slagraled |r recerl years. As ol
YT0 Apr|| 2011, A0R |rcreased y-o-y oy .8 lror VYR 398 lo VYR 125 Wr||sl occuparcy |rcreased oy
2.3 percerlage po|rls lo reacr Z8.3. As a resu|l, RevPAR |rcreased lror VYR 301 lo reacr VYR 332
represerl|rg groWlr ol 9.3 over lre sare per|od.
4.2 Ha|ays|a Econom|c Harket 0verv|ew
Ha|ays|a: Econom|c |nd|cators
2010 2011 2012 2013 2011F 2015F 201F
Rea| 00P ( Crarge) Z.12 5.13 5.1 1.9 1.81 1.01 1.15
00P (u30 o||||ors, PPP)
390.19 110.51 133. 153.99 1Z5.80 195.02 51Z.0Z
00P Per Cap|la (u30, PPP)
13,90 11,150 15,03Z 15,513 1,030 1,118 1,951
Corsurer Pr|ce lrdex ( Crarge) 1.Z3 3.1Z 1. 2.11 3.25 2.Z9 3.03
Excrarge Rale (LCu / u30) 3.08 3.18 3.0 3.28 3.11 3.09 3.09
urerp|oyrerl Rale () 3.30 3.05 3.02 3.10 3.10 3.1Z 3.1Z
Popu|al|or (r||||or) 2Z.9Z 28.11 28.81 29.2 29.8 30.09 30.50
3ource: 0xlord Ecoror|cs, F= Forecasl
Tre Va|ays|ar ecorory exparded oy .2 year-or year |r 01 2011, up lror 5.1 |r 01 2013, ard lre
laslesl arrua| pace s|rce lre erd ol 2012. Tr|s Was |r ||re W|lr lorecasls oy 0xlord Ecoror|cs ard, as a
resu|l, lre 2011 groWlr lorecasl rera|rs urcrarged al 1.8. Tre p|c|-up |r groWlr Was oroad oased, W|lr
corsurer sperd|rg, |rveslrerl ard exporls a|| groW|rg slrorg|y, up rore lrar year-or-year.
loWever, a ruroer ol laclors suggesl lral lre oul|oo| lor doresl|c derard |s sl||| urcerla|r. Re|al|ve|y
r|gr |rl|al|or, resu|l|rg lror reduced lue| suos|d|es ard |rcreased |rd|recl laxes, r|gr rousero|d
|rdeoledress ard Wea| corsurer corl|derce |s expecled lo reduce lre groWlr |r corsurer sperd|rg lror
Z.2 |r 2013 lo 1.1 lr|s year.
E-28
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 28
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0|ver |rl|al|or aoove 3, slrorg groWlr al lre slarl ol lre year ard sore corcerr aooul l|rarc|a|
|roa|arces, 0xlord Ecoror|cs expecls lral lre cerlra| oar| W||| ra|se |rleresl rales |r r|d-2011. lr
add|l|or, goverrrerl ellorls lo re|r |r puo||c l|rarces rear lral |rveslrerl groWlr |s |||e|y lo s|oW as We||.
0xlord Ecoror|cs expecls |rveslrerl lo |rcrease oy 1.8 |r 2011 aller groWlr ol 8.5 |r 2013.
8y corlrasl, lre oul|oo| lor exporls |r 2011 |s slrorger lrar |r recerl years. lr lre |asl lrree quarlers,
exporls rave oeer rucr rore roousl lrar |r lre prev|ous year, ard W|lr lorWard |rd|calors suggesl|rg lral
exporls, rolao|y e|eclror|cs, W||| |rprove, 0xlord Ecoror|cs expecls lral exporl vo|ure groWlr W|||
|rprove s|gr|l|carl|y |r 2011 corpared W|lr |asl year lo .Z. loWever, suodued derard lror Va|r|ard
Cr|ra, Va|ays|a's secord |argesl exporl rar|el, W||| oe a drag or exporls.
Tre goverrrerl p|ars lo ||ll lre ecorory lo deve|oped ral|or slalus oy 2020 urder lre Ecoror|c
Trarslorral|or Prograrre. Tre a|r |s lo gererale u30 111 o||||or lrrougr puo||c ard pr|vale |rveslrerl
ard ra|se lre arrua| per cap|la |rcore lo u30 15,000, lror u30 10,00 |r 2013. loWever, lre
goverrrerl |s slrugg||rg lo ra|se lre pr|vale seclor's ro|e |r lre prograrre, W|lr lre arourl ol p|edged
|rveslrerls la|||rg oy Z5 |r 2013 corpared lo 2012.
4.3 Tour|sm 0verv|ew
v|s|ror /rr|va|s
Accord|rg lo Tour|sr Va|ays|a, |rlerral|ora| v|s|lor arr|va|s lo Va|ays|a recorded 25.Z r||||or |r 2013,
represerl|rg groWlr ol 2.Z year-or-year. wr||e slal|sl|cs or |rlerral|ora| v|s|lor arr|va| groWlr lo Kua|a
Lurpur |s rol ava||ao|e, We oe||eve lral |l Wou|d oe s|r||ar lo lre groWlr acr|eved |r lre resl ol lre courlry.
v|s|lor arr|va|s recorded a 10-year CA0R ol 9.1 lo 2013.
Kua|a Lurpur |s predor|rarl|y a corporale rar|el W|lr slrorg Wee|day ous|ress oul re|al|ve|y ||r|led
|e|sure derard Wr|cr p|aces a cap or occuparcy as Wee|erds lerd lo oe |oW per|ods. Tre rajor |e|sure
ous|ress corpr|ses lour groups lror Va|r|ard Cr|ra ard lre V|dd|e Easl Wr|cr are rore pr|ce sers|l|ve
ard rol as r|gr y|e|d|rg.
-30
-20
-10
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30
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50
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20
25
30
2000 2001 2002 2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
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lrlerral|ora| v|s|lor Arr|va|s lo Va|ays|a
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: Tour|sr Va|ays|a
E-29
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 29
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$easona||r,
Kua|a Lurpur |s predor|rale|y a corporale rar|el oul |s sl||| popu|ar W|lr |e|sure lour|sls oller|rg
cors|slerl Wealrer pallerrs lrrougroul lre year. Accord|rg lo Tour|sr Va|ays|a, a rol|ceao|e sp||e |r
|rlerral|ora| v|s|lor arr|va|s |s ev|derl |r Varcr ard Ju|y eacr year, lrad|l|ora||y corlererce rorlrs ard lre
erd ol rorsoor seasor (Feoruary).
Fror Vay lo Augusl, r|grer v|s|lal|or ruroers are recorded, co|rc|d|rg W|lr lre W|rler seasor |r Auslra||a
ard lre surrer ro||days |r Europe ard lre u3A. 0clooer lo 0eceroer |s lyp|ca||y a slrorger corporale
per|od W|lr a ruroer ol year-erd VlCE everls la||rg p|ace. Tre Cr|rese NeW Year per|od |r Jaruary -
Feoruary dep|cls lre |oWesl ruroer ol |roourd lour|sls as We|| as Augusl - 3epleroer (due lo Raradar).
Seograpn|c Dr|g|n
wr||e |rlorral|or or geograpr|ca| source rar|els lo Kua|a Lurpur |s rol ava||ao|e, |l |s |||e|y lral |l Wou|d
r|rror lre resl ol Va|ays|a. Vajor source rar|els Wou|d lrer corpr|se ol 3|rgapore, lrdores|a ard
Va|r|ard Cr|ra a|lrougr We urderslard lral Kua|a Lurpur allracls a |arger srare ol v|s|lors lror Europe
ard lre Arer|cas corpared lo lre resl ol lre courlry.
0roWlr lor lre respecl|ve lop source rar|els a|| |rcreased. 3|rgapore, lrdores|a ard Va|r|ard Cr|ra a||
rose oy 1.3, .Z ard 11.Z respecl|ve|y. 0|ver lre groW|rg ||r|s |r a|r correcl|v|ly ard ecoror|c co-
operal|or oelWeer Va|ays|a, Va|r|ard Cr|ra ard lrdores|a, |l |s expecled lral lre rajor source ol v|s|lor
arr|va|s W||| corl|rue lo or|g|rale lror lrese source rar|els.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Jar Feo Var Apr Vay Jur Ju| Aug 3ep 0cl Nov 0ec
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3easora||ly - lrlerral|ora| v|s|lor Arr|va|s lo Va|ays|a
2008 2009 2010 2011 2012 2013
3ource: Tour|sr Va|ays|a
E-30
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 30
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
re, 0emano 0r|vers
Va|ays|a |s corl|ru|rg lo largel lre |ucral|ve VlCE segrerl, Wr|cr |s expecled lo groW lrrougr reW|y
|rlroduced l|rarc|a| |rcerl|ves largeled al p|arrers ard orgar|sers ard corslrucl|or ol reW |rlraslruclure.
Tre Va|ays|ar Corverl|or ard Exr|o|l|or 8ureau (VyCE8) |s corpel|rg lor r|gr-prol||e |rlerral|ora|
corverl|ors W|lr a spec|l|c locus or rea|lr ard red|ca| care, sc|erce ard lecrro|ogy, educal|or ard
erergy (o|| ard gas). Add|l|ora||y, Va|ays|a currerl|y ras lre rosl exr|o|l|or ra|| space ol ary courlry |r
3oulreasl As|a (Wr|cr |rc|udes lrdores|a, Tra||ard ard 3|rgapore) W|lr rosl ol lre space corcerlraled |r
Kua|a Lurpur.
Kua|a Lurpur a|so rera|rs as a pr|re sropp|rg desl|ral|or due lo |ls |arge corcerlral|or ol ra||s ard lre
erlry ol rary reW |rlerral|ora| orards, sucr as l&V, Ra|pr Laurer ard Arrar| Jears. Vore recerl|y,
oper|rgs ol reW sropp|rg oul|els |r KLCC rera|red leW W|lr lre rajor|ly ol reW rela|| space |r Kua|a
Lurpur deve|op|rg |r lre suouros |rslead.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
To cope W|lr lre rap|d groWlr ol |oW cosl carr|ers, lre corp|el|or ol Kua|a Lurpur lrlerral|ora| A|rporl 2
(KLlA2), expecled lo oe lu||y operal|ora| oy Vay 2011, ras oeer des|graled as a |oW cosl carr|er (LCC)
lerr|ra|. wrer corp|eled, |ls capac|ly |s urderslood lo oe approx|rale|y 15 r||||or passergers a year.
Tre rap|d expars|or ol space ard |oWer sel-up cosls cou|d lr|gger rore a|r||res lo rove lre|r readquarlers
lo Kua|a Lurpur lrlerral|ora| A|rporl lror olrer reg|ora| corpel|lors sucr as 8arg|o|'s 3uvarraorur|
A|rporl or 3|rgapore's Crarg| A|rporl.
Kua|a Lurpur ras a|so oegur corslrucl|or ol |ls p|arred Vass Rap|d Trars|l (VRT) projecl Wr|cr W||| spar
over lre 0realer Kua|a Lurpur / K|arg va||ey area. Tre VRT sysler |s p|arred lo rave lrree ||res
c|rc||rg Kua|a Lurpur ard cover|rg a lola| rad|us ol 20 |||orelres W|lr pre||r|rary projecl cosls esl|raled
al approx|rale|y VYR3 o||||or. 0peral|ors lor lre l|rsl ||res are expecled lo oe |r 201 ard rave a
capac|ly ol lWo r||||or passergers per day.
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Top 10 3ource Var|els lo Va|ays|a
2012 2013 3ource: Tour|sr Va|ays|a
E-31
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 31
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
8olr Va|ays|a ard 3|rgapore rave agreed lo deve|op a r|gr speed ra|| ||re oelWeer Kua|a Lurpur ard
3|rgapore oy 2020. Tre ||re |s expecled lo oe approx|rale|y 330 |||orelres |org ard W||| reduce lre
lrave|||rg l|re oelWeer lre lWo c|l|es lo 90 r|rules, greal|y |rcreas|rg correcl|v|ly ard lurlrer ||r||rg lre
lWo c|l|es logelrer. Projecl cosls are esl|raled lo oe |r lre rarge ol VYR10 o||||or W|lr Europear, Cr|rese
ard Japarese l|rrs eager|y p|lcr|rg lo W|r lre o|d lor corslrucl|or.
4.4 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Tre Kua|a Lurpur role| rar|el |s predor|rarl|y |ocaled W|lr|r KLCC. Tre area |s |ocaled arourd Ja|ar
Arparg, Ja|ar P. Rar|ee, Ja|ar 8|rja|, Ja|ar K|a Perg ard Ja|ar P|rarg. 0es|gred lo oe a c|ly W|lr|r a
c|ly, lre 100-acre s|le rosls lre Pelroras TW|r ToWers ard severa| rela|| corp|exes, as We|| as lre
corpel|l|ve sel ol role|s (W|lr lre excepl|or ol lre l||lor role| |r KL 3erlra|).
Tre KL 3erlra| deve|oprerl |s a prased r|xed-use deve|oprerl |ocaled lo lre soulr-Wesl ol KLCC W|lr
lre aro|l|or ol oecor|rg lre ous|ress ard l|rarc|a| ruo lor Kua|a Lurpur. Tre prec|rcl corpr|ses a
rarge ol uses |rc|ud|rg oll|ce, rela||, res|derl|a|, role|s, serv|ced aparlrerls as We|| as a red|a ard a
lecrro|ogy par|.
Ex|sr|ng lore| $upp|,
As al lre erd ol 2013, JLL esl|rales lrere Were 11,10 roors |r Kua|a Lurpur. Kua|a Lurpur reg|slered
severa| recerl role| oper|rgs |rc|ud|rg lre 31-roor 8esl weslerr Prer|er 0ua 3erlra|, 15-roor lo|s
3ly|es Creras, 500-roor lo|s 3ly|es Fraser 8us|ress Par| ard lre 112-roor 0rard lyall. Trese role|s
resu|led |r ar add|l|or ol 1,Z32 roors lo ex|sl|rg supp|y. Tre rajor|ly ol reW supp|y |s locused |r KL
3erlra| ard KLCC. Trree ol lre lour recerl oper|rgs (lre lWo lo|s 3ly|e properl|es ard lre 8esl weslerr)
are pos|l|ored |r lre oudgel seclor ard W||| |||e|y caler loWards |e|sure lour groups ard doresl|c lrave||ers.
0lrer role|s |r Kua|a Lurpur rave oeer go|rg lrrougr rajor reluro|srrerls. Tre 3rargr|-La role|, |r
parl|cu|ar, urderWerl ar exlers|ve reroval|or |r 2009 ard ras s|rce ollered lree W|re|ess correcl|or ard
|oWer rales |r ar ellorl lo dr|ve vo|ure lror corporale ard |e|sure ous|ress lo lre role|. lr Feoruary 2011,
lre N|||o lole| rear KLCC Was reorarded as ar lrlerCorl|rerla| ard urderWerl ar exlers|ve
reluro|srrerl ol |ls roors ard lac|||l|es.
Furure lore| $upp|,
we lorecasl approx|rale|y 3,300 roors lo erler Kua|a Lurpur's role| supp|y oy lre erd ol 2018. 0|ver
lre r|gr corcerlral|or ol corporale derard |r lre rar|el, lre supp|y |s |arge|y W|lr|r lre upsca|e ard
|uxury calegory.
Tre reW roors s|aled lo erler lre rar|el represerl a CA0R ol 1.5 lror 2003 - 2013. wr||sl lr|s CA0R
|s re|al|ve|y |oW overa||, lre reW supp|y |s pos|l|ored |r lre upsca|e ard |uxury segrerl ard represerls a
|arge |rcrease Wrer corpared lo lre ex|sl|rg supp|y |r lral segrerl. NeW erlrarls lo lre rar|el are
represerled oy |rlerral|ora| role| cra|rs |rc|ud|rg 3larWood, l||lor, Four 3easors, 8aryar Tree ard
Accor.
E-32
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 32
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
luxur, lore| Trao|ng Perlormance
Aller dec||r|rg s|gr|l|carl|y dur|rg 2009 due lo lre 0|ooa| F|rarc|a| Cr|s|s, lre Kua|a Lurpur |uxury rar|el
ras reoourded oac| lo pre-cr|s|s |eve|s a|lrougr rale groWlr ras slagraled |r recerl years. Tre rar|el |s
corpr|sed ol a represerlal|ve sarp|e ol 3,213 roors ard sever role|s.
Tre |uxury rar|el ras perlorred We||, averag|rg VYR 133 accord|rg lo VllR Corsu|l|rg. ll srou|d oe
roled lral lr|s sarp|e exc|udes lre Vardar|r 0r|erla| ard lre reW 0rard lyall Wr|cr are currerl|y
cors|dered lre lWo rale |eaders |r lre rar|el.
As ol YT0 Apr|| 2011, A0R rose oy .8 lror VYR 398 lo VYR 125 Wr||sl occuparcy |rcreased oy 2.3
percerlage po|rls lo reacr Z8.3. As a resu|l, RevPAR |rcreased lror VYR 301 lo reacr VYR 332
represerl|rg groWlr ol 9.3.
Luxury role| RevPAR groWlr lrerds seer lo rave crarged s|gr|l|carl|y |r Kua|a Lurpur W|lr RevPAR
currerl|y oe|rg dr|ver oy occuparcy ralrer lrar rale groWlr, Wr|cr Was reg|slered lror 2001 lo 2008. 0re
rajor laclor cou|d oe lre slrerglrer|rg currercy s|rce 2009.
Vov|rg lorWard, We expecl lrad|rg perlorrarce lo sroW lep|d, |l rol regal|ve groWlr |r ||grl ol a|| lre reW
supp|y. loWever, Va|ays|a |s sl||| expecled lo reg|sler 00P groWlr ol approx|rale|y 5 eacr year, Wr|cr
cou|d urderp|r lrad|rg perlorrarce |r lre red|ur lo |org lerr.
11,180
12,135 12,333 12,511
13,1Z2
11,525
198 208 931
1,053
1,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
10,000
15,000
50,000
2013 2011 2015 201 201Z 2018
T
o
l
a
|
R
o
o
r
s
Add|l|ors lo lole| 3upp|y |r Kua|a Lurpur
Ex|sl|rg 3upp|y Fulure lole| Roor 3upp|y
3ource: JLL
E-33
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 33
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
4.5 |nvestment Harket
3|rce 2011, lrere rave oeer ro corparao|e sa|es ol role|s lo Tre wesl|r |r Kua|a Lurpur. lr 2013, lre
Rad|us lrlerral|ora| lole| or Ja|ar 8u||l 8|rlarg Was purcrased oy a 3|rgapore deve|oper lor c|rca.
VYR 10,000,000 al a pr|ce per |ey ol VYR 350,000. Tr|s Was lre or|y |roWr arr's |erglr lrarsacl|or |r
lre c|ly |r recerl years.
wr||sl Kua|a Lurpur cou|d oe cors|dered ar oversupp||ed rar|el |r lre srorl lo red|ur lerr, lrere sl|||
rera|rs a dearlr ol ava||ao|e role| |rveslrerl opporlur|l|es W|lr eslao||sred ous|ress or lre rar|el.
3|r||ar lo olrer rar|els across As|a, role| assels |r Kua|a Lurpur rare|y lrarsacl ard are l|grl|y re|d oy
lar||y corpar|es ard doresl|c |rsl|lul|ors. As a resu|l, |rveslor derard lror slraleg|c |rveslors |s lorced
lo locus or deve|oprerl.
4. Harket 0ut|ook
Recerl groWlr |r v|s|lor arr|va|s lror 3|rgapore, lrdores|a ard Va|r|ard Cr|ra rera|r |ey |roourd
rar|els. u|l|rale|y, |rproved lrad|rg perlorrarce |r lre |uxury seclor |s deperderl or groWlr |r
corporale derard, Wr|cr |eads oac| lo derard lor oll|ce space |r KLCC ard lre ruroer ol VlCE everls
re|d arrua||y.
Var|el ooservers rera|r locused or lre ellecl ol lre Va|r|ard Cr|rese ouloourd rar|el lo Va|ays|a |r
||grl ol lre Va|ays|ar A|r||res 3Z0 lragedy. 0ur |rvesl|gal|ors W|lr|r lre corpel|l|ve sel ol role|s rave
sroWr r|r|ra| |rpacl lo Kua|a Lurpur's |uxury accorrodal|or seclor as rosl Va|r|ard Cr|rese arr|va|s
or |e|sure lours lrad|l|ora||y slay |r r|dsca|e or |oWer calegory role|s.
lr lre srorl lo red|ur lerr, Kua|a Lurpur cou|d lace ar oversupp|y ol reW role| roors |r lre upsca|e ard
|uxury seclors g|ver lre currerl p|pe||re ol deve|oprerl. Ercourag|rg|y, lre Va|ays|ar goverrrerl
rera|rs corr|lled lo prorol|rg lre c|ly as a |ey VlCE rar|el Wr|cr |s expecled lo dr|ve |roourd
corporale lrave| over lre cor|rg years. Tr|s prorol|or ol Kua|a Lurpur W||| corl|rue lo ||ll derard a|org
W|lr lre groWlr ol |ls |oW cosl carr|er relWor|, Wr|cr W||| lurlrer deve|op Kua|a Lurpur as a g|ooa| lour|sr
ard av|al|or ruo.
0
10
20
30
10
50
0
Z0
80
90
100
0
50
100
150
200
250
300
350
100
150
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013 YT0
Apr
2013
YT0
Apr
2011
0
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c
y
(
)
A
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R
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R
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v
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A
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R
)
Luxury lole| Perlorrarce |r Kua|a Lurpur
A0R (VYR) RevPAR (VYR) 0ccuparcy () 3ource: VllR Corsu|l|rg 3dr 8rd
E-34
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 31
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0ur |rvesl|gal|ors corl|rr reW role| deve|oprerls |r lre c|ly are oller de|ayed ard projecls oller
corp|ele sorel|res lWo or lrree years aller lre |r|l|a| lorecasl dale. Corverse|y, sore proposed projecls
ray la|| lo everluale or oe poslpored oased or deve|oper |ssues sucr as l|rarc|rg |ssues. Tr|s ra|es
lorecasl|rg roor supp|y very d|ll|cu|l |r Kua|a Lurpur. we rave lrerelore |rc|uded lrose role|s W|lr a
grealer lrar 80 crarce ol corp|el|or. we rave oased our assurpl|ors or projecls urder corslrucl|or,
Wrere grourd Wor|s rave correrced or |l a rar|el|rg ard sa|es carpa|gr |s urderWay.
Kua|a Lurpur rera|rs as a corpel|l|ve desl|ral|or lo lrave| lo W|lr|r lre 3oulreasl As|ar reg|or. Tre
courlry laces leW doresl|c ecoror|c |ssues as |l oerel|ls lror |oW |rl|al|or ard urerp|oyrerl rales, a
r|s|rg |eve| ol doresl|c corsurpl|or ard oeller |rlraslruclure.
Tre recerl re-e|ecl|or ol lre ru||rg parly a|so ersures po||l|ca| slao|||ly |r lre red|ur lerr. lrveslor
serl|rerl loWards Kua|a Lurpur srou|d rera|r rea|lry arorgsl slraleg|c |rveslors |oo||rg lo sel a
loolro|d |r Va|ays|a. Tre co||aooral|or oelWeer 0alar lo|d|rg LLC ard Jerarlas 3dr 8rd lo deve|op lre
l|rsl larrod's role| |s a slrorg |rd|cal|or ol |rveslor corl|derce |r lre |org lerr prospecls ol lre Kua|a
Lurpur rosp|la||ly seclor.
4.7 The west|n Kua|a Lumpur
Tre wesl|r Kua|a Lurpur |s a l|ve-slar role| s|lualed or Ja|ar 8u||l 8|rlarg, arorgsl a good r|x ol
sropp|rg, erlerla|rrerl ard |oca| allracl|ors. Key lour|sl allracl|ors |ocaled rearoy |rc|ude KL ToWer ard
lre Pelroras ToWers.
The west|n Kua|a Lumpur
Address: 199 Ja|ar 8u||l 8|rlarg, 55100 Kua|a
Lurpur, Va|ays|a
No. Roors: 113 guesl roors |rc|ud|rg 23 su|les
ard 3 ore-oedroor Execul|ve
Res|derces
Execul|ve C|uo: wesl|r Execul|ve C|uo Lourge
Veel|rg 3pace: 25 reel|rg roors ard corlererce
lac|||l|es; grard oa||roor ava||ao|e lor
Wedd|rgs ard |arge corlererces
Food & 8everage: 5 reslaurarl oul|els
Prego
F|ve 3erses
0oa Lal|r 0r||| & 8ar
Tre L|v|rg Roor
3p|asr
0lrer Fac|||l|es: Poo|, gyrras|ur, ||d's c|uo
3ource: lole| Varagererl
lore| Dperaror lnlormar|on
3larWood lole|s & Resorls wor|dW|de, lrc. |s ore ol lre |ead|rg role| ard |e|sure corpar|es |r lre Wor|d
W|lr rear|y 1,200 properl|es |r 100 courlr|es ard 181,100 erp|oyees al |ls oWred ard raraged properl|es.
3larWood |s a lu||y |rlegraled oWrer, operalor ard lrarcr|sor ol role|s, resorls ard res|derces W|lr lre
lo||oW|rg |rlerral|ora||y reroWred orards: 3l. Reg|s, Tre Luxury Co||ecl|or, w lole|, Tre wesl|r, Le
Vr|d|er, 3reralor, Four Po|rls oy 3reralor, A|oll, ard E|ererl.
E-35
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 35
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
3larWood currerl|y ras lour role|s |r Kua|a Lurpur urder Tre wesl|r, 3reralor, Le Ver|d|er ard A|oll
orards. Trere are lWo olrer 3larWood role|s |r lre p|pe||re Wr|cr W||| oe urder lre 3l. Reg|s ard w lole|
orards, oper|rg 2015 ard 201 respecl|ve|y.
Ex|sr|ng 0omper|r|ve lore|s - Tne wesr|n rua|a lumpur
Tre corpel|l|ve sel corpr|ses a group ol l|ve properl|es (exc|ud|rg Tre wesl|r), a|| ol Wr|cr are |ocaled |r
KLCC W|lr lre excepl|or ol l||lor Kua|a Lurpur |r KL 3erlra|.
Property Rooms Locat|on 0perator
The west|n Kua|a Lumpur 443 KL66 8tarwood hote|s & Resorts
3reralor lrper|a| Kua|a Lurpur 385 KLCC 3larWood lole|s & Resorls
Jw Varr|oll lole| Kua|a Lurpur 51 KLCC Varr|oll lrlerral|ora|
3rargr|-La lole| Kua|a Lurpur 2 KLCC 3rargr|-La lole|s & Resorls
Tre R|lz-Car|lor Kua|a Lurpur 250 KLCC R|lz Car|lor
l||lor Kua|a Lurpur 503 KL 3erlra| l||lor lole|s & Resorls
Tota| Number of Rooms 2,804
3ource: JLL
Tre corpel|l|ve group|rg corpr|ses |rlerral|ora||y-orarded role|s lola|||rg 2,801 roors. Tre 3rargr|-La |s
lre |argesl ol lre corpel|l|ve sel oy roor ruroer, urdergo|rg ar exlers|ve reluro|srrerl |r 2009.
0ueslroors |r lre 3reralor lrper|a| Were rerovaled |r 200Z as We|| as ar upgrade ol puo||c areas. Tre
Jw Varr|oll urderWerl a lu|| reluro|srrerl |r 2008. Tre l||lor |r KL 3erlra| ras jusl corp|eled a
reluro|srrerl ol |ls recepl|or ard lood ard oeverage oul|els.
Perlormance ol 0omper|r|ve $er
Perlorrarce dala ras oeer sourced lror 3TR 0|ooa| ard prov|ded lo JLL. A srapsrol ol recerl lrad|rg
perlorrarce |s prov|ded |r lre lo||oW|rg crarl ard r|gr||grls lral Tre wesl|r ras cors|slerl|y oulperlorred
lre corpel|l|ve sel over lror Jaruary lo 0eceroer 2013.
RevPAR rarged oelWeer VYR 3 ard VYR 1Z1 |r 2013. Tr|s corpares lo lre corpel|lor sel Wr|cr
rarged oelWeer VYR 331 ard VYR 12 dur|rg lre sare per|od.
0
50
100
150
200
250
300
350
100
150
500
J
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3
F
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1
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0
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e
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R
)
The west|n Kua|a Lumpur RevPAR 2013
Tre wesl|r Kua|a Lurpur RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-36
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 3
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Tne wesr|n rua|a lumpur
8trengths weaknesses
3lrerglr ol Tre wesl|r orard g|ooa||y
W|lr We||-recogr|sed guesl |oya|ly
prograr - 3larWood Prelerred 0uesl
(3P0)
Repeal guesls v|a 3P0 ard oerel|ls
lrrougr |ls reWards prograr
0ood cord|l|or ol roors overa||, lyp|ca||y
|arger Wrer corpared lo lre corpel|l|ve
sel (de|uxe roors al 12 square relres)
Pr|re |ocal|or or rajor arler|a| road ard
8u||l 8|rlarg d|slr|cl, W|lr|r KLCC W|lr
good access|o|||ly lo Rap|d Ra|| relWor|
3lrorg corporale guesl relerl|or W|lr a
ruroer ol corporale accourls prov|d|rg
repeal ous|ress
0ood exposure lo lre c|ly's rela|| arer|ly
allracl|rg |e|sure guesls or |oWer
occuparcy Wee|erds
8eller opl|ors ol F&8 oul|els ard
reel|rgs roors over |ls corpel|l|ve sel
0rard oa||roor car accorrodale |arge
corlererces or Wedd|rgs, slrorg oarquel
rar|el
0ueslroors roW over 10 years o|d ard
requ|r|rg reluro|srrerl
Nearoy rela|| ard erlerla|rrerl opl|ors
prov|d|rg slrorg corpel|l|or lor lre
role|'s F&8 oul|els
Tre role| |s predor|rarl|y a corporale
role| W|lr |ess r|dWee| |e|sure guesls,
excepl or Wee|erds
Vosl F&8 oul|els reed rajor
recorl|gural|or, |r parl|cu|ar lre a|| day
d|r|rg Tre L|v|rg Roor
0pportun|t|es Threats
Polerl|a| lor lurlrer A0R groWlr srou|d a
reluro|srrerl ol roors oe urderla|er
NeW ard recerl |uxury role|s erler|rg
supp|y rave pressured rar|el A0R lror
currerl |oWer |eve|s |r KLCC, polerl|a| lo
oerel|l lror groW|rg VlCE rar|el
Tre Va|ays|ar goverrrerl corl|rues lo
prorole lre c|ly as a rajor VlCE
desl|ral|or ard corporale derard |s
expecled lo ||ll |r cor|rg years
8eller cosl raragererl g|ver severa|
3larWood properl|es a|so operale |r
KLCC/KL 3erlra|
lrproved serv|ce |eve|s al |oWer |aoour
cosl oy r|r|rg lore|grers ard rar| ard l||e
erp|oyees. ll |s urderslood lral sore
corpel|rg role|s are a|ready do|rg lr|s
3rorl lerr opporlur|ly lo allracl rore
VlCE everls over Tra||ard |r ||grl ol
po||l|ca| |rslao|||ly. Arecdola| reporls a|so
suggesl sore |e|sure lrave||ers are
croos|rg Kua|a Lurpur over 8arg|o| |r
||grl ol recerl lrave| Warr|rgs lo Tra||ard
Trere |s a s|gr|l|carl arourl ol reW role|
supp|y lo 2018 (3,300 roors). Tre wesl|r
W||| corl|rue lo corpele W|lr lrese reW
erlrarls |r lre upsca|e ard |uxury seclors
Vary serv|ced res|derces or aparlrerls
oller overr|grl slays ard d|recl|y corpele
W|lr role|s. ur|||e rary As|ar c|l|es lral
erlorce a ore Wee| r|r|rur slay
requ|rererl, Kua|a Lurpur does rol.
Tre c|ly's exlers|ve reW supp|y ol |uxury
res|derces creales rore corp|el|or lor
role|s oller|rg corpel|l|ve roor rales
Recerl r|r|rur Wage sl|pu|al|ors cou|d
p|ace cosl pressure or a|| role|s |r lre
c|ly. Tr|s ray resu|l |r ar A0R |rcrease,
roWever ra|e Va|ays|a |ess corpel|l|ve
|r lre |rlerral|ora| rar|el W|lr a |oss ol
roor r|grls overa||
NeW role|s ergag|rg |r a pr|ce War lral
W||| s|gr|l|carl|y Wea|er lre corporale
rar|el srare ol o|der properl|es as lrey
are urao|e lo ralcr lre reW role|s |r
lerrs ol prys|ca| producl ard oller|rg
E-37
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 3Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
5 Kobe Market Overview
5.1 Execut|ve 8ummary
Kooe |s lre cap|la| ol lyogo Preleclure, |ocaled rear lre cerlre ol Japar, |r lre Karsa| reg|or or lorsru
ls|ard. ll |s lre l|llr |argesl c|ly |r Japar rav|rg 1.51 r||||or res|derls as ol 0clooer 2013. As ore ol lre
core c|l|es |r lre Karsa| reg|or, Kooe |s recogr|sed as a ous|ress ruo oolr doresl|ca||y ard g|ooa||y. Tre
c|ly ras ar exlers|ve lrarsporlal|or relWor| ol a|r, sea ard |ard roules, erao||rg corver|erl access|o|||ly.
Kooe ras a r|gr corcerlral|or ol lore|gr-all|||aled corpar|es Wr|cr oerel|ls lre |oca| lour|sr |rduslry.
Vary ol lre Z3,000 ous|ress eslao||srrerls |ocaled W|lr|r lre c|ly are |r lre Wro|esa|e, serv|ce, ard
rarulaclur|rg |rduslr|es ard approx|rale|y 200 corpar|es are lore|gr corpar|es. A|org W|lr Kooe's
lrad|l|ora| |oca| |rduslr|es, reW |rduslr|es ul|||s|rg |rlorral|or lecrro|ogy, sc|erce, lecrro|ogy ard red|ca|
researcr rave a r|gr polerl|a| |r Kooe, Wr|cr |rpacl or lre |oca| lour|sr rar|el pos|l|ve|y.
3upp|y ol accorrodal|or ras gradua||y |rcreased |r lre pasl leW years, reacr|rg 12Z role|s (12,809
roors) |r 2013 due lo lre slao|e accorrodal|or derard |r Kooe. lole| occuparcy ras a|so |rcreased
lror 2013 oul A0R groWlr rera|rs ||r|led as corpared lo rajor c|l|es sucr as To|yo or 0sa|a. loWever,
gradua| |rprovererls |r role| perlorrarce are expecled |r Kooe |r lre rexl leW years.
5.2 Japan Econom|c Harket 0verv|ew
Japan: Econom|c |nd|cators
2010 2011 2012 2013 2014F 2015F 201F
Rea| 00P groWlr () 1.8 -0.12 1.13 1.51 1.32 1.33 1.08
00P (u30 o||||ors, PPP) 3,952.5 3,93.1 3,992.1 1,051.0Z 1,10Z.Z1 1,12.13 1,20Z.51
00P Per Cap|la (u30, PPP) 31,130 31,011 31,512 32,088 32,581 33,101 33,55
Corsurer Pr|ce lrdex ( crarge) -0.Z2 -0.28 -0.03 0.3 2.11 1.3Z 1.0
Excrarge Rale (LCu / u30) 81.11 Z.98 8.1 105.25 109.50 111.00 111.15
urerp|oyrerl Rale () 5.01 1.5Z 1.31 1.03 3.1 3.2 3.8Z
Popu|al|or (r||||or) 12.9Z 12.Z9 12.58 12.31 12.0Z 125.Z5 125.39
3ource: 0xlord Ecoror|cs, F= Forecasl
Tre Japarese ecorory ras oeer gradua||y |rprov|rg aller lre arrourcererl ol 'Aoeror|cs, lre
ecoror|c po||cy re|d oy lre Aoe Cao|rel lorred al lre erd ol 2012. Rea| 00P groWlr reacred 1.5 ard
1. |r 2012 ard 2013 respecl|ve|y W|lr gradua| groWlr lorecasl over lre rexl leW years. Tre Wea|er|rg
ol lre Japarese Yer ras a|so supporled ar |rcrease ol exporls ard corsequerl|y lre groWlr |r lre
|rduslr|a| oulpul. Tre arrourcererl ol To|yo as lre rosl ol lre 0|yrp|c 0ares |r 2020 W||| pos|l|ve|y
|rpacl lre Japarese ecorory, rol or|y dur|rg lre 0|yrp|c year, oul a|so |r lre sever years pr|or lo lre
0ares.
Tre goverrrerl carpa|gred or a p|allorr ol pressur|rg lre 8ar| ol Japar (80J) lor rore eas|rg ard
r|grer |rl|al|or. Aller lre e|ecl|or, lre 80J agreed lo a r|grer |rl|al|or largel, creal|rg expeclal|ors ol
corl|rued eas|rg |r lre rear lerr. lr add|l|or, lre 80J ras reW pro-expars|or |eadersr|p W|lr lre
appo|rlrerl ol 0overror Kuroda ard lWo depuly goverrors. Trese slraleg|es rad a s|gr|l|carl |rpacl or
lre Yer, Wea|er|rg |l lror JPYZ9 lor u301 |r 0clooer 2012 lo JPY101 p|us oy Vay 2011. 0eopo||l|ca|
E-38
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 38
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
r|s|s regard|rg lre u|ra|re slrerglrered lre Japarese Yer, oul |l ra|r|y rovered arourd JPY100-103 lo
lre u30 |r Apr|| ard Vay 2011.
Tre cerlra| oar| |s rore corl|derl |l car reacr lre largel lor |rl|al|or W|lr rorelary eas|rg. Tre 80J ras
rad ar expars|orary rorelary po||cy lor rore lrar a decade, oul lr|s process acce|eraled |r recerl years
W|lr quarl|lal|ve eas|rg, |.e., |rcreased purcrases ol l|rarc|a| assels. Tr|s, |r coro|ral|or W|lr ellecl|ve|y
0 |rleresl rales, |s l|ra||y rav|rg ar ellecl or del|al|or. Voreover, s|rce lre 80J arrourced |r Feoruary
2013 ar |rl|al|or largel ol 2, |l ras |rcreased purcrases ol goverrrerl oords aggress|ve|y ard ras
oecore rore corl|derl |l car reacr lre po||cy largel, W|lr ar a|r lo |rprove lre ecorory ard spur
|rl|al|or. Lasl|y, lre r|gr |eve|s ol ||qu|d|ly rave re|ped Wea|er lre Yer. lr lacl, lre Yer Was rever slrorg
|r rea| lerrslre Yer's pasl apprec|al|or Was ollsel oy doresl|c del|al|oroul roW lre add|l|ora|
Wea|ress srou|d re|p exporlers lo |rprove lre|r prol|l rarg|rs ard, lo a |esser exlerl, |rcrease lre|r
exporl vo|ures.
wr||e lre corsurer pr|ce |rdex ras r|ser oy 1. |r Varcr 2011, corsurpl|or lax |rcreased lror 5 lo
8 or 1 Apr|| 2011. wr||e lre lax r||e r|grl coo| doresl|c derard, Kuroda rerl|ored lral lurlrer
rorelary eas|rg |s rol p|arred al lre rorerl as lre ecorory |s or lrac| lo acr|ev|rg lre 2 |rl|al|or
largel oy spr|rg 2015, accord|rg lo lre Japar T|res.
5.3 Tour|sm 0verv|ew
v|s|ror /rr|va|s
Kooe |s lre cap|la| ol lyogo Preleclure, |ocaled rear lre cerlre ol Japar, |r lre Karsa| reg|or or lorsru
ls|ard. lrlerral|ora| accorrodal|or guesls lo lyogo Preleclure exper|erced lWo s|gr|l|carl d|ps |r lre
pasl leW years, dur|rg lre 0|ooa| F|rarc|a| Cr|s|s |r 2009 ard lo||oW|rg lre earlrqua|e |r Varcr 2011.
lrlerral|ora| accorrodal|or guesls accourled lor 3.Z ol lola| accorrodal|or guesls |r lyogo
Preleclure |r 2013.
lyogo Preleclure's lour|sr rar|el ras gradua||y recovered lror lre regal|ve |rpacl ol lre earlrqua|e.
Accord|rg lo slal|sl|cs lror lre Japar Tour|sr Agercy, lre lola| ruroer ol |rlerral|ora| accorrodal|or
guesls recorded a 1 y-o-y |rcrease |r 2013. 0roWlr |r |rlerral|ora| accorrodal|or guesls Was
pr|rar||y dr|ver oy doresl|c ecoror|c groWlr ard lre deprec|al|or ol lre Japarese Yer. Crarges |r lre
sarp|e ol role|s used |r lre slal|sl|cs r|grl a|so rave ar |rpacl or lre groWlr |r accorrodal|or guesls.
-30
-20
-10
0
10
20
30
10
50
0
100,000
200,000
300,000
100,000
500,000
00,000
2011 2012 2013
A
r
r
u
a
|
0
r
o
W
l
r
(
)
N
o
.
o
l
|
r
l
'
|
a
c
c
o
r
o
d
a
l
|
o
r
g
u
e
s
l
s
|nternat|ona| Accommodat|on
Cuests |n hyogo Prefecture
lrlerral|ora| v|s|lors Arrua| 0roWlr () 3ource: Japar Tour|sr Agercy
E-39
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 39
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0omesr|c v|s|ror /rr|va|s
0oresl|c v|s|lors lorr lre ou|| ol v|s|lor arr|va|s lo lyogo Preleclure, accourl|rg lor 9.3 ol lola|
accorrodal|or guesls |r lyogo Preleclure |r 2013. 0roWlr |r doresl|c accorrodal|or guesls lo lyogo
Preleclure ras oeer gradua| s|rce 2011. lr 2013, lre ruroer ol doresl|c accorrodal|or guesls lo lyogo
Preleclure Was recorded al 12. r||||or, a 1.8 |rcrease over lre prev|ous year. Tre l|uclual|or |r
slal|sl|cs rel|ecled ray rave occurred due lo lre crarge |r lre sarp|e s|ze oul |rlorral|or or lr|s |s rol
ava||ao|e puo||c|y.
$easona||r,
3|rce lre rajor|ly ol lre v|s|lors lo lyogo Preleclure are doresl|c v|s|lors, v|s|lor arr|va|s l|ucluale
accord|rg lo lre Japarese puo||c ro||days. Tre pea| seasor lor lrave| |s |r Varcr ard Augusl dur|rg lre
Japarese spr|rg ard surrer ro||days. Tre |oW seasors are dur|rg lre rorlrs ol Jaruary, Feoruary ard
Jure. 3epleroer |s a srou|der per|od. 3rou|der per|ods are del|red as rorlrs oelore ard aller pea|
0
5
10
15
20
25
0
2,000,000
1,000,000
,000,000
8,000,000
10,000,000
12,000,000
11,000,000
2011 2012 2013
A
r
r
u
a
|
0
r
o
W
l
r
(
)
N
o
.
o
l
d
o
r
e
s
l
|
c
a
c
c
o
r
o
d
a
l
|
o
r
g
u
e
s
l
s
0omest|c Accommodat|on
Cuests |n hyogo Prefecture
0oresl|c v|s|lors Arrua| 0roWlr ()
3ource: Japar Tour|sr Agercy
0
200,000
100,000
00,000
800,000
1,000,000
1,200,000
1,100,000
1,00,000
1,800,000
Jar Feo Var Apr Vay Jur Ju| Aug 3ep 0cl Nov 0ec
A
c
c
o
r
o
d
a
l
|
o
r
0
u
e
s
l
s
8easona||ty - Tota| Accommodat|on Cuests |n hyogo Prefecture
2008 2009 2010 2011 2012 2013 3ource: Japar Tour|sr Agercy
E-40
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 10
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
seasors. Tre |oW ruroer ol v|s|lor arr|va|s |r Jure |s a resu|l ol lre ra|ry seasor, Wrere lre ruroer ol
accorrodal|or guesls lo Japar |s gerera||y ||r|led.
Tre pea| seasor lor |e|sure derard lo Japar |s dur|rg lre rorlrs ol Varcr ard Augusl ard corporale
derard usua||y pea|s dur|rg lre per|od ol |oW |e|sure derard |r Japar. wr||sl lre lyogo Preleclure |s
rore ol a |e|sure desl|ral|or, Kooe |s popu|ar W|lr VlCE everls Wr|cr corlr|oule lo slrorg corporale
v|s|lal|or.
Seograpn|c Dr|g|n
lr 2013, lre lola| ruroer ol |rlerral|ora| accorrodal|or guesls lo lyogo Preleclure reacred 183,90
v|s|lors. wr||e 3oulr Korea ard Va|r|ard Cr|rese accorrodal|or guesls recorded a dec||re |r 2012 due
lo lre deprec|al|or ol lre Japarese Yer aga|rsl lre Korear wor ard lre po||l|ca| lers|ors oelWeer Japar
ard oolr courlr|es, a s|gr|l|carl |rcrease ras oeer roled |r 2013. lr 2013, accorrodal|or guesls lror
3oulr Korea ard Va|r|ard Cr|ra greW oy 51. ard 1Z.3 respecl|ve|y.
3|rce 2012, Ta|War ras overla|er 3oulr Korea ard Va|r|ard Cr|ra, oecor|rg lyogo Preleclure's lop
|roourd source rar|el. Tre l|rsl d|recl l||grl correcl|rg Ta|pe| ard Karsa| lrlerral|ora| A|rporl Was
ava||ao|e lror Jure 2012 ard ooosled v|s|lal|or lror Ta|War. lr 2013, v|s|lor arr|va|s lror Ta|War
accourled lor 29.1 ol lola| |rlerral|ora| accorrodal|or guesls, lo||oWed oy 1.1 lror 3oulr Korea ard
11.9 lror lorg Korg. Va|r|ard Cr|rese accorrodal|or guesls corpr|se 10.9 ard are lre lourlr
|argesl |rlerral|ora| rar|el lo lyogo Preleclure.
re, 0emano 0r|vers
Kooe's lour|sl allracl|ors are |ocaled lrrougroul lre c|ly, W|lr a r|grer corcerlral|or |r lre 3arror|ya /
Voloracr|, K|laro ard Kooe 8ay area. Le|sure derard lo lrese areas |s lyp|ca||y r|grer. Kooe |s
corver|erl|y access|o|e oy lra|r or car lror 0sa|a, Kyolo ard Nara, Wr|cr are rajor lour|sr desl|ral|ors.
Vary lour|sls coro|re lre aoove-rerl|ored desl|ral|ors W|lr Kooe.
Kooe a|so ras a ruroer ol g|ooa| ard doresl|c corpar|es Wr|cr gererale corporale derard lo lre c|ly.
Trese |rc|ude Procler & 0aro|e, Nesl|e, KaWasa|| leavy lrduslr|es, Asar| lo|d|rgs ard 'K L|re 0roup
Wr|cr ras eslao||sred readquarlers |r Kooe.
Ta|War
29.1
3oulr Korea
1.1
lorg Korg
11.9
Va|r|ard
Cr|ra
10.9
u3A
5.5
Tra||ard
1.9
0errary
1.3
Auslra||a
1.3
Frarce
1.3
uK
1.2
0lrers
19.5
Top 10 source markets by Ceograph|ca| 0r|g|n
|n 2013
3ource: Japar Tour|sr Agercy
Nole: lole| accorrodal|or W|lr rore lrar ler erp|oyees
E-41
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 11
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lr add|l|or, VlCE everls re|d |r Kooe are a|so |ey derard dr|vers. Accord|rg lo lre Japar Nal|ora|
Tour|sr 0rgar|zal|or (JNT0), Kooe ras oeer lre s|xlr |argesl rosl ol everls |r Japar s|rce 2010. A lola|
ol 92 reel|rgs Were re|d |r 2012, |r Wr|cr lre rajor|ly Were reel|rgs re|aled lo o|ored|ca| |rroval|or.
we||-eslao||sred VlCE |rlraslruclure sucr as lre Kooe Corverl|or Cerlre or Kooe Porl ls|ard, easy
access|o|||ly lror rajor c|l|es |r Japar ard lre preserce ol lrree a|rporls Wr|cr are W|lr|r easy access ras
erao|ed lre c|ly lo oecore a rore allracl|ve ous|ress desl|ral|or.
lr Jure 2013, lre V|r|slry ol Lard, lrlraslruclure, Trarsporl ard Tour|sr arrourced lral Kooe Was
se|ecled as ore ol lre Japarese 0|ooa| VlCE 3lraleg|c c|l|es. Tre c|ly Was a|so croser as lre ral|ora|
slraleg|c spec|a| zore |r Varcr 2011, Wrere lax ard olrer regu|al|ors W||| oe r|l|galed |r order lo dr|ve
|rroval|ve deve|oprerl. Tre Japarese goverrrerl |s corr|lled lo supporl|rg Kooe |r eslao||sr|rg |ls
pos|l|or as ore ol lre lop VlCE desl|ral|ors |r lre Wor|d.
Tre Kooe 8|ored|ca| lrroval|or C|usler (K8lC) ras oeer p|arred |r Porl ls|ard (8ay area) lor 15 years.
Kooe c|ly proroles Porl ls|ard lo oecore a cerlre ol red|ca| lecrro|ogy ard 1Z researcr ard
deve|oprerl lac|||l|es rave a|ready oeer corslrucled arourd lryo Cerlre slal|or. A carcer red|ca| cerlre
|s sl||| |r lre corslrucl|or process. lr cooperal|or W|lr rore lrar 200 corpar|es, K8lC W||| oe ore ol lre
rajor ral|ora| projecls lral a|so corlr|oule lo r|grer perlorrarce ol role|s |r lre surrourd|rgs.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
Kooe |s We||-correcled oy lre ou||el lra|r ard olrer puo||c lrarsporlal|or lror rajor c|l|es |r Japar. Kooe
car oe reacred |r |ess lrar lrree rours lror To|yo ard |s 15 lo 30 r|rules lror 0sa|a or Kyolo.
Cerlra| Kooe car oe eas||y accessed lror lrree a|rporls:
1. Kooe A|rporl (20 r|rules)
2. 0sa|a lrlerral|ora| A|rporl (10 r|rules)
3. Karsa| lrlerral|ora| A|rporl (5 r|rules)
wr||e Kooe A|rporl ard 0sa|a lrlerral|ora| A|rporl or|y serves doresl|c l||grls, Karsa| lrlerral|ora|
A|rporl |s a rajor a|rporl |ocaled |r wesl Japar ard calers lo rary |oW cosl carr|ers. Trese carr|ers
prov|de oolr doresl|c ard |rlerral|ora| l||grl correcl|v|ly lo Karsa| lrlerral|ora| A|rporl. lrlerral|ora| l||grl
correcl|v|ly |rc|udes lre lo||oW|rg courlr|es: 3oulr Korea, Auslra||a, Va|r|ard Cr|ra, lorg Korg, Ta|War,
3|rgapore, Pr|||pp|res, lrd|a ard Va|ays|a. lr Varcr ard Apr|| 2011, lre |rcrease |r l||grls lror Kaors|org,
Ta|pe|, Ta|crurg, Var||a ard 3rargra| lo Kooe ras corlr|ouled lo lre |rproved access|o|||ly lror rajor
As|ar c|l|es lo lre Karsa| area.
Voreover, Kooe porl |s ar |rporlarl lrarsporlal|or ||r|. Trere are severa| lerr|ra|s arourd Kooe porl
Wr|cr correcl Karsa| lrlerral|ora| A|rporl or KagaWa preleclure, as We|| as Er|re, Fu|uo|a, 0o|la,
Kagosr|ra, 0||raWa oy lerry ard cru|ses lo / lror 3rargra| |r Va|r|ard Cr|ra.
5.4 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Tre 3arror|ya / Voloracr| area |s lre c|ly's C80 W|lr lre preserce ol |ey ra||Way slal|ors sucr as Japar
Ra||Ways, lar|yu Ra||Ways ard larsr|r Ra||Ways. Trere are rary orarcres ol rajor doresl|c
corporal|ors, deparlrerla| slores ard F&8 oul|els |r lre 3arror|ya area. Vary ||r|led serv|ce role|s are
E-42
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 12
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
a|so |ocaled |r lr|s area, ra|r|y largel|rg ous|ress lrave||ers. Tre 0r|erla| lole| |s lre or|y lu||-serv|ce
role| |ocaled |r 3arror|ya area.
Tre K|laro area |s s|lualed |r lre rorlr ol lre c|ly ard |s We||-|roWr lor |ls r|slor|ca| ou||d|rgs. Vary
ooul|ques ard rela|| srops as We|| as lood ard oeverage oul|els are a|so |ocaled |r lr|s area. Tre JR 3r|r-
Kooe slal|or |s eas||y access|o|e lror lre K|laro area. Tre ANA CroWre P|aza Kooe |s lre or|y lu||-serv|ce
role|.
Tre Kooe 8ay area, ar area ol rec|a|red |ard |ocaled a|org Kooe 8ay, |s a|so popu|ar arorgsl lour|sls.
3evera| sropp|rg corp|exes ard lu||-serv|ce role|s, Wr|cr d|recl|y corpele W|lr lre ANA CroWre P|aza
Kooe, are s|lualed |r lr|s area. lr add|l|or, lour|sl allracl|ors sucr as Kooe Porl ToWer ard Kooe Var|l|re
Vuseur are popu|ar arorgsl lour|sls. Trere are sl||| rary urdeve|oped s|les |ocaled or lre rec|a|red
|ard. Vajor|ly ol lu|| serv|ce role|s |r Kooe are |ocaled |r lre Kooe 8ay area Wr|cr largel |e|sure lrave||ers.
Ex|sr|ng lore| $upp|,
Tre ruroer ol ex|sl|rg role| roors supp|y saW a gradua| |rcrease lror 200Z lo 2013. lr 2013, lrere Were
12Z role|s W|lr 12,809 roors |r Kooe accord|rg lo lre Japar V|r|slry ol lea|lr, Laoour ard we|lare.
Tre lo||oW|rg lao|e prov|des a surrary ol recerl rajor role| oper|rgs.
hote| Name T|m|ng Locat|on hote| Type No. of
Rooms
lole| CroWr Pa|a|s Kooe (reorarded) Ju|y 2012 Kooe Fu||-3erv|ce 229
lole| v|||a Forla|re Kooe 3arror|ya Apr 2013 3arror|ya L|r|led-3erv|ce 185
lole| Koer|gs- Krore Kooe 0ec 2013 Voloracr| L|r|led-3erv|ce 91
3ource: JLL
0
2,000
1,000
,000
8,000
10,000
12,000
11,000
0
20
10
0
80
100
120
110
200Z 2008 2009 2010 2011 2012 2013
N
o
.
o
l
r
o
l
e
|
r
o
o
r
s
N
o
.
o
l
l
o
l
e
|
s
Nuroer ol lole|s Nuroer ol Roors
3ource: Japar V|r|slry ol lea|lr, Laoour ard we|lare
Nole: F|sca| Year Erd|rg Varcr
Number of hote|s and Rooms |n Kobe
E-43
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 13
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Furure lore| $upp|,
Tre lo||oW|rg lao|e surrar|ses lre rajor projecled role| oper|rgs, rel|ecl|rg ||r|led oper|rgs |r lre rexl
leW years.
hote| Name (0eve|oper}
T|m|ng Locat|on hote| Type No. of
Rooms
La 3u|le Nov 2015 Kooe 8ay Fu||- 3erv|ce 88
ur|zo lrr Kooe 3arror|ya (T80) 3pr|rg 201 3arror|ya L|r|led- 3erv|ce T80
T80 (Resorl Trusl) T80 Ro||o T80 T80
T80 (Lor|rous lole|) T80 Kooe T80 T80
3ource: JLL
Perlormance ol upsca|e Fu||- $erv|ce lore|s
Tre crarl aoove sroWs lre lrad|rg perlorrarce ol upsca|e lu||-serv|ce role|s |r Kooe. Tre sarp|e
corpr|ses a lola| ol 1,5Z roors as al YT0 Apr|| 2011.
0ccuparcy |eve|s sroWed a rea|lry |rcrease lror 2009 lo 2010 oul dec||red rarg|ra||y oy 2.1 percerlage
po|rls |r 2011 due lo lre earlrqua|e. loWever, occuparcy |eve|s rave seer ar |rprovererl lror 2012,
reacr|rg Z3.5 as al YT0 Apr|| 2011 due lo lre ecoror|c recovery.
loWever, role|s |r Kooe sroWed ||r|led groWlr |r A0R as occuparcy |eve|s are sl||| al a roderale |eve|
oelWeer Z0 ard Z5. As al YT0 Apr|| 2011, A0R ol upsca|e lu||-serv|ce role|s Was recorded al JPY
11,993, correspord|rg lo ar |rcrease ol 1. over lre sare per|od |r 2013.
0
10
20
30
10
50
0
Z0
80
90
100
0
2,000
1,000
,000
8,000
10,000
12,000
11,000
2009 2010 2011 2012 2013 YT0 Apr
2013
YT0 Apr
2011
0
c
c
u
p
a
r
c
y
(
)
A
0
R
/
R
e
v
P
A
R
(
J
P
Y
)
Performance of Upsca|e Fu||-8erv|ce hote|s |n Kobe
A0R (JPY) RevPAR (JPY) 0ccuparcy ()
3ource: 3TR 0|ooa|
E-44
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 11
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
5.5 |nvestment Harket
Trere rave oeer severa| role| lrarsacl|ors corp|eled |r Kooe s|rce 2011. we role lral lre lrarsacl|ors
Were rosl|y corp|eled oy doresl|c corporal|ors or role| operalors.
Property Transact|on 0ate Rooms
Reported Pr|ce
(JPY}
Pr|ce per Rooms
(JPY}
lole| Fru|l F|oWer Apr-11 82 200,000,000 2,139,000
0r|erla| lole| Kooe 0cl-13 11 Corl|derl|a| Corl|derl|a|
3eas|de lole| Va||o v|||a
Kooe
Var-13 218 2,100,000,000 9,ZZ,000
0rard lole| Rocco 3|y v|||a Jar-12 50 Corl|derl|a| Corl|derl|a|
Kooe 8ay 3reralor lole| &
ToWers
0ec-11 2Z Corl|derl|a| Corl|derl|a|
Kooe 3e|sr|r 0r|erla| lole| 0ec-11 181 Corl|derl|a| Corl|derl|a|
lole| P|aza Kooe 0ec-11 115 Corl|derl|a| Corl|derl|a|
NeW 0lar| Kooe laroor|ard
lole|
0cl-11 235 5,000,000,000 21,2ZZ,000
3ource: JLL
5. Harket 0ut|ook
Tre Kooe role| rar|el, Wr|cr |s ra|r|y re||arl or doresl|c lour|sr, |s slao|e corpared lo olrer c|l|es |r
Japar. Arourd a quarler ol lola| |roourd lour|sr v|s|l|rg Kooe slay lor ore r|grl W|lr a vasl rajor|ly
urderla||rg s|rg|e day lr|ps. lroourd |rlerral|ora| lour|sr |s ||r|led corpared lo re|groour|rg preleclures
ol 0sa|a ard Kyolo; roWever slal|sl|cs rave sroWr lral |rlerral|ora| arr|va|s rave |rcreased, record|rg a
1.2 y-o-y groWlr |r 2013. 8ased or |rprov|rg ecoror|c lurdarerla|s, |l |s expecled lral corporale
lrave| W||| corl|rue lo record sleady red|ur lerr groWlr.
Tre supp|y ol role| roors ras sroWr sore |rcrease a|lrougr derard ard supp|y rera|r slrorg|y |r
oa|arce. Trere Were 12Z role|s (12,809 roors) recorded |r Kooe |r 2013. w|lr ||r|led reW supp|y, role|
occuparcy ras corl|rued lo |rcrease, roWever A0R groWlr rera|rs slao|e. Var|elW|de perlorrarce |s
expecled lo |rprove over lre rexl leW years urderp|rred oy slrerglrer|rg ecoror|c lurdarerla|s. Ar
|rcreas|rg ruroer ol |rlerral|ora| VlCE everls W||| lurlrer dr|ve lre ruroer ol |roourd lour|sls lror
ollsrore, ard lrerelore roor derard.
Tre c|ly |s a|r|rg lo allracl ore r||||or |rlerral|ora| v|s|lors ard 100 corlererces oy 2015. Tre p|ar |s
ra|r|y locused or eslao||sr|rg Kooe as ar |rlerral|ora| desl|ral|or lor |e|sure ard ous|ress, deve|op|rg
lre c|ly as a VlCE desl|ral|or ard prorol|rg Kooe as a |e|sure desl|ral|or. Tre deve|oprerl ol Porl ls|ard
lo oecore a cerlre ol red|ca| lecrro|ogy W||| a|so corlr|oule lo expard|rg red|ca| lour|sr |r lre lyogo
preleclure. Ved|ca| crec|-up lours W||| oe lurlrer proroled lo r|gr rel Worlr |rd|v|dua|s lror Va|r|ard
Cr|ra, Russ|a ard olrer As|ar courlr|es.
E-45
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 15
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
5.7 ANA 6rowne P|aza Kobe
ANA 6rowne P|aza Kobe
Address: 1-crore K|laro-cro, Cruo-|u, Kooe,
50-0002 Japar
(d|recl access lo JR 3r|r Kooe 3lal|or, 3r|r
Kooe 3uoWay 3lal|or)
No. Roors: 593 roors
Execul|ve C|uo: Prer|er Lourge
Veel|rg 3pace: 23 8arquel ard Veel|rg roors
Food & 8everage: Reslaurarl & 8ar Leve| 3
Cr|rese Reslaurarl 3uzrou
Japarese Reslaurarl Kooe Nadarar
Tepparya|| K|laro
Kyolo Cu|s|re Tar|ura K|lar|se
3usr| Kappou J|r
Casua| 0|r|rg Tre Terrace
Va|r 8ar Tre 8ar
Tea Lourge Tre Lourge
0lrer Fac|||l|es: wedd|rg Crape|, 3pa, 0yrras|ur, 3W|rr|rg Poo|, Jacuzz|, Prolo 3lud|o, F|or|sl, 0|ll
srop, Rela|| Pod|ur, Perlorr|rg Arls Trealre, 3uperrar|el, 50 Par||rg |ols
3ource: lole| Varagererl
lore| Dperaror lnlormar|on
Tre role| operalor lor ANA CroWre P|aza Kooe |s ll0 ANA lole|s 0roup Japar, Wr|cr |s lre jo|rl verlure
corpary ol lrlerCorl|rerla| lole|s 0roup (ll0) ard A|| N|ppor A|rWays (ANA). Tre jo|rl verlure corpary
Was lourded |r 200.
ll0 ANA lole|s 0roup operales 32 role|s (approx|rale|y 10,000 roors) |r Japar urder l|ve orards,
Wr|cr |rc|ude lrlercorl|rerla| lole|s & Resorls, ANA CroWre P|aza, lo||day lrr, lo||day lrr Resorl ard
ANA lole|s lrlerral|ora|.
Ex|sr|ng 0omper|r|ve lore|s
Tr|s secl|or locuses or lre corpel|l|ve sel ol role|s Wr|cr lre ANA CroWre P|aza Kooe |s oercrrar|ed
aga|rsl. Tre corpos|l|or ol lre corpel|l|ve sel |s oased or d|scuss|ors W|lr lre role| raragererl ol ANA
CroWre P|aza Kooe ard corpr|ses role|s W|lr|r lre calegory ol role|s |r 3r|r Kooe, 3arror|ya ard Kooe
8ay area.
E-46
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
ANA CroWre P|aza Kooe ard lre corpel|l|ve sel ol role|s are |derl|l|ed as lo||oWs:
Property Rooms 0perator
ANA 6rowne P|aza Kobe 593 |hC ANA hote|s Croup
Porlop|a lole| Z15 Kooe Porlop|a lole|, lrc.
0|ura Kooe 1Z5 0|ura
0r|erla| lole| 11 P|ar 0o 3ee, lrc.
Kooe Ver||er Par| 0r|erla| lole| 319 Kooe Ver||er Par| 0r|erla| lole|
lole| CroWr Pa|a|s Kooe 229 lVl lole| 0roup
Kooe 8ay 3reralor lole| & ToWers 2Z lNA Kooe, lrc.
La 3u|le Kooe laroor|ard Z0 3Ll 0roup
Tota| Number of Rooms 2,823
3ource: lole| lrlorral|or Trave| 3ysler (llT3), JLL
Tre corpel|l|ve group|rg (|rc|ud|rg lre ANA CroWre P|aza Kooe) corpr|ses a r|x ol |rlerral|ora| (89
roors or 33.5) ard doresl|c (1,Z25 roors or .5) orarded producl. Vosl ol lre corpel|lors are
|ocaled |r lre Kooe oay area ard lre average roor ruroer |s 3Z0.
Perlormance ol 0omper|r|ve $er
Tre lo||oW|rg grapr sroWs lre perlorrarce ol ANA CroWre P|aza Kooe lror Jaruary lo 0eceroer 2013,
as corpared lo |ls corpel|l|ve sel lror 3TR 0|ooa|. Tre corpel|l|ve sel ol role|s |rc|udes lre lo||oW|rg:
3reralor lole| & ToWers Kooe 8ay
0|ura Kooe
Cr| sur lole| Kooe
P|ease role lral lre corpel|l|ve sel as sroWr |r lre lo||oW|rg grapr |s d|llererl lror lre aoove corpel|l|ve
sel lao|e as or|y a leW role|s |r lre corpel|l|ve sel lao|e parl|c|pale |r 3TR 0|ooa|.
RevPAR ol lre ANA CroWre P|aza Kooe ras oulperlorred lre corpel|lor sel lor a|| rorlrs ol 2013 W|lr
RevPAR averag|rg JPY 9,000 as corpared lo lre corpel|lor sel Wr|cr recorded ar average ol JPY Z,883
dur|rg lre year.
0
1,000
2,000
3,000
1,000
5,000
,000
Z,000
8,000
9,000
10,000
11,000
12,000
J
a
r
2
0
1
3
F
e
o
2
0
1
3
V
a
r
2
0
1
3
A
p
r
2
0
1
3
V
a
y
2
0
1
3
J
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r
2
0
1
3
J
u
|
2
0
1
3
A
u
g
2
0
1
3
3
e
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2
0
1
3
0
c
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2
0
1
3
N
o
v
2
0
1
3
0
e
c
2
0
1
3
R
e
v
P
A
R
(
J
P
Y
)
ANA 6rowne P|aza Kobe RevPAR 2013
ANA CroWre P|aza Kooe RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-47
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol /h/ 0roune P|aza rooe
8trengths weaknesses
3lao|e accorrodal|or derard v|a oolr
ous|ress ard |e|sure guesls
0|recl correcl|or lo JR 3r|r Kooe slal|or
we||-eslao||sred orard rares ol ANA
(0oresl|c) ard CroWre P|aza (lrlerral|ora|)
Access lror lre C80 ard lre Kooe 8ay area
|s cra||erg|rg, as corpared lo olrer
corpel|l|ve role|s
Roors |r reed ol soll reluro|srrerl
8alrroors requ|re rard reroval|or
wedd|rgs ard oarquel ous|ress |s a r|gr|y
corpel|l|ve segrerl
8arquel ra||s |r reed ol reluro|srrerl
Age ol lre ou||d|rg (25 years o|d)
0pportun|t|es Threats
Polerl|a| lor lurlrer A0R groWlr srou|d a
reluro|srrerl ol lre oalrroors oe corp|eled
Allracl rore VlCE everls W|lr ar
|rprovererl ol oarquel lac|||l|es
lrcrease |r derard lor red|ca| lour|sr ard
red|ca| lours ard polerl|a||y largel |org slay
v|s|lors
Expecled cap|la| experd|lure requ|red |r lre
lulure lo |rprove lre qua||ly ol gueslroors
E-48
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 18
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
6 Sydney Market Overview
.1 Execut|ve 8ummary
3ydrey |s lre rajor galeWay lo Auslra||a ard a |ey ruo lor lre As|a Pac|l|c reg|or. Farous lor |ls raroour,
lre c|ly ollers exlers|ve sropp|rg, erlerla|rrerl ard d|r|rg exper|erces as We|| as courl|ess surl oeacres
W|lr|r lre W|der relropo||lar area. Auslra||a's rosl popu|ous c|ly W|lr arourd 1.1 r||||or res|derls, |l |s a
l|rarc|a| cerlre ard pr|rary rea| eslale rar|el |r lerrs ol quarlur ard va|ue, rel|ecled |r lre
corcerlral|or ol |rsl|lul|ora| |rveslrerl |r lre c|ly.
3ydrey C|ly |s lre |argesl accorrodal|or cerlre |r Auslra||a W|lr 11 eslao||srrerls W|lr 20,292 roors
as al lre erd ol Jure 2013. lole|s corpr|se lre |argesl proporl|or ol lre accorrodal|or rar|el,
accourl|rg lor 0 ol lola| roors. Tr|s |s lo||oWed oy role|s (21.Z) ard serv|ced aparlrerls (18.3).
0ver lre pasl ler years, 3ydrey C|ly accorrodal|or rar|el ras recorded rodesl reverue per ava||ao|e
roor (RevPAR) groWlr averag|rg oy 5.1 per arrur. 8er|gr |rcreases |r supp|y rave oeer ollsel oy
slrerglrer|rg derard resu|l|rg |r occuparcy |eve|s |rcreas|rg, up lror Z2.2 |r 2002 lo 81. |r 2012.
0ccuparcy |eve|s pea|ed |r 2011 al 85.8 oul rave dec||red rarg|ra||y over lre pasl year. Roor rales
rave a|so |rcreased al ar average rale ol 3.1 per arrur over lre pasl decade ard .Z over lre pasl
lrree years. Tr|s rel|ecls lre record r|gr occuparcy |eve|s Wr|cr rave oeer ev|derl dur|rg lr|s l|re.
.2 Austra||a Econom|c Harket 0verv|ew
Austra||a: Econom|c |nd|cators
2010 2011 2012 2013 2014F 2015F 201F
Rea| 00P groWlr () 2.25 2.58 3.59 2.13 2.91 2.93 2.Z
00P (u30 o||||ors, PPP) Z92.Z1 813.1Z 812.35 82.82 888.23 911.21 938.9
00P Per Cap|la (u30, PPP) 3,802 3Z,38 38,323 38,8Z 39,22 10,392 11,080
Corsurer Pr|ce lrdex ( crarge) 2.92 3.30 1.Z 2.15 3.01 2.8 2.Z
Excrarge Rale (LCu / u30) 0.98 0.98 0.9 1.13 1.11 1.10 1.13
urerp|oyrerl Rale () 5.22 5.08 5.23 5. 5.91 5.1 5.2Z
Popu|al|or (r||||or) 21.51 21.Z 21.98 22.20 22.12 22.3 22.85
3ource: 0xlord Ecoror|cs, F= Forecasl
Tre 2011-15 8udgel Was re|eased |r r|d-Vay. ll arrourced a ruroer ol experd|lure culs ard |r|l|al|ves
lo |rcrease reverues |rlerded lo relurr lre l|sca| pos|l|or oac| lo oa|arce oy 2018-19. lrporlarl|y lor lre
ecoror|c oul|oo|, lre ou|| ol experd|lure culs W||| la|| |r 201-1Z Wrer lre ecorory |s expecled lo oe
groW|rg s||grl|y lasler lrar lrerd. Tr|s app||es lo rear|y 0 ol lre lola| Au0 18 o||||or reducl|or |r
sperd|rg p|arred over lre rexl lrree years.
Corsequerl|y, Wr||e corsurer sperd|rg |s expecled lo rave rade a so||d corlr|oul|or lo 01 00P groWlr,
|l |s lorecasl lo soller over lre cor|rg rorlrs. Tral sa|d, acl|v|ly W||| rece|ve a gradua| ooosl over lre
course ol lre year lror expars|orary rorelary po||cy, r|s|rg goverrrerl |rlraslruclure sperd|rg ard |asl
year's deprec|al|or |r lre lrade-We|grled excrarge rale.
00P |s expecled lo groW oy 0.Z or lre quarler |r 01, doWr s||grl|y lror lre 0.8 r|se recorded |r 01.
Tr|s Wou|d rar| lre e|grlr corsecul|ve quarler ol oe|oW lrerd groWlr (Wr|cr |s arourd 0.9). 0r lre
E-49
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 19
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
pos|l|ve s|de, exporl vo|ures are r|s|rg |r resporse lo a surge |r r|r|rg |rveslrerl over lre pasl l|ve years,
ard a recover|rg rous|rg rar|el |oo|s sel lo ra|e a |arger corlr|oul|or lo 00P groWlr lr|s year.
0xlord Ecoror|cs expecls arrua| 00P groWlr lo r|se rodesl|y lo 2.9 lr|s year ard rexl. loWever, lr|s
assures a lurlrer deprec|al|or |r Au0 over lre rexl 18 rorlrs as We|| as a susla|red p|c|-up |r ror-
r|r|rg |rveslrerl. w|lroul lrose supporls, lrere |s a r|s| lral 00P groWlr cou|d s|oW srarp|y |r 2015-1,
W|lr |rleresl rales expecled lo rera|r al r|slor|c |oWs We|| |rlo 2015.
.3 Tour|sm 0verv|ew
3ydrey allracls a cors|derao|y r|grer proporl|or ol |rlerral|ora| v|s|lor r|grls Wrer corpared lo
Auslra||a's average ol 3Z. lr 2013, 83.8 r||||or v|s|lor r|grls Were sperl |r 3ydrey Tour|sr Reg|or
Wr|cr represerls 1.8 ol a|| v|s|lor r|grls sperl |r Auslra||a, up lror 11.0 |r 2003. lrlerral|ora| v|s|lor
r|grls accourled lor Z3.1 (1.5 r||||or) ard doresl|c r|grls 2. (22.3 r||||or).
lnrernar|ona| v|s|ror /rr|va|s
lrlerral|ora| v|s|lor arr|va|s lo 3ydrey greW oy a CA0R ol 2.1 over lre |asl ler years, lola|||rg a record
2.8 r||||or v|s|lors |r 2013 ard represerl|rg ar |rcrease ol .1 y-o-y, W|lr slrorg groWlr |r v|s|lal|or lror
As|a ard u3A. Tre |argesl source rar|el lo 3ydrey |s Va|r|ard Cr|ra Wr|cr accourled lor approx|rale|y
1Z.5 ol lola| v|s|lor r|grls |r 2013. Va|r|ard Cr|ra ras a|so recorded lre slrorgesl groWlr over lre pasl
ler years |rcreas|rg al ar average rale ol 11.8.
0omesr|c v|s|ror /rr|va|s
0oresl|c arr|va|s lo 3ydrey rave |rcreased or average oy 0.5 over lre pasl decade, W|lr s||grl|y r|grer
groWlr over lre pasl l|ve years, |rcreas|rg oy 1. per arrur. 3ydrey's rajor doresl|c source rar|els
|r 2013 Were reg|ora| NeW 3oulr wa|es (33.3), Ve|oourre (12.9) ard reg|ora| 0ueers|ard (10.1).
2.30
2.50
2.58 2.0
2.1
2.5Z
2.51
2.2
2.53
2.5
2.82
-30
-20
-10
0
10
20
30
10
50
0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
A
r
r
u
a
|
0
r
o
W
l
r
(
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N
u
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|
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|
l
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s
(
r
|
|
|
|
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)
|nternat|ona| V|s|tor Arr|va|s to 8ydney
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: Tour|sr Researcr Auslra||a
E-50
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 50
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0ver lre pasl ler years, v|s|lal|or lror rosl doresl|c source rar|els ras dec||red, roWever reg|ora|
3oulr Auslra||a, Tasrar|a ard reg|ora| 0ueers|ard rave recorded groWlr |rcreas|rg or average oy 3.9,
3.1 ard 2.0 per arrur respecl|ve|y.
/verage lengrn ol $ra,
Accord|rg lo Tour|sr Researcr Auslra||a (TRA), lre average |erglr ol slay lor doresl|c ard |rlerral|ora|
v|s|lors |r 3ydrey |r 2013 Was 2.Z r|grls ard 21.8 r|grls respecl|ve|y. Tre r|gr average |erglr ol slay lor
|rlerral|ora| segrerl rel|ecls lre d|slarce lo Auslra||a lror rosl |roourd source rar|els, as a |org rau|
desl|ral|or, as We|| as lre |rpacl ol lre educal|or segrerl Wrere slays are |erglrered.
0ver lre pasl decade, lre average |erglr ol slay lor doresl|c v|s|lors ras recorded a s||grl dec||re, Wr||sl
|rcreas|rg lor lre |rlerral|ora| segrerl, up lror 15.3 r|grls |r 2003. Tre average |erglr ol slay lor
doresl|c v|s|lors pea|ed |r 200Z al 2.9 r|grls ard |r 2011 lor |rlerral|ora| v|s|lors al 22.0 r|grls.
Z.9Z
Z.83
Z.3
Z.81
Z.39
Z.9
.9Z
Z.3
Z.Z5 Z.Z8
8.31
-10
-30
-20
-10
0
10
20
30
10
0.0
1.0
2.0
3.0
1.0
5.0
.0
Z.0
8.0
9.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
A
r
r
u
a
|
0
r
o
W
l
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)
N
u
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0omest|c V|s|tor Arr|va|s to 8ydney
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: Tour|sr Researcr Auslra||a
0.0
2.0
1.0
.0
8.0
10.0
12.0
11.0
1.0
18.0
20.0
22.0
21.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
N
u
r
o
e
r
o
l
d
a
y
s
8ydney Tour|sm - Average Length of 8tay
lrlerral|ora| 0oresl|c
3ource: Tour|sr Researcr Auslra||a
E-51
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 51
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Seograpn|c Dr|g|n
8ased or |alesl slal|sl|cs lror TRA, Va|r|ard Cr|ra corl|rues lo oe 3ydrey's rajor |roourd source
rar|el W|lr v|s|lor r|grls reg|sler|rg y-o-y groWlr ol 9.2 |r 2013. v|s|lor r|grls lror Va|r|ard Cr|ra rave
recorded slrorg groWlr over lre pasl decade |rcreas|rg or average oy 11.8 per arrur, up lror 2.Z
r||||or |r 2003 lo 10.8 r||||or |r 2013. Va|r|ard Cr|ra ras oeer 3ydrey's rajor source rar|el s|rce 2005
a|lrougr a r|gr proporl|or ol lr|s v|s|lor r|grl derard |s educal|or re|aled.
0lrer rajor source rar|els |rc|ude ur|led K|rgdor, Korea, Japar, u3A ard NeW Zea|ard W|lr a|| l|ve
rar|els caplur|rg grealer lrar 5.0 rar|el srare |r 2013.
0roWlr |r 2013 Was slrorgesl lor v|s|lors lror Ta|War, u3A ard 3|rgapore W|lr groWlr rarg|rg oelWeer
15 ard 15. v|s|lal|or lror Ta|War acr|eved |ls r|gresl year or record ard u3A |ls' r|gresl year s|rce
2002.
Cr|ra, 1Z.5
ur|led
K|rgdor,
9.8
Korea, Z.2
Japar, 5.8
NeW Zea|ard,
1.8
u3A,
5.
0errary, 2.8
lorg Korg, 2.5
lrdores|a, 2.2
Tra||ard, 1.8
Ta|War, 2.1
0lrers, 3Z.5
Top 10 8ource Harkets |n 2013 - y 6ountry of Res|dence
3ource: Tour|sr Researcr Auslra||a
0.0
2.0
1.0
.0
8.0
10.0
12.0
11.0
1.0
18.0
20.0
22.0
21.0
N
u
r
o
e
r
o
l
v
|
s
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Top 10 8ource Harkets to 8ydney |n 2013 - y 6ountry of Res|dence
2012 2013
3ource: Tour|sr Researcr Auslra||a
E-52
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 52
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Purpose ol v|s|r - lnrernar|ona| v|s|ror h|gnrs
lo||day ard educal|or v|s|lors accourl lor lre |argesl proporl|or ol |rlerral|ora| v|s|lor r|grls |r 3ydrey.
Farous lor |ls raroour, lre c|ly ollers exlers|ve sropp|rg, erlerla|rrerl ard d|r|rg exper|erces as We|| as
courl|ess surl oeacres W|lr|r lre W|der relropo||lar area. As sucr |l |s W|de|y regarded as a rusl-see
lour|sl desl|ral|or ard W|de|y largeled oy |rlerral|ora| sluderls, rolao|y lror As|a.
lr 2013 ro||day v|s|lors corpr|sed 30.Z ol a|| |rlerral|ora| v|s|lor r|grls sperl |r 3ydrey. Educal|or
v|s|lors accourled lor a lurlrer 2. ol lola| v|s|lor r|grls, lo||oWed oy lrose v|s|l|rg lr|erds ard re|al|ves
(vFR) (20.2), erp|oyrerl (12.3), ous|ress (5.5) ard VlCE (0.). As oul||red |aler |r lr|s reporl,
lre deve|oprerl ol lre lrlerral|ora| Corverl|or Cerlre 3ydrey |s |||e|y lo see VlCE derard |r 3ydrey
|rcrease W|lr lr|s segrerl r|slor|ca||y re|d oac| oy lre s|ze ard |ac| ol ava||ao|||ly al lre ex|sl|rg lac|||ly.
Purpose ol v|s|r - 0omesr|c v|s|ror h|gnrs
v|s|l|rg lr|erds ard re|al|ves (vFR) accourls lor lre |argesl proporl|or ol doresl|c v|s|lor r|grls |r 3ydrey,
corpr|s|rg 10.1 ol a|| doresl|c v|s|lor r|grls sperl |r 3ydrey |r 2013. lo||day v|s|lors accourled lor a
lurlrer 28.1 ol lola| v|s|lor r|grls |r 2013, lo||oWed oy ous|ress (1Z.1), erp|oyrerl (3.1), VlCE
(1.) ard educal|or (1.1).
wr||e doresl|c v|s|lor r|grls dec||red |r 2012 as g|ooa| ecoror|c urcerla|rly re-|gr|led, v|s|lor r|grls
|rcreased oy 2.1 |r 2013 corpared lo lre prev|ous year Wr|cr |s supporled oy lre groWlr |r lre ro||day
ard erp|oyrerl seclors. Tre groWlr |r ro||day/ |e|sure v|s|lal|or ras pos|l|ve|y |rpacled lre pa|d
accorrodal|or segrerl Wr|cr |rcreased 3.9 over lre sare per|od.
lo||day / P|easure,
30.Z
vFR, 20.2
8us|ress, 5.5
VlCE, 0.
Educal|or, 2.
Erp|oyrerl, 12.3
0lrer, 3.9
|nternat|ona| V|s|tors - Purpose of V|s|t 2013
lo||day / P|easure vFR 8us|ress VlCE Educal|or Erp|oyrerl 0lrer
3ource: Tour|sr Researcr Auslra||a
E-53
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 53
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
re, 0emano 0r|vers
3ydrey |s lre rajor galeWay lo Auslra||a ard a |ey ruo lor lre As|a Pac|l|c reg|or. Farous lor |ls raroour,
lre c|ly ollers exlers|ve sropp|rg, erlerla|rrerl ard d|r|rg exper|erces as We|| as courl|ess surl oeacres
W|lr|r lre W|der relropo||lar area. Auslra||a's rosl popu|ous c|ly W|lr arourd 1.1 r||||or res|derls, |l |s
Auslra||a's l|rarc|a| cerlre ard pr|rary rea| eslale rar|el |r lerrs ol quarlur ard va|ue, rel|ecled |r lre
corcerlral|or ol |rsl|lul|ora| |rveslrerl |r lre c|ly.
Trere are severa| rajor projecls urder corslrucl|or ard proposed |r 3ydrey C|ly Wr|cr W||| |rcrease lre
appea| ol lre c|ly as a lour|sl desl|ral|or. loWever, lre c|ly slards lo oerel|l rosl lror lre 8arargaroo
redeve|oprerl (Easl 0ar||rg laroour) as |l W||| crarge lre dyrar|cs ol lre c|ly oy exlerd|rg ard |rprov|rg
lre arerao|||ly ol lre 0ar||rg laroour prec|rcl, as We|| as |rcreas|rg correrc|a| oll|ce space.
3ydrey |s a rajor VlCE desl|ral|or. Aller rary years ol |racl|or, lre deve|oprerl ol lre lrlerral|ora|
Corverl|or Cerlre 3ydrey |s urderWay. P|arr|rg corserl Was grarled lor reW Wor|d-c|ass corverl|or,
exr|o|l|or ard erlerla|rrerl lac|||l|es ard |rproved puo||c spaces al 0ar||rg laroour, as parl ol lre NeW
3oulr wa|es (N3w) 0overrrerl's v|s|or lo rev|la||se lre area ard represerl|rg a |ardrar| projecl lor
3ydrey. Tre ex|sl|rg corlererce ard exr|o|l|or lac|||l|es c|osed |r 0eceroer 2013 ard corslrucl|or |s roW
urderWay. Tre reW lac|||l|es W||| oe corp|eled |r 201 ard W||| lealure a cors|derao|y exparded cerlre
Wr|cr |s ao|e lo rur ru|l|p|e corcurrerl everls W|lr ar average s|ze ol 500 de|egales per reel|rg. wrer
ru|l|p|e everls are operal|rg, lre ellecl or lre accorrodal|or rar|el W||| oe s|r||ar lo a 'c|ly-W|de' everl
W|lr |rcreases |r occuparcy ard A0R arl|c|paled.
lrlraslruclure N3w ras deve|oped a 3ydrey-W|de so|ul|or lo ersure N3w's everls |rduslry corl|rues lo
|ead lre ral|or dur|rg lre redeve|oprerl. 3ydrey 0|yrp|c Par|, Voore Par|, 3ydrey's role|s, Auslra||ar
Tecrro|ogy Par|, lorderr Pav|||or, Roya| RardW|c|, Lura Par| ard A||prores Arera W||| a|| p|ay
exparded ro|es |r rosl|rg corlererces, sra||er exr|o|l|ors ard erlerla|rrerl. A lerporary exr|o|l|or
lac|||ly ras a|so oeer corslrucled al 0|eoe ls|ard.
Tre NeW 3oulr wa|es goverrrerl ras a|so g|ver CroWr L|r|led lre approva| lo go lo lre rexl slage |r
deve|op|rg CroWr 3ydrey al 8arargaroo. Tre proposed Au01.5 o||||or |uxury resorl ard vlP-or|y cas|ro
or lre c|ly's raroours|de Was lavoured oy lre N3w goverrrerl, aread ol ar Au01.1 o||||or o|d lror |ls
corpel|lor, cas|ro operalor Ecro Erlerla|rrerl. Tre projecl |s expecled lo oper |r 2019.
lo||day / P|easure,
28.1
vFR, 10.1
8us|ress, 1Z.1
VlCE, 1.
Educal|or, 1.1
Erp|oyrerl, 3.1
0lrer, Z.9
0omest|c V|s|tors - Purpose of V|s|t 2013
lo||day / P|easure vFR 8us|ress VlCE Educal|or Erp|oyrerl 0lrer
3ource: Tour|sr Researcr Auslra||a
E-54
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 51
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
3ydrey A|rporl |s Auslra||a's |argesl a|rporl |r lerrs ol passerger ard lre|grl rovererls oul or|y covers
90Z reclares ol |ard, ra||rg |l lre sra||esl cap|la| c|ly a|rporl |r lerrs ol |ardro|d|rg. ll |s |ocaled e|grl
|||orelres soulr ol lre 3ydrey C80 ard ras a good urdergrourd ra|| ||r| lo lre c|ly cerlre lror lre
doresl|c ard |rlerral|ora| lerr|ra|s.
3ydrey A|rporl |s Auslra||a's ous|esl a|rporl, allracl|rg rore lrar 38.0 r||||or passerger rovererls |r
2013 W|lr 25.2 r||||or doresl|c ard reg|ora| passerger rovererls (. ) ard 12.9 r||||or |rlerral|ora|
passerger rovererls (33.9). lrlerral|ora| serv|ces rave recorded lre slrorgesl groWlr over lre pasl
decade W|lr passerger rovererls |rcreas|rg or average oy 5.0 per arrur, corpared lo doresl|c
serv|ces' groWlr ol 1.3 per arrur. lr 0eceroer 2012, 3ydrey A|rporl opered a reW 1,500 square reler
exlers|or ol lre T2 lerr|ra|, add|rg 28 capac|ly ard a||oW|rg rore carr|ers lo use W|de-ood|ed a|rcrall
lor doresl|c serv|ces.
3ydrey A|rporl |s prepar|rg a reW Vasler P|ar lo suor|l lo lre Auslra||ar 0overrrerl oy lre erd ol 2013.
A Pre||r|rary 0rall Vasler P|ar (P0VP) ras oeer prepared ard Was puo||c|y exr|o|led url|| 30 Augusl
2013. Tre P0VP dela||s 3ydrey A|rporl's v|s|or lo erao|e lre lorecasl groWlr |r a|r lrave| lor lour|sr ard
lrade We|| oeyord 2033 Wr||sl a|so ra|rla|r|rg currerl reslr|cl|ors re|al|rg lo curleW, a|rcrall rovererl
caps ard ro|se srar|rg arrargererls. Tre deve|oprerl corcepl proposes lre |rlegral|or ol |rlerral|ora|,
doresl|c ard reg|ora| passerger lerr|ra| operal|ors, as We|| as lre creal|or ol lrarsporl |rlercrarges.
3ydrey A|rporl Corporal|or expecl lral lre proposed deve|oprerl W||| |rprove lre overa|| a|rporl
exper|erce oy |rprov|rg passerger correcl|v|ly oy reduc|rg |rler-prec|rcl lrarslers ard |rprov|rg lrall|c
l|oW or roads |r ard arourd lre a|rporl apror.
.4 Accommodat|on Harket 0verv|ew
locar|on 3r|el
3lal|sl|cs perla|r|rg lo lre supp|y ard perlorrarce ol 3ydrey's accorrodal|or rar|el rave oeer sourced
lror lre Auslra||ar 8ureau ol 3lal|sl|cs' (A83) 3urvey ol Tour|sl Accorrodal|or (3TA) Wr|cr Was
corducled or a quarler|y oas|s url|| Jure 2013 ard ras roW roved lo ar arrua| survey, as parl ol a
deparlrerl W|de |r|l|al|ve lo reduce cosls.
Accord|rg lo lre A83, lrere Were 33,Z21 accorrodal|or roors al lre erd ol Jure 2013 |r 3ydrey
Tour|sr Reg|or, Wr|cr exlerds lror Perr|lr |r lre wesl lo lre P|llWaler |r lre Norlr ard Croru||a |r lre
3oulr. Tre rajor|ly ol accorrodal|or roors are |ocaled |r 3ydrey C|ly (20,292 roors) W|lr cors|derao|y
sra||er accorrodal|or rar|els |r areas sucr as Parraralla, Ryde, Norlr 3ydrey, 8olary 8ay, Roc|da|e
ard RardW|c|.
Ex|sr|ng lore| $upp|,
3ydrey C|ly |s lre |argesl accorrodal|or cerlre |r Auslra||a W|lr 11 eslao||srrerls corpr|s|rg 20,292
roors as al lre erd ol Jure 2013. Tr|s represerls ar average properly s|ze ol 1Z5 roors. lole|s corpr|se
lre |argesl proporl|or ol lre accorrodal|or rar|el, accourl|rg lor 0 ol lola| roors.
Accorrodal|or roor supp|y |r 3ydrey ras recorded lWo s|gr|l|carl per|ods ol groWlr oelWeer 1989 lo
1992 ard 1998 lo 2001 Wrer supp|y |rcreased oy 1,201 roors (11) ard 3,51 roors (20) respecl|ve|y.
Tre c|ly a|so exper|erced a s|gr|l|carl reducl|or |r accorrodal|or supp|y oelWeer 2002 ard 2003 Wrer
913 roors (5) Were la|er oul ol sloc| lor corvers|or lo a|lerrale use. Lard|oc|ed oy lre raroour,
E-55
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 55
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
deve|oprerl s|les |r 3ydrey C80 are ||r|led. Tr|s ras |ed lo lre groWlr ol correrc|a| cerlres across lre
oroader relropo||lar area.
Furure lore| $upp|,
Trere Were lrree role| oper|rgs |r 3ydrey C|ly |r 2013 |rc|ud|rg Adge Aparlrerl lole| (12 roors, Jure
2013), lole| 1888 (90 roors, Ju|y 2013) ard Zara Aparlrerls (38 roors, Ju|y 2013). we are a|so aWare
ol lWo exlers|ors al lre 3eoe| P|er 0re (30 roors, Jaruary 2013) ard Four Po|rls oy 3reralor 0ar||rg
laroour (11 roors, 0clooer 2013).
we rave a|so |derl|l|ed lWo proposed projecls lrougrl |||e|y lo correrce |r lre srorl lerr |rc|ud|rg lre
corvers|or ol ar oll|ce ou||d|rg |rlo a 3-slar role| (282 roors) ard a 0-roor 1-slar ooul|que role| |ocaled
|r lre Frasers Cerlra| Par| deve|oprerl Wr|cr are proposed lo oe corp|eled oy 2015. 3lar calegor|es are
approx|ral|ors W|lr lre l|ra| c|ass|l|cal|or lo oe dec|ded upor oper|rg.
0lrer red|ur lerr rajor projecls |rc|ude lre deve|oprerl ol lre lrlerral|ora| Corverl|or Cerlre role|
(590 roors) ard lre corslrucl|or ol a secord loWer al lre Four Po|rls oy 3reralor (231 roors). 8olr
projecls W||| oe urderp|rred oy lre deve|oprerl ol assoc|aled corverl|or |rlraslruclure.
Tre Four Po|rls W||| a|so rouse 1,810 square relres ol p|||ar-|ess exr|o|l|or ard corlererce space lor up
lo 3,000 de|egales sp||l oelWeer lWo oa||roors ard e|ever orea|oul areas. Corslrucl|or |s expecled lo
slarl loWards lre erd ol 2011 ard |s scredu|ed lor corp|el|or |r 201.
Varker w|oe lore| Trao|ng Perlormance
0ver lre pasl ler years, 3ydrey C|ly accorrodal|or rar|el ras recorded rodesl RevPAR groWlr
|rcreas|rg or average oy 5.1 per arrur. Roor supp|y ras rera|red la|r|y slao|e dur|rg lr|s per|od,
|rcreas|rg oy 0. per arrur. 0erard groWlr ras a|so oeer rodesl |rcreas|rg oy 1.9 per arrur ard
corsequerl|y occuparc|es rave |rcreased, up lror Z2.2 |r 2002 lo 81. |r 2012. 0ccuparcy |eve|s
pea|ed |r 2011 al 85.8 oul rave dec||red rarg|ra||y over lre pasl year.
A0R groWlr ras averaged 3.1 per arrur over lre pasl decade ard .Z over lre pasl lrree years.
Tr|s rel|ecls lre record r|gr occuparcy |eve|s Wr|cr rave oeer ev|derl dur|rg lr|s l|re. Nor|ra| A0R |r
2012 Was approx|rale|y 5.1 aoove lre pre-0|ooa| F|rarc|a| Cr|s|s r|gr ol Au0185 recorded |r 2008.
19,833 19,8 19,8Z2
20,39 20,39 20,550 20,550
20,892
21,199
181
0 312
30Z
Z1
8,000
10,000
12,000
11,000
1,000
18,000
20,000
22,000
2009 2010 2011 2012 2013 2011 2015 201 201Z
N
u
r
o
e
r
o
l
R
o
o
r
s
Add|t|ons to Accommodat|on 8upp|y |n 8ydney (2009- 2017}
Ex|sl|rg 3upp|y Fulure Roors 3upp|y
3ource: JLL, lrduslry 3ources
E-56
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 5
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
As al YT0 Apr|| 2011, occuparcy |eve|s |r 3ydrey rave |rcreased rarg|ra||y lo 88.5 (2.5). Aga|rsl lr|s
oac|drop A0R ras recorded rodesl ga|rs, |rcreas|rg oy .8 lo Au0233 resu|l|rg |r RevPAR groWlr ol
9.1 lo Au020Z. Jaruary Was a parl|cu|ar|y slrorg rorlr W|lr 1Z.3 RevPAR groWlr corpared lo lre
prev|ous year.
$easona||r,
Ara|ys|s ol lre rorlr|y occuparcy |eve|s |r 3ydrey c|ly role|s sroWs lral occuparcy |eve|s lyp|ca||y pea|
|r Feoruary ard Varcr ard aga|r |r 0clooer ard Noveroer. Trese rorlrs lerd lo oe lre slrorg per|ods
lor |e|sure lrave|, as We|| as corlererces ard exr|o|l|ors.
0
10
20
30
10
50
0
Z0
80
90
100
S0
S50
S100
S150
S200
S250
2001 2002 2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 YT0
Apr
2013
YT0
Apr
2011
0
c
c
u
p
a
r
c
y
(
)
A
0
R
/
R
e
v
P
A
R
(
A
u
0
)
8ydney Accommodat|on Harket - Harket w|de Performance
A0R (Au0) RevPAR (Au0) 0ccuparcy () 3ource: A83, 3TR 0|ooa|
5
Z0
Z5
80
85
90
95
100
Jar Feo Var Apr Vay Jur Ju| Aug 3ep 0cl Nov 0ec
0
c
c
u
p
a
r
c
y
8easona||ty - 0ccupancy 7
2001 2005 200 200Z 2008
2009 2010 2011 2012
3ource: Auslra||ar 8ureau ol 3lal|sl|cs
E-57
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 5Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Ex|sr|ng $erv|ceo /parrmenr $upp|,
Accord|rg lo lre Auslra||ar 8ureau ol 3lal|sl|cs, lrere Were ,218 serv|ced aparlrerl roors |r 3ydrey
Tour|sr Reg|or al lre erd ol Jure 2013, Wr|cr represerls approx|rale|y 18.3 ol lre lola|
accorrodal|or supp|y.
lr resporse lo urprecederled groWlr |r derard lor res|derl|a| |rveslrerl |r lre |ale 1990s lo r|d- 2000s
ard coup|ed W|lr lre d|ll|cu|l|es ol ra|s|rg cap|la| lor lrad|l|ora| sly|e role|s, properly deve|opers lurred lre|r
locus loWards slrala-l|l|ed serv|ced aparlrerls. Tr|s ras a||oWed lre deve|oprerl lo oe so|d doWr or a
'rela|| oas|s as |rd|v|dua| slrala ur|ls lo |rd|v|dua| pr|vale |rveslors ralrer lrar or a 'Wro|esa|e oas|s as a
|arger correrc|a| |rveslrerl. 0ver lre per|od lo 200Z, lr|s oWrersr|p slruclure reduced r|s| ard
|rproved deve|oprerl relurr lo lre po|rl ol projecl v|ao|||ly |r se|ecl rar|els. T|grler|rg cred|l rar|els
over suosequerl years ras resu|led |r lre rela|| |rveslor rar|el corlracl|rg s|gr|l|carl|y, |rpacl|rg lre
v|ao|||ly ol lr|s 'se|| doWr producl.
3erv|ced aparlrerls rave recorded rodesl roor supp|y groWlr |r 3ydrey Tour|sr Reg|or over lre pasl
decade W|lr roors |rcreas|rg al ar average rale ol 2.3 per arrur over lre ler years lo 2012. Vajor
serv|ced aparlrerl operalors |rc|ude Varlra, 0uesl Aparlrerl, Toga losp|la||ly, 0a|s lole|s ard Resorls
ard Ver|lor Aparlrerls. we role lral sore role| operalors rave a|so recerl|y eroraced lr|s groWlr
segrerl, rosl rolao|y Accor lrrougr lre acqu|s|l|or ol V|rvac lole|s & Resorls |r |ale 2011 ard roW
operale aparlrerls urder lre 3eoe| ard 0rard Vercure orards.
Furure $erv|ceo /parrmenr $upp|,
Add|l|ors lo 3ydrey C|ly supp|y rave oeer ||r|led |r recerl years W|lr lre oper|rg ol Adge Aparlrerl
lole| (12 roors, Jure 2013) ard Zara Aparlrerls (38 roors, Ju|y 2013). we are uraWare ol ary
upcor|rg reW serv|ced aparlrerl deve|oprerls |r lre p|pe||re.
.5 |nvestment Harket
Arourd Au0 1.Z o||||or Worlr ol role|s rave crarged rards |r lre 3ydrey Tour|sr Reg|or over lre pasl
decade. Tre 3ol|le| 3ydrey werlWorlr |s lre or|y rajor lrarsacl|or |r 3ydrey lor lre year lo dale.
Recent 8ydney hote| Transact|ons
. Harket 0ut|ook
As Auslra||a's rajor galeWay, 3ydrey allracls a r|gr proporl|or ol |rlerral|ora| v|s|lors Wrer corpared lo
lre Auslra||ar average. Tre c|ly a|so ooasls a |arge doresl|c v|s|lor segrerl, oe|rg oolr lre pr|rary
Reported
Pr|ce
(AU0}
3ol|le| 3ydrey werlWorlr Vay-11 13 S201.0 r||||or S11,009 La3a||e lrveslrerls Lld Frasers Cerlrepo|rl Lld
Four 3easors lole| 3ydrey Aug-13 531 S310.0 r||||or S10,301 Eure|a Furds Varagererl V|rae Assel 0|ooa| lrveslrerls
0|ararl lole| Polls Po|rl Vay-13 Z S15.5 r||||or S203,91Z 0rcrard Furds Varagererl Corl|derl|a| doresl|c corsorl|ur
Vercure Parraralla Vay-13 11 S21.25 r||||or S129,00 Tour|sr Assel lo|d|rgs L|r|led 3r|lr Properly 0roup
lo|s K|rg 3lreel wrarl Apr-13 91 S21.1 r||||or S21,800 Tour|sr Assel lo|d|rgs L|r|led 3crWarlz Far||y Corpary Ply L|r|led
Vercure Polls Po|rl 0ec-12 22Z S3Z.0 r||||or # S13,000 Auslra|ard lr|s lole| 0roup
0oservalory lole| 3ydrey Jur-12 9 S10.0 r||||or S11,Z 0r|erl Express lole|s Largrar losp|la||ly 0roup
3rargr|-La lole| 3ydrey Jur-12 53 S330.0 r||||or S58,11 0lC Rea| Eslale Ple Lld 3rargr|-La lole|s & Resorls
Purchaser
3ource: JLL, Nole: # lole| corporerl or|y
Property
Transact|on
0ate
Rooms
Pr|ce per
room
Vendor
E-58
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 58
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
corporale cerlre |r Auslra||a ard |ey |e|sure desl|ral|or. Tr|s oroad derard oase W||| lrerelore urderp|r
lre c|ly's role| ard lour|sr rar|el |r lre cor|rg years.
lrlerral|ora| v|s|lor arr|va|s rave |rcreased al ar average rale ol 2.1 per arrur over lre pasl ler years
W|lr slrorg groWlr lror Va|r|ard Cr|ra v|s|lors, |rcreas|rg al ar average rale ol 11.8 per arrur. 0lrer
rajor source rar|els |rc|ude ur|led K|rgdor, Korea, Japar, u3A ard NeW Zea|ard W|lr a|| l|ve rar|els
caplur|rg grealer lrar 5.0 rar|el srare |r 2013. 0roWlr |s pr|rar||y oe|rg dr|ver oy lre ro||day ard
erp|oyrerl segrerls.
Farous lor |ls raroour, lre c|ly ollers exlers|ve sropp|rg, erlerla|rrerl ard d|r|rg exper|erces as We|| as
courl|ess surl oeacres W|lr|r lre W|der relropo||lar area. As sucr |l |s W|de|y regarded as a rusl-see
lour|sl desl|ral|or ard W|de|y largeled oy |rlerral|ora| sluderls, rolao|y lror As|a.
3ydrey C|ly's accorrodal|or rar|el ras recorded rodesl groWlr over lre pasl ler years. 3leady
|rcreases |r accorrodal|or derard rave oeer recorded aga|rsl a oac|drop ol |oW arrua| |rcreases |r
supp|y W|lr reW deve|oprerl gerera||y re|d oac| oy lre cosl versus va|ue gap. 0ccuparcy |eve|s rave
|rcreased cors|derao|y as a resu|l, averag|rg 85 over lre pasl lour years.
w|lr leW accorrodal|or projecls currerl|y urder corslrucl|or |r 3ydrey C|ly, lre oul|oo| rera|rs
pror|s|rg lo||oW|rg lre recovery |r derard Wr|cr ras oeer ev|derl over lre pasl lrree years. lr 2013,
rea| RevPAR |s projecled lo surpass lre 200Z-pea| as occuparcy |eve|s rera|r roousl ard A0R groWlr
slrerglrers |r ||re W|lr lre oer|gr supp|y oul|oo| ard a rore slao|e derard erv|rorrerl.
NolW|lrslard|rg, sore urcerla|rly rera|rs W|lr lre redeve|oprerl ol lre 3ydrey Corverl|or & Exr|o|l|or
Cerlre Wr|cr coro|red W|lr a |ac| ol 'o|oc|ousler' everls |r 2011 ray resu|l |r a serl|rerl-dr|ver srorl
lerr |u||, a|oe|l |arge|y urWarrarled ard W|lr ||r|led ev|derce lrus lar. 0llsell|rg lr|s, W||| oe lre
reoourd|rg doresl|c corporale segrerl as rorra| ous|ress resures lo||oW|rg lre corsurral|or ol lre
Federa| E|ecl|or |r 3epleroer 2013 ard suosequerl crarge ol goverrrerl. Tre Rolary Corverl|or |r
Jure 2011 |s a|so expecled lo prov|de a We|core ooosl lo 3ydrey's accorrodal|or rar|el.
Vajor |rlraslruclure projecls sucr as lre 8arargaroo uroar rereWa| projecl ard lre deve|oprerl ol lre
lrlerral|ora| Corverl|or Cerlre W||| prov|de ar added ooosl lo lre rar|el over lre red|ur lo |org lerr.
Tr|s |s a|so |||e|y lo crarge lre c|ly dyrar|cs W|lr a sr|ll loWards lre Weslerr corr|dor |r 3ydrey.
.7 Fraser 8u|tes 8ydney
Fraser 3u|les 3ydrey |s ar a||-su|le role| slraleg|ca||y |ocaled |r lre rearl ol 3ydrey rexl lo 3ydrey ToWr
la|| ard Wa|||rg d|slarce lo lyde Par| ard 0ar||rg laroour. Nearoy allracl|ors |rc|ude rajor deparlrerl
slores, lre 0ueer v|clor|a 8u||d|rg, Walerlrorl reslaurarls al 0ar||rg laroour, lre 3par|sr 0uarler ard
Cr|raloWr. 3ydrey's r|slor|c Cap|lo| Trealre ard lre Erlerla|rrerl Cerlre are |ocaled rearoy. Ar
overv|eW ol Fraser 3u|les 3ydrey |s prov|ded |r lre lao|e oe|oW:
E-59
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 59
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Fraser 8u|tes 8ydney
Address: 188 Kerl 3lreel, 3ydrey
2000
No. Roors: 201 roors |rc|ud|rg:
55 x slud|os
111 x ore oeds
1 x lWo-oed
1 x lrree-oed
Execul|ve C|uo: Nol app||cao|e
Veel|rg 3pace: 1 reel|rg roors lor up lo 100 persors
Food & 8everage: Vezzar|re Lourge Wr|cr serves orea|lasl
0lrer Fac|||l|es: 8us|ress Cerlre, Large 0yrras|ur, 3W|rr|rg Poo|, 3pa ard 3aura
3ource: lole| Varagererl
$erv|ceo /parrmenr Dperaror lnlormar|on
Tre Fraser 3u|les 3ydrey |s operaled oy Frasers losp|la||ly. P|ease reler lo 3ecl|or 3.8 Fraser 3u|les
3|rgapore - 3erv|ced Aparlrerl 0peralor lrlorral|or lor rore |rlorral|or.
Ex|sr|ng 0omper|r|ve $er - Fraser $u|res $,one,
Tre properly-del|red corpel|l|ve sel corpr|ses a group ol l|ve properl|es, a|| ol Wr|cr are |ocaled |r
3ydrey C80's r|dloWr prec|rcl.
Property Rooms Locat|on 0perator
Fraser 8u|tes 8ydney 201 60 Frasers hosp|ta||ty
Rad|ssor lole| & 3u|les 102 C80 Car|sor As|a Pac|l|c
Par|roya| 0ar||rg laroour 310 C80 Par Pac|l|c lole|s 0roup
3W|ssole| 3ydrey 359 C80 Fa|rrorl lole|s & Resorls
l||lor lole| 5ZZ C80 l||lor lole|s
Rydges wor|d 3quare 152 C80 Rydges lole|s & Resorls
Tota| Number of Rooms 2,031
3ource: lole| Varagererl, WWW..Wol|l.cor
Tre corpel|l|ve group|rg corpr|ses a r|x ol |rlerral|ora| (1,5Z9 roors or ZZ.8) ard doresl|c (152
roors or 22.3) orarded producl. Rydges wor|d 3quare |s lre or|y doresl|c orard ard ore ol lre |arger
properl|es W|lr ar overa|| average properly s|ze ol 339 roors. Tre Fraser 3u|les 3ydrey |s ore ol lre
sra||er properl|es ard lre or|y serv|ced aparlrerl sly|ed-producl. ll |s a|so lre reWesl properly rav|rg
or|y opered |r 200 Wrere rosl olrer properl|es are al |easl ler years o|d.
Tre |derl|l|ed corpel|lors are We|| represerled oy lre rajor Auslra||ar role| operalors W|lr rolao|e
|rlerral|ora| orards |rc|ud|rg l||lor (13lr |argesl), Par|roya| (Par Pac|l|c lole|s 0roup, 21sl |argesl) ard
Rad|ssor (Car|sor lole|s, 25lr |argesl). 0peral|rg corpar|es W|lr eslao||sred |rlerral|ora| 5-slar orards
Wr|cr are rol represerled |rc|ude Accor, 3larWood lole|s & Resorls ard lyall lole|s & Resorls, a|| ol
Wr|cr operale properl|es |r olrer parls ol 3ydrey C80.
Perlormance ol 0omper|r|ve $er
Perlorrarce dala ras oeer sourced lror 3TR 0|ooa| ard prov|ded lo JLL lor 2013. A srapsrol ol lre
recerl lrad|rg perlorrarce |s prov|ded |r lre lo||oW|rg crarl ard r|gr||grls lral lre suojecl properly ras
perlorred aoove lre corpel|l|ve sel over lre pasl 12 rorlrs W|lr RevPAR averag|rg Au0 208 versus lre
corpel|lor sel ol Au0 192.
E-60
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 0
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser $u|res $,one,
8trengths weaknesses
Voderr r|gr qua||ly serv|ced aparlrerl
producl
0ererous s|ze ol lre aparlrerls
F|ex|o|e dua| |ey corl|gural|or
0ua||ly |rdoor poo| ard gyr lac|||l|es
Arp|e par||rg lor lre operal|or
Frasers |s a We||-|roWr orard |r As|a
parl|cu|ar|y arorg re|ocal|or corpar|es
Properly allracls r|gr-erd corporale |org slay
guesls
Pr|rary Auslra||ar corporale ard l|rarc|a|
cerlre
l|gr|y regarded lour|sr derard gereralors
Va|r erlry po|rl |rlo Auslra||a lor
|rlerral|ora| v|s|lors (a|r ard cru|se)
LoW recogr|l|or ol Fraser orard |r Auslra||a,
a|oe|l groW|rg
wea| d|slr|oul|or across Auslra||a
0r|y lrree ||lls ard ro ded|caled serv|ce ||ll
L|r|led F&8 oller|rg or Vezzar|re |eve| ard
ro oar
Requ|rererl lor soll roors reluro|srrerl |r
srorl lo red|ur lerr (Z years o|d)
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220
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Fraser 8u|tes 8ydney RevPAR 2013
Fraser 3u|les 3ydrey RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-61
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0pportun|t|es Threats
0roW|rg |roourd ous|ress lrrougr As|ar
relWor| g|ver r|gr orard recogr|l|or ard
projecled groWlr ol lr|s segrerl
lrcrease corlererce ous|ress & |r-rouse
v|deo corlererc|rg
0roW Frasers porllo||o lrrougr acqu|s|l|or &
deve|oprerl ard |rcrease relWor|/orard
aWareress
Ta|e-over |eased oul F&8 operal|or
Proposed rod|l|cal|ors lo lre arr|va|
exper|erce / erlry
As|ar |roourd rar|els projecled lo urderp|r
|roourd lour|sr groWlr over lre cor|rg
decade
C|ly sr|ll|rg WeslWards W|lr 8arargaroo ard
3lCEEP deve|oprerls
Re-oper|rg ol 3lCEEP |r 201Z ard groWlr |r
As|a Pac|l|c everls
Favourao|e supp|y/derard oa|arce projecled
over lre rexl l|ve years |r 3ydrey C|ly
Polerl|a| deve|oprerl ol lre Cerlra| ard
Eve|e|gr ra||Way corr|dor W||| crarge c|ly
rar|el dyrar|cs over lre |org lerr
lrlerrupl|or lo c|ly lror corverl|or cerlre
c|osure & redeve|oprerl
Recerl ard lulure p|arred roor supp|y
add|l|ors lo rearoy corpel|lors e.g. Four
Po|rls ToWer TWo
Recerl reluro|srrerl ol rearoy corpel|lors
|rc|ud|rg Par|roya| 0ar||rg laroour,
3W|ssole| & Four Po|rls
Proposed o||e |are |r Kerl 3l ard |rpacl or
lrall|c l|oWs
Producl corlus|or 3u|les versus P|ace
orards
Tre proposed deve|oprerl ol lour|sr
|rlraslruclure does rol proceed as p|arred
l|grer passerger lax or cru|se sr|ps
Auslra||ar 0o||ar rera|rs r|gr lor ar
exlerded per|od ol l|re
.8 Novote| Rockford 0ar||ng harbour
3el arorgsl 3ydrey's v|orarl 0ar||rg laroour, Novole| Roc|lord 0ar||rg laroour |s W|lr|r srorl Wa|||rg
d|slarce ol lre 0ar||rg 0uarler correrc|a| prec|rcl, K|rg 3l wrarl ard Coc||e 8ay reslaurarls ard oars,
C80 sropp|rg ard Cr|raloWr. Ar overv|eW ol Novole| Roc|lord 0ar||rg laroour |s prov|ded |r lre lao|e
oe|oW:
Novote| Rockford 0ar||ng harbour
Address: 1Z L|ll|e P|er 3lreel, 0ar||rg
laroour, N3w 2000
No. Roors: 230 roors
Execul|ve C|uo: Execul|ve Lourge
Veel|rg 3pace: 5 reel|rg roors lor up lo 110 lrealre sly|e
Food & 8everage: Ceezers Reslaurarl, 8reW Cal ard Purprouse Reslaurarl & 8ar
0lrer Fac|||l|es: 0yrras|ur, realed |ap poo| ard 21 rour ous|ress cerlre
3ource: lole| Varagererl
E-62
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 2
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lore| Dperaror lnlormar|on
Novole| Roc|lord 0ar||rg laroour operales urder a Frarcr|se Agreererl W|lr AAPC Properl|es Ply
L|r|led, Wr|cr |s ar all|||ale ol Accor As|a Pac|l|c Corporal|or (AAPC). AAPC |s lu||y oWred oy Frercr
oased Accor 3A, lre Wor|d's |argesl role| operalor.
As al 0eceroer 2012, Accor operaled |r 92 courlr|es arourd lre Wor|d, corlro|||rg 3,555 role|s ard
155,985 roors. 0l lrese, 23 ol roors (559 role|s W|lr 105,908 roors) Were |r lre As|a Pac|l|c reg|or.
Accor ollers a corprerers|ve se|ecl|or ol orards Wr|cr cover lre lu|| speclrur ol lre Auslra||ar
accorrodal|or rar|el rarg|rg lror |uxury lo oudgel/se|ecl serv|ce role|s, as We|| as ooul|que properl|es,
resorls ard serv|ced aparlrerls. 8rards |rc|ude 3ol|le|, Pu||rar, V 0a||ery, Novole|, Vercure, lo|s, lo|s
3ly|es, lo|s 8udgel ard Forru|e 0re.
Accor |s Auslra||a's |argesl operalor W|lr 202 properl|es ard 2Z,238 roors urder raragererl al lre erd
ol 2012.
Ex|sr|ng 0omper|r|ve $er - hovore| Rockloro 0ar||ng laroour
Tre role|-del|red corpel|l|ve sel corpr|ses a group ol l|ve properl|es, a|| ol Wr|cr are |ocaled |r 3ydrey's
0ar||rg laroour.
Property Rooms Locat|on 0perator
Novote| Rockford 0ar||ng harbour 230 60 Accor
Four Po|rls 3reralor 3ydrey 0ar||rg laroour Z2 C80 3larWood lole|s & Resorls
lo||day lrr 0ar||rg laroour 31 C80 lrlerCorl|rerla| lole|s 0roup
Par|roya| 0ar||rg laroour 3ydrey 310 C80 Par Pac|l|c lole|s 0roup
Novole| 3ydrey 0ar||rg laroour 525 C80 Accor
Rydges wor|d 3quare 3ydrey 152 C80 Rydges lole|s & Resorls
Tota| Number of Rooms 2,55
3ource: lole| Varagererl, WWW..Wol|l.cor
Tre corpel|l|ve group|rg corpr|ses a r|x ol |rlerral|ora| (2,113 roors or 82.1) ard doresl|c (152
roors or 1Z.) orarded producl. Rydges wor|d 3quare |s lre or|y doresl|c orard ard ore ol lre lrree
|argesl properl|es W|lr ar overa|| average properly s|ze ol 128 roors. Tre corpel|lor sel |rc|udes lWo ol
3ydrey's |argesl role|s; lre Four Po|rls oy 3reralor ard Novole| 3ydrey 0ar||rg laroour.
Tre |derl|l|ed corpel|lors are We|| represerled oy lre rajor Auslra||ar role| operalors W|lr rolao|e
|rlerral|ora| orards |rc|ud|rg Novole| (Accor lole|s, Auslra||a's |argesl operalor), lo||day lrr
(lrlerCorl|rerla| lole|s 0roup, 1lr |argesl) ard Four Po|rls oy 3reralor (3larWood lole|s & Resorls, 12lr
|argesl).
E-63
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 3
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Perlormance ol 0omper|r|ve $er
Perlorrarce dala ras oeer sourced lror 3TR 0|ooa| ard prov|ded lo JLL lor 2013. A srapsrol ol lre
recerl lrad|rg perlorrarce |s prov|ded |r lre lo||oW|rg crarl ard r|gr||grls lral lre suojecl properly ras
perlorred aoove lre corpel|l|ve sel over lre pasl 12 rorlrs W|lr RevPAR averag|rg Au0 150 versus
corpel|lor sel ol Au0 111. Tre properly lyp|ca||y oulperlorrs dur|rg lrose rorlrs Wr|cr are slrorgesl lor
VlCE derard.
$wDT /na|,s|s ol hovore| Rockloro 0ar||ng laroour
8trengths weaknesses
Exce||erl |ocal|or |r c|ose prox|r|ly lo C80 &
0ar||rg laroour
3ra|| properly W|lr leW roor lypes
0ua||ly |rdoor poo| & gyr
Accor orard|rg, d|slr|oul|or slrerglr & |oya|ly
prograr
Roc|lord's reverue raragererl syslers
Veel|rg roors W|lr ralura| ||grl
ler|lage craracler ol lre adjo|r|rg
Purprouse 8ar & Reslaurarl W|lr good
palrorage lror |oca|s.
l|slor|ca||y slrorg A0R groWlr al lre properly
3ore roors rave v|eWs over lre Cr|rese
garders
No ors|le guesl par||rg
0aled roors producl corpared lo corpel|lor
sel
Lorg-|easero|d l|l|e ercuroer|rg lre
properly as We|| as oolr raragererl ard
lrarcr|se agreererls
3|gr|l|carl porl|or ol ous|ress r|x lror a|r
creW ard a |ac| ol vo|ure corporale
accourls
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Novote| Rockford 0ar||ng harbour RevPAR 2013
Novole| Roc|lord RevPAR Corpel|l|ve 3el RevPAR 3ource: 3TR 0|ooa|
E-64
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0pportun|t|es Threats
Relurr lo groWlr lor lrad|l|ora| |roourd
rar|els e.g. Europe ard u3A Wr|cr |||e lre
0ar||rg laroour prec|rcl
3lrorg lrad|rg rar|el lurdarerla|s projecled
lor 3ydrey C|ly over lre rexl leW years
As|ar |roourd rar|els projecled lo urderp|r
|roourd lour|sr groWlr over lre cor|rg
decade
C|ly sr|ll|rg WeslWards W|lr 8arargaroo &
3lCEEP deve|oprerls
Re-oper|rg ol 3lCEEP |r 201 ard groWlr |r
As|a Pac|l|c everls
0roW corporale accourls
Reluro|sr lre properly |r l|re lor re-oper|rg
ol 3lCEEP
C|osure ol 3CEC ard polerl|a| |rpacl ol
roor r|grl derard al lre role|
Recerl reluro|srrerl ol rearoy corpel|lors
|rc|ud|rg Par|roya| 0ar||rg laroour,
3W|ssole| ard Four Po|rls
Recerl ard p|arred add|l|ors lo rearoy
corpel|lors e.g. Four Po|rls
Auslra||ar 0o||ar rera|rs r|gr lor ar
exlerded per|od ol l|re
E-65
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 5
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
7 London Market Overview
7.1 Execut|ve 8ummary
lr add|l|or lo oe|rg ore ol lre Wor|d's |ead|rg l|rarc|a| cerlres, Lordor ras slrerglrs |r lre arls, educal|or,
lasr|or, l|rarc|a| serv|ces, red|a ard lour|sr |rduslr|es, a|| corlr|oul|rg lo lre c|ly's g|ooa| ecoror|c
pror|rerce as We|| as dr|v|rg suoslarl|a| corporale derard.
Lordor |s a|so rore lo sore ol lre Wor|d's rosl larous sporl|rg, cu|lura| ard erlerla|rrerl verues,
supporl|rg rajor everls |r lre c|ly ard erao||rg Lordor lo oe ore ol lre rosl v|s|led c|l|es |r lre Wor|d.
3ore |ey |rlerral|ora| allracl|ors ard everls |rc|ude:
Tre 8r|l|sr Vuseur
Tre ToWer ol Lordor
Tre Nalura| l|slory Vuseur
Tre Nal|ora| 0a||ery
Tre Lordor 3c|erce Vuseur
Tre Lordor Eye
8uc||rgrar Pa|ace
Tre Lordor Varalror
Tre 8RlT AWards
Cre|sea F|oWer 3roW
Lordor Fasr|or wee|
Tre FA Cup F|ra|
3|x Nal|ors Rugoy Tourrarerl
w|ro|edor Terr|s Tourrarerl
Tre Lordor F||r Fesl|va|
Lordor |s oy lar lre |argesl accorrodal|or cerlre |r lre ur|led K|rgdor (uK) W|lr 131,131 roors across
1,3Z9 eslao||srrerls as al Vay 2011. lole| properl|es dor|rale lre rar|el, accourl|rg lor 91.2 ol lola|
accorrodal|or, Wr||e serv|ced aparlrerls accourl lor .9.
Tre Lordor accorrodal|or rar|el ras sroWr |ls roor derard res|||erce over lre pasl leW years desp|le
lre 0|ooa| F|rarc|a| Cr|s|s. 3|rce 2003, a lurlrer 32,138 roors or 33.3 rave oeer added lo Lordor's
accorrodal|or rar|el. Tre |argesl |rcrease Was |r 2012 Wr|cr saW ar add|l|ora| Z,823 roors erler lre
Lordor rar|el spurred oy lre Lordor 0|yrp|cs. 0ver lre per|od, occuparcy ras |rcreased lror Z5.3 |r
2001 lo 82.1 |r 2013. Roor rales rave a|so |rcreased a CA0R ol 1.1 s|rce 2001, up lror 9 lo 138
|r 2013.
7.2 Un|ted K|ngdom Econom|c Harket 0verv|ew
Un|ted K|ngdom: Econom|c |nd|cators
2010 2011 2012 2013 2014F 2015F 201F
Rea| 00P ( crarge) 1. 1.12 0.28 1. 2.9 2.18 2.3
00P (u30 o||||ors, PPP) 2,000.39 2,022.Z5 2,028.3 2,02.08 2,123.20 2,1Z5.ZZ 2,233.09
00P Per Cap|la (u30, PPP) 32,015 31,955 31,81 32,13Z 32,81 33,155 31,119
Corsurer Pr|ce lrdex ( crarge) 3.29 1.18 2.82 2.55 1.9 1.3 1.8
Excrarge Rale (LCu / u30) 1.5Z 1.55 1.58 1.5 1.Z 1.1 1.1
urerp|oyrerl Rale () 1.55 1.Z0 1.Z5 1.28 3.29 3.03 2.91
Popu|al|or (r||||or) 2.12 3.30 3.Z5 1.1Z 1.1 5.01 5.15
3ource: 0xlord Ecoror|cs, F= Forecasl
E-66
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Tre uK ecorory |s ore ol lre |argesl |r lre Wor|d, rar||rg s|xlr g|ooa||y ard |s a|so ore ol lre rosl
accorrodal|rg p|aces |r lre Wor|d lo do ous|ress. Tre ecorory erjoyed a |org per|od ol slrorg, |oW
|rl|al|orary groWlr oelWeer 1993 ard 200Z, supporled oy a slao|e doresl|c po||l|ca| oac|drop.
Al lre erd ol 01 2012, lre uK rad posled lWo corsecul|ve quarlers ol regal|ve groWlr ard oll|c|a||y
erlered |rlo a douo|e-d|p recess|or. loWever, |r 03 2012, 00P exparded oy a surpr|s|rg|y slrorg 1.0
quarler-or-quarler, lrerelore, erd|rg lre secord recess|orary d|p. 00P edged up 0.3 overa|| |r 2012.
le|p|rg rallers Was exlerded erp|oyrerl groWlr ard a drop |r corsurer pr|ce |rl|al|or lo a 31-rorlr
|oW ol 2.2 |r 3epleroer 2012, ||ll|rg corsurers' sperd|rg capac|ly.
Pos|l|ve groWlr corl|rued |r 2013, W|lr 00P expard|rg oy 0.5, 0.8 ard 0.8 |r lre l|rsl, secord ard
lr|rd quarler ol lre year, respecl|ve|y. 0roWlr Was supporled oy expard|rg oulpul lror lre serv|ce seclor,
|rduslr|a|, rarulaclur|rg ard corslrucl|or |rduslry. Voreover, corsurer sperd|rg, ous|ress |rveslrerl
ard pr|vale res|derl|a| |rveslrerl greW oy 0.8, 2.0 ard 0.Z respecl|ve|y |r lre lr|rd quarler.
Neverlre|ess, cra||erges rera|r W|lr a regal|ve rel lrade lo||oW|rg a la|| ol 3.0 |r exporls.
lr Apr|| 2011, lre lVF arrourced lral lre uK ecorory W||| oe lre laslesl groW|rg lr|s year ol lre 0Z
courlr|es. Tr|s |s a|orgs|de |oW |rl|al|or ard la|||rg urerp|oyrerl.
CPl lrl|al|or le|| lo 1.Z |r lre year lo Feoruary 2011; |ls |oWesl |eve| s|rce 0clooer 2009. Tre ra|r
corlr|oul|ors lo lre s|oWdoWr care lror lre lrarsporl seclor, Wrere lre pr|ce ol pelro| le||, ard rousero|d
serv|ces, Wrere gas ard e|eclr|c|ly pr|ces rose rore s|oW|y lrar |r lre sare rorlr |asl year. lrl|al|or |s
expecled lo rera|r suodued as lre |rpacl ol slrorger derard |s ollsel oy ar apprec|al|rg Pourd ard
s|ugg|sr Wages. Furlrerrore, as |rl|al|or |s oe|oW |ls 2 largel rale, lre 8ar| ol Erg|ard ray lace |ess
pressure lo ra|se |rleresl rales.
Vorerlur |r lre joos rar|el corl|rued |r lre lrree rorlrs lo Feoruary 2011 as urerp|oyrerl le|| oy
3,000, or|rg|rg lre rale doWr lo Z.2 lror Z.1 |r lre prev|ous lrree rorlrs. Erp|oyrerl rose oy
105,000 over lre sare per|od, dr|ver oy r|s|rg ruroers ol se|l-erp|oyed as lre ruroer ol erp|oyees
aclua||y le|| over lre per|od. Tola| earr|rgs rose oy jusl 1.1 over lre year lo Jaruary, corpared W|lr
|rl|al|or al 1.9. loWever, lr|s urusua| per|od ol la|||rg earr|rgs |s sel lo erd ard rea| Wage groWlr |s
expecled lo exceed |rl|al|or aga|r lr|s year.
A|lrougr lre uK uplurr seers lo oe l|ra||y l|rr|rg ard oroader|rg aller exlerded Wea|ress, lre ups|de lor
groWlr |s sel lo rera|r capped oy or|y a gradua| eas|rg ol lre exlerded squeeze or purcras|rg poWer,
corslra|red goverrrerl sperd|rg; or|y gradua||y |rprov|rg Eurozore doresl|c derard ard a re|al|ve|y
slrorg Pourd.
we arl|c|pale lral lre 8ar| ol Erg|ard W||| |eep |rleresl rales al 0.5 url|| lre lr|rd quarler ol 2015 lo g|ve
lre ecorory every crarce lo deve|op decerl ard susla|red groWlr.
E-67
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
7.3 Tour|sm 0verv|ew
Tour|sl derard |r Lordor ras seer sleady groWlr s|rce lre ecoror|c doWrloWr |r 200Z/2008, Wr|cr saW
v|s|lor arr|va|s la|| oy 1.2 ard 3.5 respecl|ve|y. 2009 saW v|s|lor arr|va|s groW oy 1.9, roWever oed
r|grls dec||red oy 3.. 2011 saW oolr arr|va|s ard oed r|grls oac| lo slrorg groWlr as lre ecorory
oegar lo recover. 2012 ard 2013 Were oolr record years lor Lordor, W|lr v|s|lor arr|va|s reacr|rg ar a||-
l|re r|gr ol 29.1 r||||or |r 2013, rel|ecl|rg a y-o-y |rcrease ol 5.1. 8ed r|grls a|so sroWed a pos|l|ve
lrerd |r 2013 ard |rcreased oy 2.1 lo a record ol 121.9 r||||or.
lnrernar|ona| v|s|ror /rr|va|s
lrlerral|ora| arr|va|s recorded a 10 year CA0R ol 3.Z oelWeer 2003 ard 2013. lr 2013, |rlerral|ora|
arr|va|s lola||ed 1.8 r||||or, a slrorg |rcrease ol 8.5 corpared lo lre prev|ous year. 2013 recorded lre
r|gresl ruroer ol |rlerral|ora| v|s|lors dur|rg lre 10-year per|od, lre prev|ous pea| oe|rg 200 W|lr 15.
r||||or v|s|lors.
0omesr|c v|s|ror /rr|va|s
11.Z0
13.39
13.89
15.59
15.31
11.Z5
11.21
11.Z1
15.29
15.1
1.Z8
-30
-20
-10
0
10
20
30
10
0.0
5.0
10.0
15.0
20.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
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|nternat|ona| V|s|tor Arr|va|s to London
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: v|s|l 8r|la|r
11.30
12.80
10.Z0
10.9
10.10
9.80
10.80
11.3Z
11.09
12.15
12.31
-10
-30
-20
-10
0
10
20
30
10
0.0
2.0
1.0
.0
8.0
10.0
12.0
11.0
1.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
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0omest|c V|s|tor Arr|va|s to London
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: v|s|l 8r|la|r
E-68
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 8
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0oresl|c arr|va|s lo Lordor rave recorded a CA0R ol -1.5 or average oelWeer 2003 ard 2013.
0oresl|c v|s|lors lola||ed 12.3 r||||or |r 2013, a 1.3 |rcrease or 2012.
/verage lengrn ol $ra,
lr 2013 lre average |rlerral|ora| slay Was 5.8 days, a 1.9 decrease corpared lo 2012 ard sl||| oe|oW lre
pea| ol .8 days recorded dur|rg lre per|od |r 2003. Tre average |erglr ol slay lor doresl|c v|s|lors Was
2.2 days |r 2013, corpared lo 1.Z days lre prev|ous year. Tre average slay lor doresl|c guesls ras
rarged oelWeer ore ard lWo days lror 2003 lo 2013.
Seograpn|c Dr|g|n
Tre u3A corl|rues lo oe lre |argesl source ol |rlerral|ora| v|s|lors lo Lordor (10. rar|el srare),
desp|le decreas|rg 8.2 lror 11.2 r||||or v|s|lor r|grls |r 2012 lo 10.3 r||||or v|s|lor r|grls |r 2013. 0lrer
rajor source rar|els |r lerrs ol v|s|lor r|grls |rc|ude Frarce W|lr a Z.Z rar|el srare, 0errary (.2)
ard lla|y (.1).
0.0
1.0
2.0
3.0
1.0
5.0
.0
Z.0
8.0
2003 2001 2005 200 200Z 2008 2009 2010 2011 2012 2013
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London Tour|sm - Average Length of 8tay
lrlerral|ora| 0oresl|c 3ource: v|s|l 8r|la|r
0.0
2.0
1.0
.0
8.0
10.0
12.0
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Top 10 8ource Harkets to London |n 2013 - y 6ountry of Res|dence
2012 2013 3ource: v|s|l 8r|la|r
E-69
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 9
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0l lre lop 10 source rar|els, lre |argesl |rcrease |r v|s|lor r|grls oelWeer 2012 ard 2013 Was lror
Auslra||a, |rcreas|rg 21.Z lror 1.3 r||||or v|s|lor r|grls lo 5.2 r||||or v|s|lor r|grls. Tre |argesl dec||re
care lror Po|ard, W|lr a 1. la|| |r v|s|lor r|grls lror 3.Z r||||or |r 2012 lo 3.1 r||||or |r 2013.
Purpose ol v|s|r - lnrernar|ona| v|s|rors
Tre rajor|ly ol |rlerral|ora| v|s|lor r|grls |r 2013 corpr|sed |e|sure lrave||ers, accourl|rg lor 19.5 ol lola|
v|s|lor r|grls. Trave| lo v|s|l lr|erds ard re|al|ves (vFR) Was lre secord r|gresl proporl|or ol lola| v|s|lor
r|grls W|lr 22.8, lo||oWed oy ous|ress-re|aled lrave| (19.8).
re, 0emano 0r|vers
lr add|l|or lo oe|rg ore ol lre Wor|d's |ead|rg l|rarc|a| cerlres, Lordor ras slrerglrs |r lre arls, educal|or,
lasr|or, l|rarc|a| serv|ces, red|a ard lour|sr |rduslr|es, a|| corlr|oul|rg lo lre c|ly's g|ooa| ecoror|c
pror|rerce ard slalus as a |ead|rg lour|sr desl|ral|or.
Tre c|ly |s rore lo sore ol lre Wor|d's rosl |cor|c lour|sl s|les |rc|ud|rg lre 8|g 8er, lre louses ol
Par||arerl, Trala|gar 3quare ard lre Lordor Eye. lr add|l|or, lre c|ly ras a |arge ruroer ol ruseurs
ard arl ga||er|es, |rc|ud|rg lre 8r|l|sr Vuseur (currerl|y lre rosl v|s|led allracl|or |r lre uK), lre Nalura|
l|slory Vuseur, lre Nal|ora| 0a||ery ard lre Tale Voderr. Furlrerrore, Lordor ras sore Wor|d-c|ass
par|s ard oper spaces lral |rc|ude lyde Par|, Regerl's Par| ard 3l. Jares's Par|. Trese e|ererls
coro|re lo creale a Wor|d-c|ass |rlerral|ora||y reroWred lour|sl desl|ral|or.
Tre Lordor 0eve|oprerl Aulror|ly (L0A) ras p|ars lo expard Lordor's lour|sr producl ever lurlrer
lrrougr lre Lordor Tour|sr Acl|or P|ar. Key areas ol lre p|ar |rc|ude:
Corl|ru|rg lo prorole Lordor lo core |e|sure ard ous|ress rar|els (Norlr Arer|ca, Europe ard
lre uK) lo ra|rla|r ard groW rar|el srare
Corl|ru|rg lo rev|eW lre oa|arce ol resources a||ocaled lo ous|ress ard |e|sure acl|v|ly
wor||rg c|ose|y W|lr rar|el|rg ood|es lo ersure a susla|rao|e oa|arce ol v|s|lors
wor||rg c|ose|y W|lr Lordor's overseas oll|ces |r Va|r|ard Cr|ra ard lrd|a lo rax|r|se Lordor's
orard exposure as a |ead|rg v|s|lor desl|ral|or |r lrese rar|els
lo||day / P|easure,
19.5
vFR, 22.8
8us|ress, 19.8
Educal|or, 1.2
0lrer, .Z
|nternat|ona| V|s|tors - Purpose of V|s|t |n 2013
lo||day / P|easure vFR 8us|ress Educal|or 0lrer
3ource: v|s|l 8r|la|r
E-70
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z0
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Coord|ral|rg slraleg|c galeWay acl|v|ly lo cap|la||se or Lordor's ro|e as a galeWay lo lre resl ol lre
uK oy overseas v|s|lors
Corl|ru|rg lo supporl lre deve|oprerl ol Lordor as a rajor everls desl|ral|or lrrougr lre Everls
lor Lordor 3leer|rg 0roup.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
w|lr|r Lordor, lre Lordor urdergrourd relWor| |s lre rosl ell|c|erl lorr ol lrarsporlal|or, correcl|rg
2Z0 slal|ors across 11 ||res. Cross Ra|| |s a reW urdergrourd ra||Way deve|oprerl due lo oe corp|eled |r
2018 Wr|cr W||| ra|e |l qu|c|er ard eas|er lo lrave| across lre c|ly v|a reW ||res ard lurre|s. Tre ||re W|||
correcl 3Z slal|ors across Lordor, lror lealrroW |r lre Wesl, lrougr cerlra| ard l|ra||y lo 3rerl|e|d |r
lre easl. Cross Ra|| |s expecled lo prov|de a 10.0 |rcrease |r ra|| capac|ly ard serv|ce up lo 200 r||||or
passergers a year.
Lordor |s a|so served oy l|ve |rlerral|ora| a|rporls, a|| |ocaled W|lr|r a ore-rour dr|ve ol lre c|ly cerlre
(lealrroW, Lordor 0alW|c|, Lordor 3larsled, Lulor ard Lordor C|ly). Lordor's ra|r a|rporl, lealrroW,
serves 181 desl|ral|ors |r 80 courlr|es ard |s lre Wor|d's ous|esl a|rporl oy |rlerral|ora| passerger
ruroers. lls rosl popu|ar roules are lo NeW Yor|, 0uoa|, Frar|lurl, 0uo||r ard Arslerdar.
lr 2013, lola| passerger arr|va|s lo Lordor (|rc|ud|rg a|| l|ve a|rporls) |rcreased oy 3.3 corpared lo 2012,
W|lr lola| passerger ruroers reacr|rg a|rosl 139 r||||or. Passerger arr|va|s lo Lordor rave recorded a
10 year CA0R ol 1.5 s|rce 2003, We|gred doWr oy a 1.9 d|p |r 2009 due lo lre Wor|d l|rarc|a| cr|s|s.
7.4 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Tre rajor|ly ol Lordor's lu||-serv|ce role|s are corcerlraled |r Lordor's wesl Erd, Wrere rary ol
Lordor's larous lour|sl allracl|ors are |ocaled, parl|cu|ar|y |r lre C|ly ol weslr|rsler. Tre lo||oW|rg
descr|oes lre craracler|sl|cs ol lre c|ly's l|ve rajor role| d|slr|cls:
The 6|ty of westm|nster - 3|lualed |r lre rearl ol lre cap|la|, lre oorougr corla|rs rary par|s ard
oper spaces, a|org W|lr a |arge ruroer ol popu|ar s|les sucr as 8uc||rgrar Pa|ace, lre louses ol
Par||arerl ard 10 0oWr|rg 3lreel. lr add|l|or, a ruroer ol pr|re sropp|rg desl|ral|ors are |ocaled |r
lre oorougr |rc|ud|rg Regerl's 3lreel, 0xlord 3lreel, P|ccad|||y ard 8ord 3lreel, |r add|l|or lo a
ruroer ol r|grl||le rolspols |rc|ud|rg lre popu|ar erlerla|rrerl d|slr|cl ol 3oro. Tre C|ly ol
weslr|rsler |s rore lo sore ol lre Wor|d's rosl larous 5-slar role|s, sucr as lre 0orcresler, lre
R|lz, C|ar|dge's ard lre Corraugrl.
6amden - Localed |r lre rorlr ol lre c|ly, slrelcr|rg lror lo|oorr ard 8|oorsoury |r lre soulr lo
larpslead lealr |r lre rorlr. Tre oorougr |s rore lo lrree ol lre cap|la|'s ous|esl lrarsporl ruos;
Euslor, K|rg's Cross ard 3l. Parcras lrlerral|ora|, lre lerr|rus ol lre Euroslar lra|r lo corl|rerla|
Europe. Trere rave oeer a |arge ruroer ol regereral|ve projecls la||rg p|ace arourd K|rgs Cross
ard rary ous|resses roW rave a preserce |r lre area. 0oog|e a|so p|ars lo ou||d lre|r reW
Europear readquarlers rear K|rgs Cross slal|or Wr|cr W||| corpr|se 920,000 square leel ol oll|ce
space orce corp|eled ard |||e|y draW olrer lecrro|ogy ous|resses |rlo lre area. Carder ToWr, lo
lre rorlr ol lre oorougr, |s a We||-eslao||sred rela|| ard erlerla|rrerl rolspol ard |rc|udes a ruroer
ol We||-|roWr rar|els ard rus|c verues lral are slrorg|y assoc|aled W|lr a|lerral|ve cu|lure. Vajor
role|s |ocaled |r lre area |rc|ude lre Rera|ssarce lole| 3l. Parcras, lre 0real Norlrerr role|,
RoseWood Lordor, lre l||lor Lordor Euslor ard lre Pu||rar Lordor 3l. Parcras.
E-71
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Kens|ngton & 6he|sea - Tre Roya| 8orougr ol Kers|rglor & Cre|sea |s |ocaled lo lre |rred|ale
Wesl ol lre C|ly ol weslr|rsler ard lo lre easl ol larrersr|lr ard Fu|rar. Tre oorougr |s rore lo
a suoslarl|a| ruroer ol lour|sr s|les, |rc|ud|rg rajor ruseurs sucr as lre Nalura| l|slory Vuseur
ard lre Lordor 3c|erce Vuseur, deparlrerl slores sucr as larrods, Peler Jores ard larvey
N|cro|s Wr||e Noll|rg l|||, lo lre rorlr ol lre oorougr, |s rore lo Noll|rg l||| carr|va|, Europe's |argesl
carr|va|. Tre oorougr a|so rouses severa| eroass|es Wr|cr are |ocaled |r 8e|grav|a, Kr|grlsor|dge
ard Kers|rglor 0arders, as We|| as sore ol lre Wor|d's rosl presl|g|ous ur|vers|l|es sucr as lrper|a|
Co||ege, lre Roya| Co||ege ol Arl ard lre Roya| Co||ege ol Vus|c. Tre oorougr |s ore ol lre rosl
all|uerl |r Lordor, W|lr sore ol lre rosl expers|ve res|derl|a| properl|es |r lre Wor|d |ocaled |r lr|s
parl ol lre c|ly. Vajor role|s |ocaled |r lr|s area |rc|ude lre 8er|e|ey, lre 8u|gar| lole| ard
Res|derces, Jure|rar Car|lor ToWer, lre wyrdrar 0rard Lordor Cre|sea laroour ard lre l||lor
Lordor Kers|rglor.
Tower ham|ets - Localed lo lre easl ol lre C|ly ol Lordor ard rorlr ol lre R|ver Trares, ToWer
lar|els covers rucr ol lre lrad|l|ora| Easl Erd ol lre c|ly. Tre oorougr |s rore lo Carary wrarl,
ore ol Lordor's pr|rary ous|ress d|slr|cls ard ore ol Europe's |argesl c|uslers ol s|yscrapers, a|org
W|lr severa| pror|rerl lour|sl allracl|ors lral |rc|ude ToWer 8r|dge ard lre ToWer ol Lordor. Tre
oorougr |s a|so rore lo ore ol Lordor's rosl popu|ar r|grl||le spols, 8r|c| Lare, larous lor |ls |arge
ruroer ol oars, r|grlc|uos ard curry rouses. Vajor role|s |r lre area |rc|ude lre 0uorar ToWer
lole|, Four 3easors Lordor Carary wrarl, Varr|oll wesl lrd|a 0uay ard lre l||lor Lordor Carary
wrarl.
The 6|ty of London - Tre C|ly, oller relerred lo as lre square r||e, |s a rajor ous|ress ard l|rarc|a|
cerlre |r Lordor. A|org W|lr Carary wrarl lo lre easl, lre C|ly |s a|so ore ol lre |ead|rg l|rarc|a|
cerlres ol Europe. A|lrougr lre C|ly ras a re|al|ve|y sra|| res|derl|a| popu|al|or (arourd Z,000
res|derls), over 300,000 peop|e corrule ard Wor| |r lre d|slr|cl. F|rarc|a| serv|ces are lre pr|rary
ous|ress locus |r lre area, parl|cu|ar|y |rsurarce, W|lr |ega| l|rrs a|so rav|rg preserce |r lre rorlrerr
ard Weslerr s|des ol lre C|ly. Tre C|ly ol Lordor v|es W|lr NeW Yor| as lre l|rarc|a| cap|la| ol lre
Wor|d, W|lr lre Lordor 3loc| Excrarge, L|oyd's ol Lordor, lre 8ar| ol Erg|ard ard over 500 olrer
|rlerral|ora| oar|s rav|rg oll|ces |r lre area. lr 2009, lre C|ly accourled lor 2.1 ol uK's lola| 00P.
Vajor role|s |r lre area |rc|ude Ardaz L|verpoo| 3lreel, Tre 0rarge 3l. Pau|s, 0ouo|elree oy l||lor
ard Trreadreed|es Lordor.
Ex|sr|ng lore| $upp|,
Lordor ollers a |arge var|ely ol role|s, lror oudgel lo |uxury, a|lrougr lre rajor|ly ol supp|y |s c|ass|l|ed
as 1-slar (upsca|e) qua||ly. lr recerl years, lre c|ly ras seer a cors|derao|e |rcrease |r |ls oudgel segrerl,
W|lr orards sucr as Trave|odge, Prer|er lrr ard lo||day lrr Express rap|d|y expard|rg |r lre cap|la|. Tre
upsca|e ard |uxury segrerl rave a|so W|lressed ar |rcrease, a|lrougr lo a |esser exlerl.
As al Vay 2011, lre graded role| supp|y |r Lordor corpr|sed rore lrar 1,3Z8 role|s W|lr a lola| ol
131,11 roors. 0esp|le rajor deve|oprerls |r lre oudgel seclor, lre Lordor rar|el rera|rs dor|raled
oy 1-slar roor supp|y (arourd 3Z). Approx|rale|y 53 ol role| sloc| |s corcerlraled arourd lre cerlra|
oorougrs ol weslr|rsler, Carder ard Kers|rglor ard Cre|sea.
E-72
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z2
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Furure lore| $upp|,
lole| deve|oprerl |r lre cap|la| |s sel lo rera|r ouoyarl lor lre rera|rder ol 2011, W|lr rolao|e oper|rgs
lo |rc|ude lre 359 roor, 1-slar Vordr|ar Lordor |r 3oulrWar| ard lre Z5 roor, 5-slar 8eaurorl role| |r
Vayla|r, oolr due |r lre aulurr. lr add|l|or, Apr|| 2011 saW p|arr|rg perr|ss|or grarled lor lre Z00
r||||or r|xed-use deve|oprerl, 0re N|re E|rs, |ocaled or Lordor's 3oulr 8ar|. Tre 200-relre r|gr
screre, oWred oy Va|r|ard Cr|rese corg|orerale Tre warda 0roup, W||| oe la||er lrar lre Lordor Eye,
Tre 0rer||r ard Tre 8T ToWer ard W||| rouse lre l|rsl |uxury role| opered oy a Va|r|ard Cr|rese l|rr
ouls|de Va|r|ard Cr|ra. ll a|| p|arred role| deve|oprerls are rea||sed, role| supp|y |r Lordor W||| |rcrease
oy a lola| ol 15,1Z9 roors over lre rexl lrree years, a groWlr ol 9.1 or currerl supp|y.
Varker w|oe lore| Trao|ng Perlormance
lole| lrad|rg perlorrarce |r Lordor reoourded qu|c||y aller a d|p |r perlorrarce dur|rg lre recess|or
per|od ol 2008/2009. 3|rce lrer, role|s |r Lordor rave reporled a pos|l|ve groWlr |r perlorrarce y-o-y
W|lr occuparcy |eve|s cors|slerl|y aoove 80.0. lr 2012, RevPAR |rcreased y-o-y oy 2.0 lo 113 due lo
a groWlr |r A0R ol 1.0, Wr||e occuparcy decreased lo 80.. 8y lre erd ol 2013, Lordor role||ers
reporled a rarg|ra| y-o-y RevPAR groWlr ol 0., pr|rar||y dr|ver oy ar |rcrease |r occuparcy ol 2.2 lo
82.5 coro|red W|lr a 1. dec||re |r A0R.
0ccuparcy rales |r Lordor are gerera||y qu|le seasora|, W|lr regu|ar sp||es |r perlorrarce dur|rg lre
pea| aulurr ard surrer rorlrs. 0esp|le lr|s, lre surrer ol 2013 exper|erced a slrorg ear|y surrer
W|lr lrad|rg perlorrarce |r Jure up 11.Z, Wr||e lrad|rg Was rore suodued |r lre rorlrs ol Ju|y ard
Augusl due lo excepl|ora| corpar|sors resu|l|rg lror lre 2012 0|yrp|cs.
As al YT0 Apr|| 2011, RevPAR Was up Z.3 corpared lo 2013 as a resu|l ol a 5.1 |rcrease |r A0R ard
a 2.1 |rcrease |r occuparcy. Perlorrarce ras oeer pos|l|ve|y allecled oy a relurr |r ous|ress ard
corsurer corl|derce, a|org W|lr ar |rprov|rg ecorory.
108,Z8
110,89Z
111,035
11Z,3Z0
125,193
12,89
132,29Z
139,380
112,318
2,219
3,138 3,335
Z,823
1,Z
5,128
Z,083
2,98
19
50,000
0,000
Z0,000
80,000
90,000
100,000
110,000
120,000
130,000
110,000
150,000
2009 2010 2011 2012 2013 2011 2015 201 201Z
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Add|t|ons to hote| 8upp|y |n London (2009 - 2017}
Ex|sl|rg 3upp|y Fulure Roors 3upp|y 3ource: AV:PV lole|s
E-73
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z3
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$erv|ceo /parrmenr Varker Dverv|eu
Accord|rg lo lre Assoc|al|or ol 3erv|ced Aparlrerl Prov|ders (A3AP), lre uK |s lre |argesl ard rosl
deve|oped serv|ced aparlrerl rar|el |r Europe ard rary doresl|c operalors sucr as 0o Nal|ve, a|org
W|lr g|ooa| operalors sucr as 8r|dge3lreel, rave eslao||sred a slrorg preserce |r lre courlry. 8y lar lre
rosl ralure rar|el |s Lordor Wrere rary operalors rave a loolro|d |r lre cap|la|. 8e|rg Europe's |ey
l|rarc|a| cerlre, derard lor serv|ced aparlrerl accorrodal|or |s very r|gr ard occuparcy |eve|s |r lre
serv|ced aparlrerl seclor lerd lo rarge oelWeer 85 ard 90. 3lrorg var|al|ors |r lrad|rg perlorrarce
W||| corl|rue, W|lr Lordor sel lo oulperlorr lre resl ol lre uK rar|el. loWever, lre olrer uK reg|ors W|||
oller a |ol ol groWlr polerl|a| W|lr lrad|rg perlorrarce |r lre l|rsl lour rorlrs ol 2011 p|c||rg up |r
0|asgoW (20.3), Varcresler (11.5), Aoerdeer (11.1) ard Leeds (9.0).
Vov|rg lorWard, lre seclor W||| corl|rue lo evo|ve ard sroW groWlr oolr |r Lordor ard lre uK reg|ors,
W|lr rary operalors corl|ru|rg lo searcr lor reW opporlur|l|es W|lr lre|r oWr Aparlrole| orards. Al preserl,
arourd 2Z serv|ced aparlrerl projecls are currerl|y |r lre deve|oprerl p|pe||re across lre uK.
Ex|sr|ng $erv|ceo /parrmenr $upp|, {lonoonj
London: 8erv|ced Apartment 8upp|y by 0perator (Hay 2014}
0perator No. of Propert|es Un|ts
8r|dge3lreel 0|ooa| losp|la||ly 1 Z81
Tr|r| Aparlrerls Z1Z
Var||r Aparlrerls Z09
Ascoll 0roup 8
Creva| Res|derces 8 12Z
Fraser 3erv|ced Res|derces 8 333
0o Nal|ve 1 29
3layc|ly 2 23Z
Vay|eroe| Properl|es 8 215
FlC uK Properl|es 1 198
3AC0 10 18Z
0lrer 105 1,1Z5
Tota| 180 8,991
0lrer orards ard |rdeperderl|y oWred aparlrerls
3ource: AV:PV lole|s
0
10
20
30
10
50
0
Z0
80
90
100
0
50
100
150
2001 2005 200 200Z 2008 2009 2010 2011 2012 2013 YT0
Apr
2013
YT0
Apr
2011
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London hote| Harket - Harket w|de Performance
A0R () RevPAR () 0ccuparcy () 3ource: 3TR 0|ooa|
E-74
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z1
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
As al Vay 2011, lrere are 180 serv|ced aparlrerl properl|es |ocaled across Lordor, represerl|rg a supp|y
ol 8,991 ur|ls. Tre vasl rajor|ly ol lrese are oWrer-operaled, corpr|s|rg over Z5 rar|el srare. 3|r||ar
lo role|s, serv|ced aparlrerl properl|es are pr|rar||y |ocaled |r lre cerlra| oorougrs ol lre C|ly ol
weslr|rsler ard Kers|rglor & Cre|sea.
Lordor ras a |arge percerlage ol urorarded, |rdeperderl|y operaled ur|ls, ra||rg up 1.1 ol lola|
supp|y. loWever, lre |asl 12 rorlrs rave seer a ruroer ol orarded operalors erler|rg lre rar|el. Al
preserl, lre |argesl orarded operalor |r Lordor |s 8r|dge3lreel 0|ooa| losp|la||ly Wro currerl|y rave Z81
ur|ls across 1 properl|es, lo||oWed oy lre Tr|r| Aparlrerls W|lr Z1Z ur|ls, ard Var||r Aparlrerls W|lr
Z09 ur|ls.
Tre serv|ced accorrodal|or rar|el |r Lordor ras seer a surge ol reW oper|rgs dr|ver oy a r|gr
derard lor oolr srorl ard |org lerr accorrodal|or, lre res|||erce ol lre |odg|rg rar|el ard lre re|al|ve
scarc|ly ol serv|ced accorrodal|or sloc|.
Fue||ed oy lre Lordor 0|yrp|c 0ares, deve|oprerl acl|v|ly W|lr|r lre seclor Was parl|cu|ar|y slrorg |r
2012 ard a lola| ol 11 serv|ced aparlrerls W|lr Z98 ur|ls erlered lre Lordor serv|ced accorrodal|or
rar|el. Nolao|e oper|rgs |rc|uded lre 133-ur|l 0rosveror louse Aparlrerls or Par| Lare urder lre
Jure|rar L|v|rg orard. 0Wred oy Par| Lare Properl|es, lre aparlrerls Were or|g|ra||y ou||l |r lre 1920s
ard urderWerl corp|ele |rlerra| reou||d ard reluro|srrerl. Tre lrlerCorl|rerla| lole|s 0roup a|so
opered |ls l|rsl 3layor|dge 3u|les dur|rg Jure 2012 |r 3lrallord, corpr|s|rg 12 aparlrerls. Tre properly
ras s|rce oeer so|d lo V&L lrveslrerls ard |s operaled oy Cycas losp|la||ly urder a |ease agreererl.
Tre expars|or ol supp|y corl|rued |r 2013 W|lr s|x reW serv|ced aparlrerls erler|rg lre rar|el W|lr a
lola| ol 215 roors. l|gr||grls |rc|uded lre 2Z-ur|l 3ullo|| Lare oy 8r|dge3lreel |r lre C|ly ol Lordor ard
lre |uxur|ous Z8-ur|l Nad|er 3oro |r lre 3oro d|slr|cl.
Furure $erv|ceo /parrmenr $upp|, {lonoonj
London: 8erv|ced Apartments P|pe||ne
Name Locat|on Un|ts 0ue 0ate 0perator
ToWer al 0w0 oy uroar v|||a 8rerllord 100 2011 Noro losp|la||ly 0roup
3layc|ly Aparlrole|s 0reerW|cr l|gr Road 0reerW|cr 8 2011 3layc|ly
Pr||pol louse Vorurerl 3 2011 C|ly Aparlrerls
Easl0ale oy uroar v|||a A|dgale Easl 21Z 2015 Noro losp|la||ly 0roup
Var||r Aparlrerls Laroelr Norlr 218 2015 Var||r Aparlrerls
Per|rsu|a ToWer Norlr 0reerW|cr 100 2015 loa
L|rco|r P|aza 3oulr 0uay 108 2015 3r|va lole|s
Roorzzz Lordor 3lrallord 3lrallord l|gr 3lreel 82 2015 Roorzzz
10 Tr|r|ly 3quare ToWer l||| 11 2015 loa
3layor|dge 3u|les Lordor vauxra|| vauxra|| 93 2015 Cycas losp|la||ly
Nad|er v|clor|a v|clor|a Z3 2015 Nad|er lole|s
Ford oy uroar v|||a 3lrallord 158 201Z 3larooard lole|s
Tota| rooms proposed|under construct|on
1,294
3ource: AV:PV lole|s
E-75
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z5
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Trere are currerl|y 12 corl|rred serv|ced aparlrerl projecls W|lr a lola| ol 1,291 ur|ls |r lre deve|oprerl
p|pe||re. ll a|| projecls are rea||sed oy lre erd ol 201Z, serv|ced accorrodal|or supp|y |s expecled lo
|rcrease 11.1. P|pe||re groWlr |s a|so |||e|y lo |rcrease lurlrer s|rce a s|gr|l|carl ruroer ol
deve|oprerls are currerl|y |r lre p|arr|rg slage. Furlrerrore, supp|y groWlr exc|udes Ascoll's p|ar lo
lrarslorr lre 230-roor Tre Caverd|sr Lordor role| |rlo serv|ced aparlrerls.
w|lr l|grl supp|y cord|l|ors ard ||r|led |ard lor deve|oprerl, corverl|rg secordary oll|ces lo serv|ced
aparlrerl use rera|rs ar allracl|ve opporlur|ly lor deve|opers. Tre |oca||ly lor lrese serv|ced aparlrerls
|s cr|l|ca| lor lre deve|oprerls lo oe v|ao|e, espec|a||y ouls|de cerlra| Lordor Wrere serv|ced
accorrodal|or deve|oprerls are oller |ess allracl|ve due lo a |oWer |eve| ol derard lor |orger slay
accorrodal|or.
$erv|ceo /parrmenr Trao|ng Perlormance {lonoonj
3ource: Tre Assoc|al|or ol 3erv|ced Aparlrerl Prov|ders (A3AP)
3erv|ced aparlrerls |r Lordor posl ar average Wee||y rale ol aooul 900 lo 1,000, W|lr occuparcy
usua||y recorded arourd 85.0. 0ccuparcy |s lrerelore s||grl|y r|grer Wrer corpared lo lre role| seclor
Wrere average occuparcy |eve|s are arourd 81.0. lr pr|re |ocal|ors sucr as lre wesl Erd, occuparcy
lerds lo exceed lre 85.0 rar|, W|lr average roor rales s|gr|l|carl|y r|grer lrar olrer cerlra| Lordor
|ocal|ors. Typ|ca||y, A0R's are oe|oW lrose acr|eved oy role|s ol a s|r||ar qua||ly / |ocal|or as corsurers
gerera||y see| rale d|scourls |r excrarge lor a |orger slay. Tre corpar|sor oelWeer serv|ced aparlrerls
ard role|s W||| rera|r cra||erg|rg roWever, as |arger s|zed ur|ls ray allecl lre prov|s|or ol a W|der rarge
ol acr|evao|e serv|ces.
Tre serv|ced aparlrerl seclor |r Lordor ras rol oeer |rrure lo lre l|rarc|a| cr|s|s lral slarled |r 2008
ard W|lressed a 5 dec||re |r Wee||y rales |r 2009 accord|rg lo A3AP. loWever, lre rar|el reoourded
qu|c||y |r 2010 W|lr occuparcy c||ro|rg lo ar |rpress|ve 89.0. Var|el cord|l|ors oecare rore d|ll|cu|l
|r 2011 due lo lre Eurozore cr|s|s ard occuparcy le|| lo ar average ol 81.0 W|lr Wee||y rales rera|r|rg
|arge|y slao|e. Tre 0|yrp|c year ol 2012 Was a success lor rosl serv|ced aparlrerl prov|ders due lo a
20.0 groWlr |r Wee||y rales lo a reW record ol 1,105. 0r lre corlrary, occuparcy rera|red
corparal|ve|y l|al al 83.0, rel|ecl|rg Wea| derard dur|rg lre pre-0|yrp|c rorlrs lror Vay lo Ju|y.
50
55
0
5
Z0
Z5
80
85
90
95
0
200
100
00
800
1,000
1,200
2008 2009 2010 2011 2012
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London 8erv|ced Apartment Harket - Harketw|de Performance
Average wee||y Rale RevPAR 0ccuparcy Average
E-76
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
01 2013 proved lo oe rore cra||erg|rg lor Lordor serv|ced accorrodal|or prov|ders W|lr occuparcy al
arourd ZZ.0, Wr||sl Wee||y rales rera|red slao|e al 1,102. Tre gerera| Lordor role| rar|el saW a
s|r||ar lrerd W|lr RevPAR dec||r|rg oy 5.. Resu|ls |r oolr segrerls Were regal|ve|y |rpacled oy poor
Wealrer cord|l|ors ard Easler occurr|rg |r Varcr, logelrer W|lr lre |rpacl ol reW supp|y.
0ue lo a grealer average |erglr ol slay, serv|ced aparlrerls are rol as exposed lo lre decrease |r
derard or Wee|erds exper|erced oy rary role|s |ocaled c|ose lo correrc|a| |ocal|ors. lr lerrs ol
seasora||ly, derard lor serv|ced aparlrerl accorrodal|or |s dr|ver oy corporale everls ard ro||day
per|ods W|lr |oW derard lyp|ca||y oelWeer 0eceroer ard Varcr. Tre slrorgesl rorlrs are usua||y Jure
ard Ju|y W|lr occuparcy exceed|rg 90.0.
7.5 |nvestment Harket
Lordor rera|rs lre ra|r locus ol uK's |rveslrerl acl|v|ly. Tre cap|la|'s lrad|rg lurdarerla|s are arorg
lre slrorgesl |r Europe ard lre rar|el seers lo oe |ess prore lo lre W|der ecoror|c erv|rorrerl lrar
role|s ouls|de lre cap|la|.
Tre rar|el corl|rues lo oe or lre radar ol rary lore|gr |rveslors Wro are see||rg sale ard |org-lerr
|rveslrerls. Tre upsca|e segrerl corl|rues lo allracl lre rosl allerl|or ard We rave seer a groW|rg
ruroer ol equ|ly-r|cr As|ar ard V|dd|e Easlerr |rveslors acqu|r|rg assels |r lr|s rar|el segrerl.
lr 2011, lre Lordor role| |rveslrerl rar|el Was acl|ve ard assels Worlr 1.1 o||||or crarged oWrersr|p
(51 ol uK lrarsacl|or vo|ures). 0re ol lre rosl pror|rerl sa|es Was lre w lole| al Le|cesler 3quare,
Wr|cr Was purcrased oy a V|dd|e Easlerr |rveslor lor arourd 200 r||||or. Arolrer rajor sa|e Was lre
Rad|ssor EdWard|ar NeW Prov|derce wrarl role|, Wr|cr Was so|d oy lr|sr properly group 8a||yrore lor
38 r||||or lo lre EdWard|ar 0roup. Furlrerrore, lre lo||day lrr Lordor Vayla|r Was acqu|red lor 155
r||||or (|rc|ud|rg oll|ce ard rela|| space) oy Crosslree Rea| Eslale Parlrers.
lr 2012, lre |rveslrerl rar|el rera|red acl|ve. Norelre|ess, |rveslrerl vo|ures corlracled oy 25 y-o-
y lo jusl over 1 o||||or. Nolao|e sa|es |r 2012 |rc|uded lre 1-slar Caverd|sr role| lral Was so|d lor 159
r||||or lo 3|rgapore-oased serv|ced aparlrerl operalor, Tre Ascoll L|r|led. 0lrer lrarsacl|ors |rc|uded
lre 1-slar loxlor ard lre 1-slar K|rgs|ey oy Tr|sl|e, Wr|cr Were so|d lor 5 r||||or ard 13 r||||or,
respecl|ve|y. As |r prev|ous years, a s|gr|l|carl ruroer ol role|s Were acqu|red oy lore|gr |rveslors lror
As|a ard lre V|dd|e Easl.
lr 2013, |rveslrerl |rleresl rade a relurr W|lr assels Worlr 1.3 o||||or crarg|rg rards |r Lordor. Tre
rosl rolao|e s|rg|e assel lrarsacl|or Was lre |easero|d |rleresl |r lre lrlercorl|rerla| lole| or Par| Lare,
Wr|cr Was acqu|red lor approx|rale|y 300 r||||or.
lr lre l|rsl l|ve rorlrs ol 2011, |rveslrerl vo|ure ras reacred 1 r||||or, rel|ecl|rg a 109 y-o-y
|rcrease. A |arge proporl|or ol dea| vo|ure care lror lre sa|e ol lWo s|rg|e assels; Tre Lordor Varr|oll
0rosveror 3quare lor approx|rale|y 125 r||||or oy lorg Korg-oased Pr|vale Equ|ly l|rr Jo|rl Treasure
lrlerral|ora| L|r|led; ard Tre Lordor Ed|l|or role| lor 150 r||||or oy lre Aou 0rao| lrveslrerl Aulror|ly.
Tre |aller Was parl ol a |arger dea| lral corpr|sed lWo olrer Ed|l|or role|s, |r V|ar| ard NeW Yor|, lor a
lola| cors|deral|or ol u30 815 r||||or suojecl lo |org-lerr raragererl agreererls.
0ver lre course ol lre |asl lrree years lrere ras oeer ev|derce lral lre rar|el lor pr|re role| properl|es
ras recovered s|gr|l|carl|y lror lre doWrlurr ol 2009/2010 W|lr aggress|ve lropry pr|c|rg lor qua||ly
properl|es |r pr|re |ocal|ors.
E-77
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page ZZ
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0lrer lrar |ease |rveslrerls lral appea| lo |rsl|lul|ora| lype ouyers, lre role| |rveslrerl opporlur|l|es
lral rave allracled lre rosl |rleresl rave oeer ur-ercuroered assels (lree ol raragererl corlracls) |r
lre oesl |ocal|ors. lrveslors are a|so |oo||rg lor ups|de polerl|a| as a resu|l ol errarced operal|ora|
d|recl|or ard poss|o|y sore prys|ca| Wor|s.
For Wea|er assels |r rore per|prera| |ocal|ors, a srorlage ol l|rarc|rg logelrer W|lr poor |rveslor
serl|rerl ras |ed lo a very lr|r rar|el W|lr opporlur|sl|c pr|c|rg oy |rveslors; roWever We expecl lr|s lo
|rprove |r lre red|ur lerr as deol oecores rore read||y ava||ao|e.
lr our op|r|or, lre srorlage ol good qua||ly opporlur|l|es |r |ey rar|els, Wr|cr rave slrorg urder|y|rg
operal|rg ard |rveslrerl lurdarerla|s, good |org lerr groWlr prospecls, ard are regarded as a good
desl|ral|or lor d|vers|l|cal|or ol cap|la| |s |||e|y lo rear lral corpel|l|or lor sucr assels W||| rera|r r|gr,
ard pr|c|rg W||| ro|d up.
loWever lor |ess allracl|ve opporlur|l|es (oolr prys|ca||y ard l|rarc|a||y) We Wou|d expecl lo see corl|rued
pressure or pr|c|rg.
Recent London hote| Transact|ons
3ource: JLL
7. Harket 0ut|ook
lr lre srorl-rur lre lour|sr oul|oo| |s pos|l|ve, espec|a||y W|lr recerl p|ars lo ease v|sa requ|rererls lor
Va|r|ard Cr|rese v|s|lors. Tre uK goverrrerl p|ars or lreo||rg lre ruroer ol Cr|rese v|s|lors cor|rg lo
lre uK oy 2015. v|s|l 8r|la|r a|so lorecasls a slrorg groWlr |r |rlerral|ora| lour|sl arr|va|s |r 2011,
parl|cu|ar|y lror ererg|rg Europear source rar|els sucr as Russ|a, Po|ard ard lre 8a|l|c slales.
lole| perlorrarce |r 2013 Was W|de|y expecled lo oe Wea|er as lre c|ly rosled leWer |rlerral|ora| everls
lrar |r 2012, lre supp|y p|pe||re corl|rued lo |rlroduce reW assels lo lre rar|el ard lre ecoror|es |r a
ruroer ol |ey source rar|els rera|red lrag||e. wr||e sore role|s or lre lr|rge ol lre cap|la| urdouoled|y
corl|rued lo slrugg|e, as groW|rg supp|y |r Cerlra| Lordor slarled lo |rpacl overl|oW derard, role|s |r
Reported
Pr|ce
(CP }
Roya| 8aysWaler lole| Vay-11 52 35 r||||or Z3,0ZZ R|crl|e|d Rea|ly L|r|led Ferlor wre|ar
lo||day lrr Express Lordor Ear|`s Courl (10 Apr-11 0 .3 r||||or 22,500 1C lole|s Redel|re lrlerral|ora|
Lordor Varr|oll lole| 0rosveror 3quare Var-11 23Z 123.1 r||||or 528,059 3lraleg|c lole|s & Resorls, lrc Jo|rl Treasure lrlerral|ora| L|r|led
0rard Lordor Cre|sea laroour Var-11 10 5.5 r||||or 10,250 larcourl 0eve|oprerls C0L lole| V|||err|ur & Coplrorre
ToWer 8r|dge Vag|slrales Courl Var-11 200 15.5 r||||or ZZ,500 V|r|slry ol Jusl|ce 0or|rvs L|v|rg
VoWoray Courl lole| Var-11 88 15.Z5 r||||or 1Z8,9ZZ ur|roWr - EVEA Corpary E||sl|cs Properly Adv|sors LLP
l||lor 0oc||ards R|vers|de Feo-11 3Z8 50 r||||or 132,2Z5 Pardox A8 8ays|de Cap|la|
Aooa lole| Lordor 0ueersgale Kers|rglor Feo-11 90 10 r||||or 111,111 Vazao| 0esl|r de Palr|ror|os 0rec|ar lole| Erlerpr|des Lld
Peror|dge Pa|ace lole| Jar-11 120 2 r||||or 21,5Z5 Purp|e 3|y 3ar| LC0 0|ooa| lrveslrerls Lld.
Prer|er lrr waler|oo Jar-11 231 18 r||||or 205,128 Var|c| Roya| Lordor Assel Varagererl
Tre VusWe|| l||| lole| Jar-11 11 3.9 r||||or 2Z5,Z9 ur|roWr - EVEA Corpary 3ale|ard P|c
Tre Lordor Ed|l|or Jar-11 1Z3 150 r||||or 8Z,052 Varr|oll lrlerral|ora|, lrc. Aou 0rao| lrveslrerl Aulror|ly
Prer|er lrr 0real wesl Road Jar-11 121 13.1 r||||or 10Z,ZZ Car|lor Properl|es Lld 8P Pers|or Furd
ur| lole| weslr|rsler 0ec-13 111 3Z r||||or 321,51 ur| lole|s Corl|derl|a|
l||lor Lordor ToWer 8r|dge 0ec-13 250 10Z r||||or 128,000 Lordor 8r|dge lo|d|rgs 3l Varl|rs 0rourd
ruo oy Prer|er lrr Lordor 3p|la|l|e|ds - Propos 0ec-13 189 2Z.5 r||||or 115,Z11 Erdurarce Lard 0sprey Equ|ly Parlrers
Porlooe||o lole| 0ec-13 21 13 r||||or 19,018 A Cur|ous 0roup ol lole|s ur|roWr - EVEA Corpary
larr|rglor Courl Aparlrerls 0ec-13 1Z 55 r||||or 1,1Z0,213 8NP Par|oas Corporale & lrveslrerl 8Creva| Properly Varagererl Lld
Trave|odge Rayres Par| Nov-13 8 .9 r||||or 80,233 Trave|odge uK 0uoa| lo|d|rg
Rad|ssor Lordor Porlrar lole| Nov-13 2Z2 90 r||||or 330,882 u|sler 8ar| Lordor & Reg|ora| Properl|es
Trave|odge Lordor l|lord lole| 0cl-13 91 19 r||||or 208,Z91 ur|roWr - EVEA Corpary Tre 8|sropsgale Lorg Terr Properly Furd ur|l Trusl
Purchaser Property
Transact|on
0ate
Rooms
Pr|ce per
room
Vendor
E-78
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z8
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Cerlra| Lordor corl|rued lo oerel|l lror slrorg v|s|lal|or lo lre c|ly. Pr|c|rg Was, roWever, |rpacled oy
lre |ac| ol |arge everls |r lre cap|la|.
Tre oul|oo| lor role| perlorrarce |r 2011 |s |||e|y lo oe pror|s|rg W|lr role|s expecled lo oerel|l lror ar
|rprovererl |r ecoror|c cord|l|ors ard lurlrer slrerglrer|rg |r lore|gr lrave|, |r parl|cu|ar lror
deve|op|rg ard ererg|rg ecoror|es sucr as Va|r|ard Cr|ra ard 8raz||. Tre gradua| rov|rg ol Raradar
lo ear||er |r lre year W||| a|so rear lral lre lrad|l|ora| pea| ol surrer derard lror V|dd|e Easlerr
rar|els W||| oe rore eas||y accorrodaled. lole|s |r Cerlra| Lordor W||| oe lre l|rsl lo oerel|l lror lr|s
errarced derard, Wr||e lrose |ocaled or lre ouls||rls are |||e|y lo see |esser groWlr. Corl|rued
|rprovererl ol lre ral|ora| ecorory, roWever, srou|d a|so slarl lo pos|l|ve|y |rpacl role|s |r lr|rge
|ocal|ors as corporale ous|ress expards aga|r.
Trere are p|ars lo corslrucl a reW rurWay al lealrroW A|rporl Wr|cr W||| a||oW 20,000 rore l||grls every
year, a 51.2 |rcrease or currerl l||grl capac|ly. Al lre l|re ol Wr|l|rg, roWever, lrere |s sl||| urcerla|rly
over Wrelrer lr|s reW rurWay W||| gel lre greer ||grl or a|lerral|ve so|ul|ors are ou||l |rslead. Cross Ra|| |s
a reW ra||Way ||r| urder cerlra| Lordor Wr|cr W||| ra|e lrave|||rg qu|c|er ard eas|er v|a reW ||res ard
lurre|s. Tre screre |s expecled lo |rcrease ra|| capac|ly oy 10 ard serve up lo 200 r||||or passergers
every year. Corslrucl|or ras slarled ard |s due lo oe corp|eled oy 2018.
Lordor corl|rues lo oe Europe's role| |rveslrerl rol spol ard |rleresl rera|rs slrorg parl|cu|ar|y lor
upsca|e role|s |r cerlra| Lordor. Tre rosl recerl sa|e ol lre Lordor Ed|l|or ard Lordor Varr|oll
0rosveror 3quare |r lre l|rsl quarler ol 2011 lor 150 r||||or ard 125 r||||or, respecl|ve|y, ras sroWr
lral lor lre r|grl assels |r lre r|grl |ocal|or, |rveslors corl|rue lo pay r|gr pr|ces. 3lao|e operal|rg
cord|l|ors ard corl|rued groWlr |r |e|sure lour|sr rave rade lre uK cap|la| a ragrel lor lore|gr cap|la|
ard We rave W|lressed a groW|rg |rleresl lror As|ar ard V|dd|e Easlerr |rveslors, Wr||e u3-oased
pr|vale equ|ly lurds are |oo||rg loWards Europear rar|els lor r|grer y|e|d p|ays. Equ|ly-r|cr |rveslors,
oller r|gr rel Worlr |rd|v|dua|s or sovere|gr Wea|lr lurds, rave locused predor|rarl|y or 1 ard 5 slar
role|s ard rave dr|ver pr|ces |r lr|s rar|el segrerl oac| lo pre-cr|s|s |eve|s.
7.7 Park |nternat|ona| hote|
Tre Par| lrlerral|ora| role| |s |ocaled or lre soulr s|de ol CrorWe|| Road rexl door lo lre lo||day lrr
Kers|rglor Forur lole| ard or|y a leW r|rules' Wa|| lror 0|oucesler Road urdergrourd slal|or
(P|ccad|||y ard 0|slr|cl ||res). ll |s cerlra||y |ocaled W|lr|r lre oorougr ol Kers|rglor ard Cre|sea, c|ose lo
rary rajor lour|sl, ard correrc|a| derard gereralors. Tre surrourd|rg areas oller a r|x ol orarded ard
urorarded role|s, res|derl|a| ard correrc|a| properl|es (ra|r|y rela||) ard a ruroer ol reslaurarls.
Nearoy |s lre Ear|s Courl exr|o|l|or cerlre prov|d|rg sore 5,5Z1 square relers ol exr|o|l|or space,
roWever, lrere are p|ars lo redeve|op lre cerlre |rlo rela|| ard res|derl|a| accorrodal|or so lre lulure ol
lre cerlre rera|rs ur|roWr. Tre ra|r correrc|a| ard oll|ce d|slr|cls ol Lordor are |ocaled |r lre C|ly ol
Lordor ard Carary wrarl (Z.1 |||orelres ard 12.5 |||orelres respecl|ve|y) Wrere rary ol Wor|d's
l|rarc|a| ard oar||rg corpar|es are |ocaled as We|| as corsu|larc|es ard |ega| l|rrs.
Park |nternat|ona| hote|
Address: 11Z-119 CrorWe|| Road, Lordor, 3wZ 10T
No. Roors: 1Z1 roors
Veel|rg 3pace: 1 reel|rg roor
Food & 8everage: Tre 0rcr|d reslaurarl. Tre Crec|rale oar
0lrer Fac|||l|es: 8us|ress Cerlre, 0yrras|ur
3ource: lole| Varagererl
E-79
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page Z9
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lore| Dperaror lnlormar|on
Tre Par| lrlerral|ora| lole| |s operaled oy TCC ard |s currerl|y urorarded ard operales W|lroul ary
all|||al|or or assoc|al|or W|lr a cra|r. Tre properly's s|sler role|, 8esl weslerr Tre CrorWe||, |s |ocaled or
lre sare slreel or lre rorlr erd ard lrere are sore cross-relerra| ous|ress oelWeer lre lWo role|s as
We|| lre properl|es srar|rg deparlrerla| slall lrus a||oW|rg lor cosl ell|c|erc|es ard syrerg|es lor lre role|
operal|ors.
Ex|sr|ng 0omper|r|ve lore|s - Park lnrernar|ona| lore|
Tre suojecl role|'s corpel|l|ve sel |s |derl|l|ed as lo||oWs:
Property Rooms 0perator
Park |nternat|ona| hote| 171 |ndependent
Rad|ssor 8|u EdWard|ar vardero||l lole| 215 Rad|ssor
V|||err|ur 8a||eys Lordor Kers|rglor 211 V|||err|ur lole|s
V|||err|ur 0|oucesler lole| 82 V|||err|ur lole|s
lo||day lrr Kers|rglor Forur 90 lrlercorl|rerla| lole|s 0roup
Tota| Number of Rooms 1,585
3ource: lole| Varagererl
Tre suojecl properly |s ar urorarded role| Wr|cr operales |r lre lour slar (upsca|e) calegory ard ras
oeer rerovaled lo a r|gr slardard (|rc|ud|rg su|les). Reroval|or Was corp|eled |r 2012 ard co|rc|ded
W|lr lre properly oe|rg rerared as lre Par| lrlerral|ora| lole|. lr add|l|or lo lre aoove corpel|lors, Tre
Rydges Kers|rglor a|so corpeles W|lr lre suojecl role|. Vary ooo||rg lo lre properly are rade lrrougr
0r||re Trave| Agerls (0TA's) ard lre role| pays oul a suoslarl|a| arourl |r corr|ss|or lrrougr lrese
|rlerred|ar|es. Tre role| accorrodales a|r||re creW lror u3 A|r||res, accorrodal|rg 12 roors per r|grl,
Wr||e |ey corporale corlracls |rc|ude lrper|a| Co||ege ard Redlerr. Varagererl cors|der lral |ey
opporlur|l|es ex|sl oy Way ol |rcreas|rg ooo||rgs lror corporale c||erls currerl|y accourl|rg lor or|y Z ol
lola| reserval|ors.
Tre corpel|l|ve sel aoove |s rade up ol rucr |arger orarded properl|es Wr|cr rave s|gr|l|carl sa|es ard
rar|el|rg supporl lrrougr lre|r orard's respecl|ve 0|ooa| 0|slr|oul|or 3ysler (003), |oya|ly prograrres
ard slrorg ral|ora| coverage Wr||sl rary corpel|lors a|so rave lre ao|||ly lo der|ve add|l|ora| reverues
lror corlererce ard oarquel|rg as We|| as res|derl|a| corlererces or lre oac| ol rore corprerers|ve
reel|rg lac|||l|es. Norelre|ess, as lre suojecl role| oecores rore eslao||sred ard ou||ds a slrorg |oca|
repulal|or, |l ougrl lo oe poss|o|e lo errarce derard lror lre corporale seclor. lr add|l|or, cors|deral|or
lo a||gr W|lr ar |rlerral|ora| orard r|grl errarce perlorrarce ever lurlrer.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel, Wr|cr |rc|udes lre suojecl role|, Rad|ssor 8|u EdWard|ar vardero||l lole|, lo||day
lrr Lordor Kers|rglor Forur, V|||err|ur 0|oucesler Lordor Kers|rglor, V|||err|ur 8a||eys Lordor
Kers|rglor ard Tre Rydges Kers|rglor Lordor acr|eved a RevPAR ol 9 |r 2013. Tr|s corpares lo
111 acr|eved oy lre W|der Lordor rar|el. As al YT0 0eceroer 2013, RevPAR ol lre corpel|l|ve sel
ras |rcreased 1.5 corpared lo |asl year. Tr|s |s 3.9 aread ol groWlr |r lre gerera| Lordor rar|el.
Tre Par| lrlerral|ora| lole| lra||s oer|rd lre corpel|lor sel |r lerrs ol RevPAR, Wr|cr Was approx|rale|y
25 |oWer lrar |ls corpel|lors al lre erd ol 2013. 3uojecl properly perlorrarce Was doWr 3.3 as al
YT0 0eceroer 2013 as corpared lo lre sare per|od |r 2012.
E-80
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 80
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Park lnrernar|ona| lore|
8trengths weaknesses
Recerl|y rerovaled role| W|lr approx|rale|y
1.5 r||||or sperl or lre projecl
Tre role| ras lre ao|||ly lo dr|ve r|gr roor
rales parl|cu|ar|y W|lr lre su|les or lre
ler|lage l|oor
Cross se|||rg opporlur|l|es ard syrerg|es W|lr
lre 8esl weslerr Tre CrorWe|| lole|
A cerlra||y |ocaled, good lour slar role| W|lr a
roderr sly|e
Lac| ol orard all|||al|or
3ore roors are sra||
Roor s|ze ard des|gr soreWral |rcors|slerl
lrrougroul
Lac| ol corlererce space |r corpar|sor lo
lre corpel|lor role|s
Va|r ||lcrer |r oasererl ollers serv|ce
de||very cra||erges
8rea|lasl roor requ|res roderr|sal|or
0pportun|t|es Threats
8rard all|||al|or W||| oller access lo a W|der
rar|el|rg ard reserval|or sysler
Crarge lre geograpr|c r|x ol lre role| W|lr
rore lror |rlerral|ora| rar|el
0roW lre corporale seclor ous|ress lo
accourl lor arourd 15 ol lre ous|ress r|x
Polerl|a| lo groW oolr A0R ard occuparcy
Tre c|osure ol Ear|s Courl W||| |ead lo sore
|oss ol ous|ress
Tre g|ooa| ellecls ol lre ecoror|c doWrlurr
corl|rue |r lre srorl lerr
Polerl|a| reW role| sloc| |r lre area,
a|lrougr We are rol aWare ol ary |r lre
|rred|ale area
7.8 est western The 6romwe||
Tre suojecl properly lrorls CrorWe|| Road or lre rorlr s|de ard |s or|y a lWo r|rule Wa|| lror 0|oucesler
Road urdergrourd slal|or (P|ccad|||y ard 0|slr|cl ||res). ll |s cerlra||y |ocaled W|lr|r lre 8orougr ol
Kers|rglor ard Cre|sea, c|ose lo rary rajor lour|sl, ard correrc|a| derard gereralors. Tre
surrourd|rg uses corpr|se ol a r|x ol orarded ard urorarded role|s, res|derl|a| ard correrc|a|
properl|es (ra|r|y rela|| ard reslaurarls). Nearoy |s lre Ear|s Courl exr|o|l|or cerlre prov|d|rg sore 5,5Z1
square relres ol exr|o|l|or space, roWever, lrere are p|ars lo redeve|op lre cerlre |rlo rela|| ard
res|derl|a| accorrodal|or.
0
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80
100
120
110
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Park |nternat|ona| hote| RevPAR 2013
Par| lole| lrlerral|ora| RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-81
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 81
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
est western The 6romwe||
Address: 110 CrorWe|| Road
Lordor 3wZ 1E3
No. Roors: 85 roors
Veel|rg 3pace: 1 reel|rg roor (8 peop|e)
Food & 8everage: 1 oar, 1 orea|lasl roor (10 covers)
0lrer Fac|||l|es: gyrras|ur roor
3ource: lole| Varagererl
lore| Dperaror lnlormar|on
Tre role| |s operaled oy TCC ard |s all|||aled W|lr lre 8esl weslerr rar|el|rg corsorl|a. A year|y
reroersr|p lee |s pa|d a|org W|lr a percerlage ol roors' corr|ss|or. 8esl weslerr ollers lrree l|ers:
8esl weslerr, 8esl weslerr P|us ard 8esl weslerr Prer|er ard rosl reroers are pos|l|ored |r lre r|d-
rar|el or upsca|e segrerl. Trere are rurerous properl|es ol d|llererl sly|es, des|gr ard l|l-oul all|||aled
lo 8esl weslerr resu|l|rg |r a soreWral ec|ecl|c ard |rcors|slerl orard|rg propos|l|or. Tre |ey allracl|ors
ol lre all|||al|or are lre access lo a 0|ooa| 0|slr|oul|or 3ysler (003) ard a sa|es ard rar|el|rg supporl.
Accord|rg lo role| raragererl, lrere ras oeer a y-o-y dec||re |r ous|ress lror lre 003 sysler Wr|cr
currerl|y prov|des approx|rale|y 11 ol lre role|'s reserval|ors W|lr rary ol lre rera|r|rg ooo||rgs
cor|rg lrrougr 0r||re Trave| Agerls (0TA's) sucr as role|ooo||rgs.cor ard Exped|a.
Tre suojecl role| |s a|so |ocaled |r c|ose prox|r|ly lo |ls s|sler role|, lre Par| lrlerral|ora| lole| Wr|cr |s
oWred ard operaled oy TCC. Trere are sore cross-relerra| opporlur|l|es oelWeer lre lWo role|s as We||
W|lr lre properl|es srar|rg deparlrerla| slall lrus a||oW|rg lor cosl ell|c|erc|es ard syrerg|es lor lre role|
operal|ors.
Ex|sr|ng 0omper|r|ve lore|s - 3esr wesrern Tne 0romue||
Tre suojecl role|'s corpel|l|ve sel |s |derl|l|ed as lo||oWs:
Property Rooms 0perator
est western The 6romwe|| 85 est western
Rad|ssor 8|u EdWard|ar vardero||l lole| 215 Rad|ssor
V|||err|ur 8a||eys Lordor Kers|rglor 211 V|||err|ur
Vercure Lordor Kers|rglor 82 Accor lole|s
Tre Rydges Kers|rglor 81 lrdeperderl
Tota| Number of Rooms 74
3ource: lole| Varagererl
w|lr lre excepl|or ol Tre Rydges, lre corpel|l|ve sel aoove |s rade up ol rucr |arger orarded properl|es
Wr|cr rave s|gr|l|carl sa|es ard rar|el|rg supporl lrrougr lre|r orard's respecl|ve 003, |oya|ly
prograrres ard slrorg ral|ora| coverage Wr||sl rary corpel|lors a|so rave lre ao|||ly lo der|ve add|l|ora|
reverues lror Corlererce ard 8arquel|rg as We|| as res|derl|a| corlererces or lre oac| ol rore
corprerers|ve reel|rg lac|||l|es. lole| lrd|go Lordor Kers|rglor, |ocaled |r lre v|c|r|ly ol lre suojecl
role|, |s a|so cors|dered a corpel|lor.
Tre suojecl properly or|y prov|des ore reel|rg roor Wr|cr |s se|dor so|d lo lre puo||c as |l does rol rave
ralura| ||grl ard car or|y accorrodale e|grl peop|e. Tre role| does rave a ruroer ol sra|| corporale
accourls W|lr lre |||es ol Redlerr, lrper|a| Co||ege ard V|r|sler|a| Jusl|ce Wr|cr are |ocaled |r lre area
ard prov|de approx|rale|y 200 lo 500 roor r|grls or average per arrur.
E-82
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 82
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel, Wr|cr |rc|udes lre suojecl role|, Rad|ssor 8|u EdWard|ar vardero||l lole|, V|||err|ur
8a||eys Lordor Kers|rglor, Vercure Lordor Kers|rglor ard Tre Rydges Kers|rglor Lordor acr|eved a
RevPAR ol 9Z |r 2013. Tr|s corpares lo 111 acr|eved oy lre W|der Lordor rar|el. As al YT0
0eceroer 2013, RevPAR ol lre corpel|l|ve sel ras |rcreased Z.9 as corpared lo |asl year. Tr|s |s
Z.3 aread ol groWlr |r lre gerera| Lordor rar|el.
Tre CrorWe|| lra||s oer|rd lre corpel|lor sel |r lerrs ol RevPAR, Wr|cr Was approx|rale|y 2Z |oWer al
lre erd ol 2013. Tre suojecl properly perlorrarce Was up 2.2 as al YT0 0eceroer 2013 as corpared
lo lre sare per|od |r 2012. Tr|s |s correrdao|e |r ||grl ol lre properly corslra|rls (|ac| ol lac|||l|es, sra||
roor s|zes elc).
0o|rg lorWard We cors|der lral lrere |s ||r|led roor lor perlorrarce groWlr due lo lre properly
corslra|rls a|lrougr a sr|ll |r rar|el segrerlal|or r|grl oe oerel|c|a| lo |rprove lre properly's A0R.
$wDT /na|,s|s ol 3esr wesrern Tne 0romue||
8trengths weaknesses
A good cerlra| |ocal|or c|ose lo rary
derard gereralors lor |e|sure oased c||erls
Cross se|||rg ard operal|rg syrerg|es W|lr
lre Par| lrlerral|ora| lole| |ocaled or
CrorWe|| Road
Tre role| ras a slao|e slall oase
we||-ra|rla|red good qua||ly role|
Tre oedroors are sra|| ard lrerelore carrol
corrard r|gr rales
L|r|led reel|rg space
L|r|led reslaurarl ard oar prov|s|or
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est western The 6romwe|| RevPAR 2013
Properly RevPAR Corpel|l|ve 3el RevPAR 3ource: 3TR 0|ooa|
E-83
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 83
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0pportun|t|es Threats
Trere are proposa|s lo upgrade lre grourd
l|oor area lo ra|e |l rore We|cor|rg
Tre c|osure ol Ear|s Courl r|grl resu|l |r |ess
everl |ed ous|ress |r lre |oca| rar|el
lrcrease |r roor sloc| |r lre area, a|lrougr
We rave rol oeer rade aWare ol ary |r lre
|rred|ale area
NeW role| supp|y |r lre |oca| area
7.9 Fraser P|ace 6anary wharf
Tre suojecl properly operales |r a del|red r|cro rar|el W|lr|r Lordor Carary wrarl ard 0oc||ards,
|ocaled lo lre easl ol Lordor Wr|cr |s parl ol Tre 8orougr ol ToWer lar|els. ll |s pos|l|ored or 8oardWa||
P|ace, ore ol lre pr|rc|pa| erlry ard ex|l po|rls |rlo lre eslale. Carary wrarl |s ore ol Lordor's ra|r
l|rarc|a| ard serv|ce d|slr|cls a|org W|lr lre C|ly ol Lordor ard ras deve|oped arourd 11,000,000 square
leel (1,300,000 square relers) ol oll|ce ard rela|| space. Vary ol lre Europear readquarlers ol rurerous
rajor oar|s, proless|ora| serv|ces l|rrs ard red|a orgar|sal|ors |rc|ud|rg 8arc|ays, C|l|group, C||llord
Crarce, Cred|l 3u|sse, F|lcr Ral|rgs, l38C, J.P. Vorgar, KPV0, VelL|le, Vorgar 3lar|ey, 3|adder,
3lale 3lreel ard Trorsor Reulers are |ocaled W|lr|r lre eslale.
Fraser P|ace 6anary wharf
Address: 80 8oardWa|| P|ace,
Lordor, E11 53F
No. Aparlrerls: Currerl|y 9 aparlrerls. Fror Vay 2011 W||| oe
108 ur|ls.
Food & 8everage: Var|ra Cal
0lrer Fac|||l|es: Laurdry roor, 0yrras|ur roor,
Car par||rg
3ource: lole| Varagererl
lore| Dperaror lnlormar|on
Fraser P|ace Carary wrarl |s operaled oy Frasers losp|la||ly. P|ease reler lo 3ecl|or 3.8 Fraser 3u|les
3|rgapore - 3erv|ced Aparlrerl 0peralor lrlorral|or lor rore |rlorral|or.
Ex|sr|ng 0omper|r|ve lore|s - Fraser P|ace 0anar, wnarl
Tre suojecl role|'s corpel|l|ve sel |s |derl|l|ed as lo||oWs:
Property Rooms 0perator
Fraser P|ace 6anary wharf 108 Fraser hosp|ta||ty
Varr|ol Lordor wesl lrd|a 0uay 301 Varr|oll
Varr|ol Execul|ve Aparlrerls Lordor wesl lrd|a 0uay 1Z Varr|oll
l||lor Carary wrarl 282 l||lor
Rad|ssor EdWard|ar 8|u NeW Prov|derce wrarl 19 Rad|ssor
Tota| Number of Rooms 907
3ource: lole| Varagererl
E-84
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 81
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Tre aoove corpel|lor sel ras oeer |derl|l|ed oy lre role| ard corpr|ses role|s |ocaled W|lr|r lre Carary
wrarl eslale. lr add|l|or, lre C|rcus Aparlrerls oy 8r|dgeslreel, lre Var||r Aparlrerls ard lre Larlerrs
Courl a|so corpele W|lr lre suojecl properly. Tre Varr|oll Execul|ve Aparlrerls are s|r||ar lo lre suojecl
properly |r lerrs ol producl oller|rg; roWever, lrey rave leWer roors ard are operaled |r corjurcl|or W|lr
Varr|oll lole| al wesl lrd|a 0uay. Tre olrer properl|es are lu|| serv|ce role|s W|lr |arge corlererce ard
oarquel|rg space. Fo||oW|rg our or|el d|scuss|or W|lr raragererl lrey rave a|so |derl|l|ed a secordary
corpel|l|ve sel Wr|cr |s rore corparao|e lo lre suojecl properly ard |rc|udes olrer serv|ced aparlrerl
sly|e oller|rgs |ocaled |r Carary wrarl. we role lral lre serv|ced aparlrerl accorrodal|or |s
lragrerled |r lre area as lrere |s a r|gr vo|ure ol res|derl|a| o|oc|s Wrere sore ol lre aparlrerls are
re|eased lo lr|rd parly operalors sucr as 8r|dge 3lreel, Var||r or 3|y||re aparlrerls lo 'rerl' or ar ad roc
oas|s ard lrerelore lre rar|el |s cra||erg|rg lo ara|yse. Accord|rg lo arecdola| |rlorral|or prov|ded oy
raragererl, approx|rale|y 9 ol guesls rave ar average |erglr ol slay oelWeer ore lo s|x r|grls ard
lrerelore lre properly lrer oecores rore corparao|e lo lre role| sloc| as |derl|l|ed aoove.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel, Wr|cr |rc|udes lre suojecl properly, Varr|oll Lordor wesl lrd|a 0uay, Varr|oll
Execul|ve Aparlrerls wesl lrd|a 0uay, l||lor Lordor Carary wrarl, Rad|ssor 8|u EdWard|ar NeW
Prov|derce wrarl lole| Lordor acr|eved a RevPAR ol 121.0 |r 2013. Tr|s corpares lo 111 acr|eved
oy lre W|der Lordor rar|el. lr v|eW ol lre lrad|rg lurdarerla|s lral urderp|r lre rar|el's perlorrarce
We cors|der lre sel's perlorrarce lo oe very slrorg |r v|eW ol r|gr |eve|s ol corporale derard, |e|sure
derard (02 Arera) ard lre orgo|rg success ol lre Exce| Exr|o|l|or Cerlre.
Tre suojecl properly ras corl|rued lo oulperlorr lre rar|el. Tr|s |s expecled g|ver lre ralure ol lre
suojecl properly re|al|ve lo a sel Wr|cr |s |arge|y rade up ol lu|| serv|ced role|s W|lr a |arger reel|rg roor
oller|rg ard lrerelore lre reverue prol||e W||| d|ller greal|y lror lre suojecl properly. Tre average |erglr ol
slay a|so delerr|res lre rales acr|eved al lre suojecl properly ard lrey Wou|d oe |oWer as lre corpel|l|ve
role|s Wou|d Wor| or ore or lWo r|grl slays ard corrard r|grer prer|ur rales.
Fraser P|ace Carary wrarl |s currerl|y urdergo|rg ar exlers|ve reroval|or prograr Wrere lre ruroer ol
aparlrerls |s oe|rg |rcreased lror 9 lo 10Z oy Vay 2011. we urderslard lral lre properly |rlerds lo
|rcrease lre ruroer ol slud|o aparlrerls due lo r|grer derard lor lr|s accorrodal|or lype. 0|ver lral
lre |rverlory |s due lo oe |rcreased ard lre properly W||| oe lu||y reluro|sred |rc|ud|rg lre grourd l|oor, We
expecl lrere lo oe sore |rcrease |r rale over lre rexl leW years W|lr occuparcy rera|r|rg slao|e.
8y lre erd ol 2013, lre suojecl properly's RevPAR Was approx|rale|y .9 |oWer lrar |ls corpel|lors.
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Fraser P|ace 6anary wharf RevPAR 2013
Fraser P|ace Carary wrarl RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-85
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 85
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser P|ace 0anar, wnarl
8trengths weaknesses
Tre slrerglr ol lre r|cro |ocal|or lral lre
properly operales |r re|ps |l lo acr|eve r|gr
occuparcy |eve|s
Tre aparlrerls are gererous |r roor s|zes
|r corpar|sor lo roors ollered oy lu|| serv|ce
role|s
0versp||| derard lror lre 02 arera ard lre
Exce| Exr|o|l|or Cerlre
Tre reroval|or W||| |rcrease lre appea| ol lre
properly
Frasers losp|la||ly |s a re|al|ve|y ur|roWr
orard W|lr or|y lour olrer properl|es |r lre
uK
No corlererce lac|||l|es are ollered al lre
properly ard lrerelore lre reverue |s dr|ver
or|y oy lre roors
0pportun|t|es Threats
Tre orard |s groW|rg |r lre uK ard ras oeer
|r Carary wrarl lor over 11 years
Tre polerl|a| lo caplure rore corporale
ous|ress lo||oW|rg lre cap|la| |rveslrerl |r
lo lre properly ard polerl|a||y |rcrease A0R
Polerl|a| lo lurlrer groW derard lror lre
corporale seclor go|rg lorWard
Tre corl|rued |rcrease |r serv|ced
aparlrerls oy lr|rd parly operalors |r lre
|ocal|or
NeW supp|y ol role| accorrodal|or |r lre
v|c|r|ly. we are aWare lral p|arr|rg
perr|ss|ors lor deve|oprerls al Pr|de P|ace
ard wood wrarl |rcorporale role| screres,
a|lrougr We are rol aWare ol lre proposed
l|r|rg ol lre deve|oprerl
Tre g|ooa| ecoror|c urcerla|rly corl|rues |r
lre srorl lo red|ur lerr
7.10 Fraser 8u|tes 0ueens Cate
Tre recerl|y reluro|sred Fraser 3u|les 0ueers 0ale |s |ocaled |r lre rearl ol Kers|rglor, jusl oll CrorWe||
Road or 0ueers 0ale 0arders. Tre area |s |roWr lor |ls c|usler ol orarded lrree ard lour slar role|s
|rlerspersed W|lr sore urorarded guesl accorrodal|or. Tre |rred|ale area |s rade up ol rela||, pr|vale
dWe|||rgs ard role| accorrodal|or. Corver|erl|y |ocaled lo lre Wesl ol lre suojecl properly |s lre Ear|s
Courl Exr|o|l|or Cerlre prov|d|rg sore 5,5Z1 square relers ol exr|o|l|or space, roWever, lrere are p|ars
lo redeve|op lre cerlre |rlo rela|| ard res|derl|a| accorrodal|or so lre lulure ol lre cerlre rera|rs
ur|roWr. Tre ra|r correrc|a| ard oll|ce d|slr|cls ol Lordor are |ocaled |r lre C|ly ol Lordor ard Carary
wrarl (Z.1 |||orelres ard 12.5 |||orelres respecl|ve|y) Wrere rary ol Wor|d's l|rarc|a| ard oar||rg
corpar|es are |ocaled as We|| as corsu|larc|es ard |ega| l|rrs ard car oe reacred oy road, ra|| or lax|.
Fraser 8u|tes 0ueens Cate, London
Address: 398 0ueers 0ale 0arders,
Lordor 3wZ 5RR R
No. Aparlrerls: 105 aparlrerls
8ar: L|cersed oar
Veel|rg 3pace: Veel|rg roor (rax|rur 30 peop|e)
Food & 8everage Kers|rglor Cal - orea|lasl roor W|lr pr|vale
ouldoor courlyard
0lrer Fac|||l|es: 3e|l-serv|ce |aurdry roor, ous|ress cerlre
3ource: lole| Varagererl
E-86
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 8
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$erv|ceo /parrmenr Dperaror lnlormar|on
Fraser 3u|les 0ueers 0ale |s operaled oy Frasers losp|la||ly. P|ease reler lo 3ecl|or 3.8 Fraser 3u|les
3|rgapore - 3erv|ced Aparlrerl 0peralor lrlorral|or lor rore |rlorral|or.
Ex|sr|ng 0omper|r|ve lore|s - Fraser $u|res Dueens Sare, lonoon
8ased or d|scuss|ors W|lr raragererl lre lo||oW|rg (aparl) role|s rave oeer |derl|l|ed as ra|r
corpel|l|or:
Property Rooms 0perator
Fraser 8u|tes 0ueens Cate, London 105 Frasers hosp|ta||ty
C|lad|res 3oulr Kers|rglor 92 C|lad|res
Tr|r| Aparlrerls Ear|s Courl 200 Tr|r|
Rad|ssor 8|u EdWard|ar vardero||l 215 Rez|dor
V|||err|ur 8a||eys lole| 211 V|||err|ur & Coplrorre
Tota| Number of Rooms 823
3ource: lole| Varagererl
lr add|l|or lo lre properl|es ||sled, lre suojecl properly a|so corpeles, al l|res, W|lr rearoy Fraser 3u|les
Kers|rglor Wr|cr ollers 9 aparlrerls as We|| as Tre larr|rglor.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel |rc|udes lre Rad|ssor 8|ue EdWard|ar vardero||l lole|; lre CroWre P|aza Lordor
Kers|rglor; lre 0ueer's 0ale lole|; Tre 0ore lole|; C|lad|res Presl|ge 3oulr Kers|rglor Lordor; ard
lre Varr|oll Lordor lole| Kers|rglor.
Tre suojecl properly Was or|y lu||y reopered |r 0clooer 2013 Wr|cr reslr|cls ary rear|rglu| correrlary
or |ls lrad|rg perlorrarce.
Average |erglr ol slay |s approx|rale|y s|x lo sever r|grls oul raragererl are corl|derl lral lr|s car oe
|rcreased lo arourd 10 r|grls. Parl|a| RevPAR lor 2013 al YT0 0eceroer 2013 Was approx|rale|y 15
r|grer lrar |ls corpel|l|ve sel.
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Fraser 8u|tes 0ueens Cate RevPAR 2013
Fraser 3u|les 0ueers 0ale RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-87
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 8Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser $u|res Dueens Sare
8trengths weaknesses
Tre |ocal|or ol lre role| |s very cerlra| ard
c|ose lo rajor lour|sl ard rela|| desl|ral|ors
|r Lordor
Tre properly ras oeer lu||y rerovaled lo a
corlerporary sly|e
A|| aparlrerls rave ou||l |r ||lcrerelles W|lr
over 5 prov|d|rg a Wasrer/dryer
Fraser 3u|les |s a re|al|ve|y ur|roWr orard
W|lr or|y lour olrer properl|es |r lre uK
lrred|ale area |s a Wea| derard source lor
r|grer erd |org slay derard
Nol |r c|ose prox|r|ly lo rajor oll|ce d|slr|cls
sucr as lre C|ly ol Lordor ard Carary
wrarl
0pportun|t|es Threats
Fo||oW|rg lre recerl cap|la| |rveslrerl, lrere
|s polerl|a| lo groW lre A0R ol lre properly
To ou||d or |rcreas|rg ous|ress lror
corporale c||erls
Polerl|a| lrreal ol reW supp|y or crarge ol
use lo role| accorrodal|or |r lre |rred|ale
area, a|lrougr We rave rol oeer rade
aWare ol ary
Polerl|a| c|osure ol lre Ear|s Courl exr|o|l|or
ra||
Corl|rued g|ooa| ecoror|c urcerla|rly
allecl|rg lre derard lor role|
accorrodal|or
E-88
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 88
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
8 Glasgow Market Overview
8.1 Execut|ve 8ummary
3|lualed |r lre cerlra| oe|l ol 3col|ard or lre Wesl coasl, 0|asgoW |s lre correrc|a| cap|la| ard lre |argesl
c|ly |r 3col|ard W|lr a lola| popu|al|or ol approx|rale|y 00,000. lr recerl years, 0|asgoW ras roved
lror a posl-|rduslr|a| c|ly lo ar ecoror|ca||y regereraled c|ly. 0|asgoW |s a|so Europe's laslesl groW|rg
corlererce desl|ral|or W|lr lre 3coll|sr Exr|o|l|or ard Corlererce Cerlre (3ECC) oecor|rg |rcreas|rg|y
popu|ar lor rajor exr|o|l|ors ard everls. Vajor everls ard allracl|ors |r lre c|ly |rc|ude:
Tre 0|asgoW F||r Fesl|va|
0|asgoW lrlerral|ora| Coredy Fesl|va|
Tre wesl Erd Fesl|va|
0|asgoW lrlerral|ora| Jazz Fesl|va|
3lralrc|yde Courlry Par|
Ke|v|rgrove Arl 0a||ery ard Vuseur
0rurpe|||er Courlry Par|
Ca|derg|er Courlry Par|
0|asgoW 3c|erce Cerlre
Tre Ta|| 3r|p
Tre 0|asgoW role| rar|el currerl|y ollers 83 graded role|s ard Z,312 graded role| roors. lole| supp|y |s
corcerlraled |r lre r|d-rar|el segrerl (2Z ol lola| supp|y), W|lr lre oudgel ard lour-slar segrerls
represerl|rg a lurlrer 19 ard 21 ol supp|y respecl|ve|y. Trere are or|y lWo l|ve-slar role|s preserl |r
lre c|ly.
As al Vay 2011, lrere are 10 serv|ced aparlrerl properl|es |ocaled across 0|asgoW, represerl|rg a supp|y
ol 30Z ur|ls. Tre vasl rajor|ly ol lrese are oWrer-operaled, corpr|s|rg over 80 rar|el srare.
0|asgoW ras r|slor|ca||y ra|rla|red a r|gr occuparcy, W|lr lre gerera| rar|el corlorlao|y s|ll|rg |r lre
r|d Z0 calegory lo||oW|rg a |oW ol Z1.3 |r 2005. Tre l|uclual|ors |r 0|asgoW's A0R corre|ale W|lr lre
add|l|or ol reW supp|y, lor exarp|e dur|rg lre course ol 200Z, 190 |eys Were added (3 |rcrease |r
supp|y) Wr|cr resu|led |r a 3 dec||re |r y|e|d |r 2008.
8.2 Tour|sm 0verv|ew
0|asgoW |s ore ol lre uK's rosl v|s|led c|l|es ard v|s|lors are allracled oy lre c|ly's Wea|lr ol cu|lura|
allracl|ors ard acl|v|l|es. Tre c|ly ollers over 20 ruseurs ard ga||er|es, eacr W|lr |ls oWr |rd|v|dua|
co||ecl|or ard everls prograr.
Tre c|ly |s a rajor rela|| cerlre, ooasl|rg ore ol lre uK's |argesl sropp|rg cerlres. 8ucrarar 0a||er|es |s
currerl|y lre |argesl c|ly cerlre sropp|rg deve|oprerl |r 3col|ard, supp|ererled oy rajor add|l|ora|
sropp|rg cerlres al Pr|rces 3quare, 3l Erocr ard lre lla||ar Cerlre. Tre c|ly's reW 8ucrarar 0uarler,
|ocaled |r lre area surrourd|rg lre lop ol 8ucrarar 3lreel, 0|asgoW's reroWred sropp|rg slreel, |s
expard|rg lo |rc|ude reW rela|| ard c|ly aparlrerls, add|rg lo 8ucrarar 0a||er|es ard lre Roya| Corcerl
la||.
E-89
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 89
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
v|s|lors are a|so allracled oy lre |arge var|ely ol lesl|va|s re|d |r lre c|ly dur|rg lre year, |rc|ud|rg lre
0|asgoW Coredy Fesl|va|, 0|asgoW Jazz Fesl|va|, Ce|l|c Correcl|ors, 0|asgoW F||r Fesl|va|, wesl Erd
Fesl|va|, Vercrarl C|ly Fesl|va|, 0|asgoW ard lre wor|d P|pe 8ard Crarp|orsr|ps. lr add|l|or, lre c|ly |s
rore lo 3col|ard's |argesl looloa|| slad|urs; Ce|l|c Par| (2,832 seals), lorox 3lad|ur (50,111 seals) ard
larpder Par| (52,Z0 seals), Wr|cr |s 3col|ard's ral|ora| looloa|| slad|ur.
lnrernar|ona| v|s|ror /rr|va|s
Accord|rg lo lre |alesl arrua| |rlerral|ora| lour|sl arr|va|s slal|sl|cs lror v|s|l 3col|ard, lre lola| ruroer ol
arr|va|s lo lre c|ly ol 0|asgoW reacred 515,000 |r 2013, 1.2 doWr or lre pr|or year. Tr|s |s approx|rale|y
210,000 arr|va|s oll lre 200Z-pea|. 0esp|le lr|s, lre upcor|rg 2011 CorrorWea|lr 0ares, Ryder Cup
ard lorecor|rg year are |||e|y lo dr|ve add|l|ora| arr|va|s lo lre c|ly.
0omesr|c v|s|ror /rr|va|s
Z11 Z55
29
23
551
1Z5
521
515
-30
-20
-10
0
10
20
30
10
0
100
200
300
100
500
00
Z00
800
200 200Z 2008 2009 2010 2011 2012 2013
A
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|nternat|ona| V|s|tor Arr|va|s to C|asgow
v|s|lor Arr|va|s ('000) Arrua| 0roWlr () 3ource: v|s|l 3col|ard
1,55
1,Z12
1,312
1,508
1,5Z
1,Z28
1,91
-10
-30
-20
-10
0
10
20
30
10
0
200
100
00
800
1,000
1,200
1,100
1,00
1,800
2,000
200 200Z 2008 2009 2010 2011 2012
A
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0
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0omest|c V|s|tor Arr|va|s to C|asgow
v|s|lor Arr|va|s ('000) Arrua| 0roWlr () 3ource: v|s|l 3col|ard
E-90
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 90
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0|asgoW's lour|sr |s r|gr|y deperderl or doresl|c v|s|lors, Wr|cr represerls approx|rale|y Z.Z ol lola|
arr|va|s |r 2013. worser|rg ecoror|c cord|l|ors rave |rpacled v|s|lor arr|va|s as lre c|ly, |||e rary olrer
uK reg|ora| c|l|es, ras sullered lror a decrease |r everls ard |e|sure lour|sr. loWever, lre uK's
recess|or ard Wea|er|rg pourd ras dr|ver rore uK res|derls lo lrave| doresl|ca||y, oerel|ll|rg c|l|es
sucr as 0|asgoW.
$easona||r,
0erard |r 0|asgoW usua||y pea|s oelWeer Augusl ard 0clooer. Tr|s |s due lo a coro|ral|or ol slrorg
corporale ard |e|sure derard. 3evera| rajor everls are re|d lo co|rc|de W|lr lre surrer ro||days,
|rc|ud|rg lre arrua| P|p|rg L|ve ard Vercrarl C|ly Fesl|va|s. Trese everls allracl approx|rale|y Z0,000
v|s|lors arrua||y. Tre corverl|or ca|erdar r|grl a|so resu|l |r slrorg pea|s |r derard a|lrougr lr|s var|es
lror year lo year. Jaruary ard 0eceroer are lyp|ca||y |oW seasors due lo lre co|d W|rlers.
/verage lengrn ol $ra,
Approx|rale|y 80 ol doresl|c v|s|lors slay oelWeer ore ard lrree r|grls |r 0|asgoW ard ar esl|raled
10 ol doresl|c v|s|lors slay oelWeer lour ard sever r|grls. As corpared lo 3col|ard, ar esl|raled 5
ol doresl|c v|s|lors slay lor ore lo lrree r|grls Wr||e a |arger proporl|or ol 25 slay lor lour lo sever
r|grls. Tre average lr|p dural|or lor overseas lour|sls Was .1 days as corpared W|lr doresl|c lour|sls
Wr|cr Was recorded al 2.1 days.
0
200,000
100,000
00,000
800,000
1,000,000
1,200,000
Jar Feo Var Apr Vay Jur Ju| Aug 3ep 0cl Nov 0ec
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3easora||ly - v|s|lor Arr|va|s lo 0|asgoW lrlerral|ora| A|rporl
2005 200 200Z 2008 2009 2010 2011 2012 2013
3ource: LlR A|rporls L|r|led Vorlr|y Trall|c 3lal|sl|cs
E-91
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 91
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Seograpn|c Dr|g|n
Tre |ey lour|sr source rar|els lor 0|asgoW |r 2011 (|alesl dala ava||ao|e) |rc|udes 0errary, lre u3A,
Carada, Frarce ard 3pa|r - corpr|s|rg a lola| ol 50.0 ol a|| arr|va|s lo lre c|ly. 0errary |s lre lop
source rar|el lo 0|asgoW, W|lr a 15.0 rar|el srare, |rcreas|rg oy 1.0 percerlage po|rls lror lre pr|or
year. Tre u3A lo||oWed c|ose|y oer|rd al 11.0 al a s|r||ar rale ol |rcrease.
Tola| v|s|lor sperd |r 2011 reacred 193 r||||or, W|lr v|s|lors lror lre u3A secur|rg 11.0 ol lola| lour|sr
experd|lure. v|s|lors lror 0errary, Frarce ard Auslra||a Were lre secord o|ggesl sperders, eacr
corlr|oul|rg lo 10 ol lola| experd|lure.
Purpose ol v|s|r
0
500
1,000
1,500
2,000
2,500
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Top 8ource Harkets to C|asgow |n 2011 - y 6ountry of Res|dence
2010 2011
3ource: v|s|l 3col|ard
lo||day, 5Z
v|s|l|rg Fr|erds &
Re|al|ves, 22
8us|ress, 1Z
0lrer, 1
Purpose of V|s|t |n 2012
lo||day v|s|l|rg Fr|erds & Re|al|ves 8us|ress 0lrer
3ource: v|s|l 3col|ard
E-92
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 92
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lo||day v|s|lors accourl lor lre |argesl proporl|or ol |rlerral|ora| v|s|lors lo 0|asgoW, W|lr approx|rale|y
5Z ol lre lola|. vFR accourled lor a lurlrer 22.0 ol lola| v|s|lors, lo||oWed oy ous|ress (1Z) ard olrer
(3.8).
Tre lop l|ve v|s|lor allracl|ors |r 2012 Were as lo||oWs:
3lralrc|yde Courlry Par|, VolrerWe|| (5,521,31 v|s|lors)
Ke|v|rgrove Arl 0a||ery ard Vuseur, 0|asgoW (1,03Z,591 v|s|lors)
R|vers|de Vuseur, 0|asgoW (1,008,092 v|s|lors)
0rurpe|||er Courlry Par|, VolrerWe|| (9,295 v|s|lors)
Ca|derg|er Courlry Par|, Easl K||or|de (855,93 v|s|lors)
Tre corlererce ard everls seclor |s ar |rporlarl seclor lor 0|asgoW's ecorory. Approx|rale|y 10.0 ol
a|| ous|ress lrave| |r 3col|ard la|es p|ace |r ard arourd 0|asgoW. Accord|rg lo lre lrlerral|ora| Corgress
ard Corverl|or Assoc|al|or (lCCA), 0|asgoW Was lre uK's lr|rd corlererce desl|ral|or |r 2012 ard Was
rar|ed 8lr |r lre Wor|d lor lre ruroer ol |rlerral|ora| assoc|al|or reel|rgs re|d.
re, 0emano 0r|vers
3|lualed |r lre cerlra| oe|l ol 3col|ard or lre Wesl coasl, 0|asgoW |s lre correrc|a| cap|la| ard lre |argesl
c|ly |r 3col|ard. Tre c|ly ras lre secord |argesl sropp|rg cerlre |r lre uK aller Lordor. lr recerl years,
0|asgoW ras roved lror a posl-|rduslr|a| c|ly lo ar ecoror|ca||y regereraled c|ly. Vajor regereral|or
projecls |rc|ude lre 0|asgoW laroour projecls, 0ueers 0oc| 2 projecl ard deve|oprerls ol severa|
sropp|rg cerlres.
0|asgoW |s a|so Europe's laslesl groW|rg corlererce desl|ral|or W|lr lre 3coll|sr Exr|o|l|or ard
Corlererce Cerlre (3ECC) oecor|rg |rcreas|rg|y popu|ar lor rajor exr|o|l|ors ard everls. 0|asgoW's
ra|r verue |s lre 3ECC, |r Wr|cr rosl ral|ora| ard |rlerral|ora| everls are re|d. Tre 3ECC |s 3col|ard's
ral|ora| verue lor puo||c everls ard lre uK's |argesl |rlegraled exr|o|l|or ard corlererce cerlre. Tre
Cerlre ollers l|ve exr|o|l|or ra||s rarg|rg lror ZZ5 square relres lo 10,05 square relres ard a|so
lealures ar aud|lor|ur lor 3,20 de|egales. Tre reW 33E lydro Arera, Wr|cr opered or 30 3epleroer
2013, W||| oe a s|gr|l|carl derard dr|ver lor lre 3ECC, Wr|cr W||| lurdarerla||y |rcrease lre acl|v|ly W|lr|r
lre 3ECC carpus.
w|lr a seal|rg capac|ly ol 12,000 lre 33E lydro Arera W||| errarce lre 3ECC's ex|sl|rg lac|||l|es, ard W|||
p|ay rosl lo arourd 110 everls every year. Tre 33E lydro W||| allracl ar aud|erce ol ore r||||or v|s|lors
eacr year, Wr|cr pos|l|ors |l as lre l|llr ous|esl erlerla|rrerl arera |r lre Wor|d, a|orgs|de |cor|c verues
|||e Vad|sor 3quare 0arder ard Tre 02 arera. Tre 33E lydro Arera ras lre polerl|a| lo |rjecl ar
add|l|ora| 131 r||||or arrua||y |rlo lre |oca| ecorory.
lr arl|c|pal|or ol lre CorrorWea|lr 0ares |r surrer 2011, 0|asgoW ras oeer pul |r lre |rlerral|ora|
spol||grl. lr add|l|or, lre corp|el|or ol lre 33E lydro Arera prov|des 0|asgoW W|lr a slale-ol-lre-arl
corcerl verue. Tre Year ol lorecor|rg ard Ryder Cup |r 2011 are a|so rajor everls sel lo corlr|oule lo
lre 3coll|sr ecorory over lre cor|rg 18 rorlrs dr|v|rg |rcreases |r doresl|c lour|sr, lurlrer supporled
oy suoslarl|a| |rlraslruclure |rprovererls aread ol lre 2011 CorrorWea|lr 0ares.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
0|asgoW Cerlra| Ra|| 3lal|or |s lre ous|esl ra|| slal|or |r lre uK ouls|de Lordor. Tre slal|or serves a|| ol
lre 0realer 0|asgoW coruroal|or's soulrerr suouros ard loWrs, ard lre Ayrsr|re ard C|yde coasls, ard |s
E-93
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 93
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lre lerr|rus lor a|| |rler-c|ly serv|ces oelWeer 0|asgoW ard desl|ral|ors |r Erg|ard. Trere |s a|so a ||r|led
serv|ce lo Ed|rourgr a|lrougr lre c|ly's secord ra|r||re lerr|rus, 0|asgoW 0ueer 3lreel, |s lre pr|rc|pa|
slal|or lor lra|rs lo Ed|rourgr.
w|lr |alesl dala |rd|cal|rg over 2Z r||||or passerger erlr|es ard ex|ls oelWeer Apr|| 2012 ard Feoruary
2013, 0|asgoW Cerlra| |s lre lerlr-ous|esl ra||Way slal|or |r 8r|la|r, lre ous|esl |r 3col|ard ard lre secord
ous|esl ouls|de Lordor. Accord|rg lo NelWor| Ra||, over 38 r||||or peop|e use |l arrua||y, 80 ol Wror
are passergers. Tre slal|or |s prolecled as a Calegory A ||sled ou||d|rg.
0|asgoW 0ueer 3lreel Ra|| 3lal|or serves lre 0realer 0|asgoW coruroal|or's rorlrerr loWrs ard suouros,
lre Ed|rourgr srull|e, ard |s lre lerr|rus lor a|| |rler-c|ly serv|ces lo desl|ral|ors |r lre Norlr ol 3col|ard.
ll |s lre lr|rd ous|esl ra|| slal|or |r 3col|ard.
0|asgoW |s rosl|rg lre CorrorWea|lr 0ares |r 2011 ard lr|s ras gereraled s|gr|l|carl |rlraslruclure
deve|oprerl. Ar or-go|rg regereral|or prograr |s corl|ru|rg a|org lre C|yde walerlrorl W|lr a r|xlure ol
res|derl|a|, role|, oll|ce ard lour|sl allracl|ors e|lrer |r lre p|arr|rg slage or a|ready corp|eled (e.g.
Prer|er lrr Pac|l|c 0uay (180 |eys), 0e vere v|||age uroar Resorl (120 |eys) ard a proposed 1Z9-|ey
role| adjacerl lo lydro Arera).
Projecls al lre ExpressWay ard 0|asgoW laroour rave oeer corp|eled lo |rprove |rlraslruclure lo ard
lror lre c|ly, as rave lrarsporl ruos ard |rlercrarges |rc|ud|rg 3lralrc|yde Parlrersr|p lor Trarsporl's
288 r||||or suoWay roderr|sal|or prograrre. Tre VZ1 rolorWay corp|el|or screre W||| p|ay a |ey ro|e
|r erao||rg eas|er access|o|||ly lor lre CorrorWea|lr 0ares |r 0|asgoW 2011. Tre corp|eled screre |s
a|ready |rprov|rg jourrey l|res ard reduc|rg lrall|c corgesl|or. Tre e|grl |||orelre roule Wr|cr cosl
approx|rale|y 92 r||||or ||r|s lre VZ1 al Carry|e W|lr lre V8 soulr Wesl ol lre K|rgslor 8r|dge |r
cerlra| 0|asgoW ard opered or 28lr Jure 2011.
0|asgoW |s a|so |rvesl|rg 812 r||||or |r lre 3oulr 0|asgoW losp|la| 3crere, ore ol lre |argesl rosp|la|
carpuses lo oe deve|oped |r lre uK lor decades.
Tre s|gr|l|carl regereral|or screres (corp|eled ard urderWay) |r advarce ol lre CorrorWea|lr 0ares
W||| oerel|l derard |eve|s al role|s We|| oeyord lre everl |lse|l. lrlraslruclure |rprovererls, reW sropp|rg
cerlres ard |e|sure space W||| add lo lre overa|| allracl|veress ol 0|asgoW as a lour|sl desl|ral|or,
slrerglrer |ls pos|l|or as a galeWay lo 3col|ard ard u|l|rale|y, ooosl occuparcy |eve|s al role|s |r lre c|ly.
0|asgoW A|rporl rard|ed Z.1 r||||or passergers |r 2013 accord|rg lo 8AA 0roup Vorlr|y Trall|c 3lal|sl|cs,
record|rg a y-o-y |rcrease ol 2.9. Tola| passergers are sl||| oer|rd 200 |eve|s Wr|cr reacred 8.8 r||||or
passergers. 0|asgoW A|rporl reporled |ls e|everlr corsecul|ve rorlr ol groWlr lor 0eceroer |r 2013, W|lr
155,38Z passergers, represerl|rg ar |rcrease ol 3.8 corpared lo 2012. 2013 ras oeer lre a|rporl's
ous|esl surrer |r l|ve years W|lr 5.1 groWlr al 832,329 passergers lor Ju|y corpared lo lre sare
per|od |r 2012.
Tre secord prase ol 0|asgoW A|rporl's 1Z r||||or redeve|oprerl |s roW urderWay. Tr|s W||| see lre
lrarslorral|or ol |arge areas ol lre lerr|ra| oelore lre 2011 CorrorWea|lr 0ares. 0|asgoW A|rporl
expecls a|r||res lo |rcrease lre|r l||grl relWor|s ard lrequercy. For |rslarce, lce|arda|r |s |rlroduc|rg ar
add|l|ora| Wee||y serv|ce |r 2011 lral W||| |rcrease |ls seal capac|ly oy 25. Jel2 arrourced lre add|l|or
ol a l|llr ded|caled a|rcrall oy surrer 2011 Wr|cr W||| prov|de ar add|l|ora| 30,000 seals ard easyJel
arrourced lWo reW desl|ral|ors lror 0|asgoW A|rporl lor 2011. Tre |asl 12 rorlrs ras seer w|zz A|r
eslao||sr|rg a Po||sr serv|ce ard Lullrarsa's correcl|or lo 0usse|dorl.
E-94
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 91
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
8.3 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Tre rajor|ly ol 0|asgoW's lu||-serv|ce role|s are corcerlraled |r lre C|ly Cerlre, Wrere rary ol 0|asgoW's
larous lour|sl allracl|ors are |ocaled. Tre lo||oW|rg descr|oes lre craracler|sl|cs ol lre c|ly's l|ve rajor
role| d|slr|cls:
6|ty 6entre - Tre c|ly cerlre |s oourded oy lre l|gr 3lreel lo lre easl, R|ver C|yde lo lre soulr ard
lre V8 rolorWay lo lre Wesl ard rorlr. Tre c|ly cerlre |s oased or a gr|d sysler ol slreels or lre
rorlr oar| ol lre R|ver C|yde. Tre rearl ol lre c|ly |s 0eorge 3quare Wr|cr lre 0|asgoW C|ly
Craroers, leadquarlers ol 0|asgoW C|ly Courc||. Tre c|ly cerlre car oe lurlrer suo-d|v|ded |rlo lre
rela|| ard lrealre d|slr|cls. To lre Wesl |s lre ra|r sropp|rg prec|rcl, 8ucrarar 3lreel, r|va||ed or|y oy
Lordor |r lerrs ol uK rela||. Tre ra|r sropp|rg cerlres are 8ucrarar 0a||er|es ard 3l Erocr
Cerlre, lre uprar|el Pr|rces 3quare ard lla||ar Cerlre spec|a||s|rg |r des|grer |aoe|s. Tre c|ly cerlre
|s a|so rore lo lre Trealre Roya|, perlorr|rg rore ol 3coll|sr 0pera ard 3coll|sr 8a||el, lre Pav|||or
Trealre, lre K|rgs Trealre, 0|asgoW Roya| Corcerl ra|| ard rary olrers. Tre Wor|d's la||esl c|rera,
lre 18 screer C|reWor|d |s s|lualed or RerlreW 3lreel. Tre c|ly cerlre |s a|so rore lo 0|asgoW's
r|grer educal|or |rsl|lul|ors, lre ur|vers|ly ol 3lralrc|yde, 0|asgoW 3croo| ol Arl ard 0|asgoW
Ca|edor|ar ur|vers|ly. Ex|sl|rg role|s |r lre c|ly cerlre |rc|ude lre Tr|sl|e 0|asgoW, 0rard Cerlra|
3lal|or ard Rad|ssor 8|u role|s.
F|nanc|a| 0|str|ct - To lre Weslerr edge ol lre c|ly cerlre, occupy|rg areas ol 8|ylrsWood ard
Arderslor |s 0|asgoW's l|rarc|a| d|slr|cl oll|c|a||y |roWr as lre lrlerral|ora| F|rarc|a| 3erv|ces 0|slr|cl
(lF30). Tre corslrucl|or ol rary roderr oll|ce o|oc|s ard r|gr r|se deve|oprerls ras paved lre Way
lor lre lF30 lo oecore ore ol lre uKs |argesl l|rarc|a| quarlers. Tre ler |argesl gerera| |rsurarce
corpar|es |r lre uK rave a oase or read oll|ce |r 0|asgoW |rc|ud|rg: 0|recl L|re, Esure, AXA ard
NorW|cr ur|or. lole|s |r lre lF30 |rc|ude lre Varr|oll, l||lor C|ly Cerlre ard lole| lrd|go.
Herchant 6|ty - Tre Vercrarl C|ly Was lorrer|y lre res|derl|a| d|slr|cl ol lre Wea|lry c|ly rercrarls |r
lre 18
lr
ard ear|y 19
lr
cerlur|es. As lre |rduslr|a| revo|ul|or orougrl lre c|ly Wea|lr resu|l|rg |r
expars|or ol 0|asgoW cerlra| area WeslWard, lre or|g|ra| cerlre (0|asgoW Cross - al lre jurcl|or ol
l|gr 3lreel, Trorgale, 0a||oWgale ard 3a|lrar|el) Was re|ocaled. Tre Vercrarl C|ly ras oeer
rejuveraled W|lr |uxury c|ly cerlre aparlrerls, Wr|cr ras supporled ar |rcreas|rg ruroer ol cales ard
reslaurarls. Tre area a|so corla|rs a ruroer ol lrealres ard corcerl verues |rc|ud|rg lre Tror
Trealre, lre 0|d Fru|lrar|el, lre Trades la||, Vercrarl 3quare ard C|ly la||s. lole|s |r lre area
|rc|ude lre Vercure 0|asgoW C|ly Cerlre, Prer|er lrr 0eorge 3quare, 3p|res 3erv|ced 3u|les ard
lo||day lrr Express R|vers|de.
west End - 0|asgoW's wesl Erd |s a oorer|ar d|slr|cl ol cales, lea roors, oars, ooul|ques, uprar|el
role|s ard reslaurarls. Ke|v|rgrove Arl 0a||ery ard Vuseur |s 0|asgoW's prer|er ruseur ard arl
ga||ery, rous|rg ore ol Europe's oesl c|v|c arl co||ecl|ors. 0lrer allracl|ors |rc|ude lre ur|vers|ly ol
0|asgoW, 0|asgoW 8olar|c 0arders ard lre 3coll|sr Exr|o|l|or ard Corlererce Cerlre. Tre wesl
Erd |s |arge|y a res|derl|a| area. Tre wesl Erd |s rore lo lre l||lor wesl Erd, 0|asgoW Pord lole|
ard lole| du v|re al 0re 0evorsr|re.
8E66 - Tre 3ECC |s 3col|ard's |argesl exr|o|l|or cerlre, |ocaled or lre rorlr oar| ol lre R|ver C|yde,
adjacerl lo lre CroWre P|aza, l||lor 0arder lrr ard Carpar||e. Tre 3ECC occup|es 1 acres ol |ard
Wr|cr |rc|udes surlace car par||rg space ard rosls rurerous rus|c corcerls, exr|o|l|ors ard
E-95
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 95
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
proless|ora| corlererces. Tre 3ECC a|so ras |ls oWr ra||Way slal|or, Exr|o|l|or Cerlre, or 0|asgoW's
suouroar ra||Way relWor|.
Ex|sr|ng lore| $upp|,
Tre 0|asgoW role| rar|el currerl|y corpr|ses 83 graded role|s W|lr approx|rale|y Z,312 graded role|
roors. lole| supp|y |s corcerlraled |r lre r|d-rar|el segrerl (2Z ol lola| supp|y), W|lr lre oudgel ard
lour-slar segrerls represerl|rg a lurlrer 19 ard 21 ol supp|y respecl|ve|y. Trere are or|y lWo l|ve slar
role|s preserl |r lre c|ly.
Aller slrorg groWlr |r role| supp|y |r 200Z, deve|oprerl acl|v|ly s|oWed rolao|y dur|rg lre ecoror|c
doWrlurr |r 2008. Tre rosl rolao|e role| oper|rgs rave oeer lre 100-roor 8|ylrsWood 3quare lole|,
Wr|cr Was corverled lror lre lorrer Roya| 3coll|sr Auloroo||e C|uo oy lre ToWrrouse Corpary, lre 95-
roor lrd|go lole| |r waler|oo 3lreel (Apr|| 2011), 181-roor 0rard Cerlra| lole| (3epleroer 2010), 198-
roor C|l|zer V (Augusl 2010), 203-roor Prer|er lrr (0clooer 2012), 91 8edroor Par| lrr oy lre Rez|dor
0roup (Apr|| 2013) ard lre reoper|rg ol lre 125-roor easylole| (Feo 2011). we role lral lre l||lor
0arder lrr (lorrer|y lre V|rl lole|), ras urdergore a 1 r||||or reluro|srrerl as parl ol lre reorard|rg
process.
lr 2011, lre |alesl oper|rg |s lre 180-roor Prer|er lrr, Pac|l|c 0uay |r Vay 2011.
8us|ress Prer|ses Reroval|or A||oWarce (8PRA) oac|ed role|s sucr as lre lole| lrd|go, Prer|er lrr,
easylole|, Par| lrr ard Trave|odge 0ueer 3lreel rave a lola| ol 81 reW role| roors. ll rera|rs lo oe
seer Wrelrer lre rar|el car susla|r lre |eve|s ol supp|y, as lrese role|s ray rave oeer deve|oped due lo
lax orea|s ralrer lrar as a resporse pure|y lo rar|el cord|l|ors.
Furure lore| $upp|,
lole| deve|oprerl |r 0|asgoW corl|rues lo allracl reW orards |rlo lre rar|el. 8rards are |eer lo erler
lre rar|el as parl ol |rcreas|rg lre|r preserce |r lre uK as 0|asgoW |s cors|dered a |ey galeWay c|ly /
rar|el lo erler oy rary operalors. we urderslard lre 3Z1-|ey Vole| 0re 0|asgoW Cerlra| 3lal|or |s lo
proceed, W|lr corp|el|or largeled lor 2015. Vole| 0re 0|asgoW W||| oecore lre |argesl role| |r 3col|ard
oy roor courl. larplor oy l||lor, lyall ard 0ouo|eTree oy l||lor are sore ol lre orards lral are acl|ve|y
see||rg lo erler lre rar|el. lrlerCorl|rerla| lole|s 0roup ras |rlroduced lre lrd|go orard lo 0|asgoW ard
We expecl lre CroWre P|aza lo rece|ve reluro|srrerl as parl ol lre reorard|rg exerc|se.
A ruroer ol role| proposa|s, roWever, rave recerl|y rece|ved p|arr|rg corserl or are lre suojecl ol
currerl app||cal|ors. Arorg lre rosl |rr|rerl |s a 1Z1-|ey Trave|odge or 0ueer 3lreel (Jure 2011) ard
lre lo||day lrr 0|asgoW 0reer (2011). Tre add|l|or ol arolrer 22 roors (Trave|odge ard lre recerl
Par| lrr oper|rg) v|a lre 8PRA screre W||| resu|l |r a 3.5 |rcrease |r supp|y. lr lre c|ly cerlre, lre
|rveslrerl p|pe||re corl|rues lo or|rg lorWard proposa|s lor reW role|s ard lre expars|or ard
|rprovererl ol ex|sl|rg role|s, Wr|cr |rc|ude a 10-roor Z lole| or Norlr Freder|c| 3lreel ard ar 88-oed
larplor oy l||lor (due Ju|y 2011).
0l lre 19 role|s |r lre 0|asgoW p|pe||re, 39 are or ro|d ard 1Z are specu|al|ve / urcorl|rred
accord|rg lo AV:PV.
E-96
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 9
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Varker w|oe lore| Trao|ng Perlormance
0|asgoW ras r|slor|ca||y ra|rla|red a rea|lry occuparcy, W|lr lre rar|elW|de occuparcy record|rg |eve|s
|r lre r|d-Z0s rarge lo||oW|rg a |oW ol Z1.3 |r 2005. Tre l|uclual|ors |r 0|asgoW's A0R corre|ale W|lr
lre add|l|or ol reW supp|y. 0ur|rg lre course ol 200Z, 190-|eys Were added (3 |rcrease |r supp|y) Wr|cr
resu|led |r a 2.9 y-o-y dec||re |r RevPAR |r 2008. Tr|s Was lurlrer derorslraled oy lre add|l|or ol lre
198-|ey C|l|zerV |r 2010, Wr|cr reduced overa|| rar|el A0R ard corsequerl|y resu|led |r a 1.0
decrease |r y|e|d as corpared lo lre prev|ous year.
lr 2012, 0|asgoW occuparcy |eve|s are rarg|ra||y up or 2011, |rcreas|rg lror Z1. |r 2011 lo Z5.Z |r
2012. A0R ras seer a dec||re ol 1.3 y-o-y due lo lre |rcrease |r supp|y ard lre 0|yrp|cs rol rav|rg
lre arl|c|paled ellecl |r reg|ora| uK. Trerelore, RevPAR exper|erced rarg|ra| groWlr ol 0.2, lror
11.9Z lo 15.01.
0esp|le corl|rued groWlr |r role| supp|y, role||ers |r 0|asgoW reporled exce||erl perlorrarce |r 2013.
RevPAR |rcreased oy a rolao|e .Z y-o-y, dr|ver oy a 3. |rcrease |r occuparcy ard 3.0 r|se |r A0R.
As al YT0 Apr|| 2011, 0|asgoW |s oulperlorr|rg reg|ora| uK, acr|ev|rg ar occuparcy ol Z5.9 (9.3 y-
o-y), as corpared lo reg|ora| uK's 8.. w|lr s|r||ar A0R l|gures posled, 0|asgoW's RevPAR |s a|so
oulpac|rg reg|ora| uK al 1Z.02 corpared lo 10.85 lor lre Reg|ora| uK rar|el. loWever, Wrer
corpared W|lr average roor rales ol Aoerdeer ard Ed|rourgr, 0|asgoW's lu||-serv|ce role|s are oll lre
pace oy approx|rale|y 20, desp|le a s|r||ar occuparcy rale, |||uslral|rg lre pr|ce sers|l|v|ly ol lre rar|el
lo||oW|rg s|gr|l|carl |rcreases |r roor supp|y.
,2Z1
,11 ,180 ,588
,Z8 ,910
Z,291
Z,813
8,30Z 8,30Z
190
19 108
198 121
381
91
58Z
191
0
0
1,000
2,000
3,000
1,000
5,000
,000
Z,000
8,000
9,000
10,000
200Z 2008 2009 2010 2011 2012 2013 YT0
2011
2015F 201F
N
u
r
o
e
r
o
l
R
o
o
r
s
Add|t|ons to hote| 8upp|y |n C|asgow (200- 201}
Ex|sl|rg 3upp|y Fulure Roors 3upp|y
3ource: AV:PV lole|s
E-97
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 9Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$erv|ceo /parrmenr Varker Dverv|eu
As al Vay 2011, lrere are 10 ex|sl|rg serv|ced aparlrerl properl|es |ocaled |r 0|asgoW, represerl|rg a
supp|y ol 30Z ur|ls. Tre vasl rajor|ly ol lrese are oWrer-operaled, corpr|s|rg over 80 rar|el srare.
ur|||e role|s, serv|ced aparlrerl properl|es are pr|rar||y |ocaled |r per|prera| |ocal|ors. 3|r||ar lo
Ed|rourgr, role|s rave lerded lo occupy |arger properl|es g|ver lral lrey are rore eslao||sred. w|lr
serv|ced aparlrerls oe|rg re|al|ve|y |rralure |r lre corlexl ol lre |odg|rg |rduslry, serv|ced aparlrerls
lerd lo occupy areas ard ou||d|rgs rore corrersurale W|lr lre|r sly|e or operal|or as a resu|l ol
corpel|rg W|lr pr|re |rveslrerl / occup|ers.
Ex|sr|ng $erv|ceo /parrmenr $upp|,
8erv|ced Apartments 0wner Un|ts
0rearrouse Lyredocr 0rearrouse 21
0rearrouse Vercrarl C|ly 0rearrouse 15
Eroassy Aparlrerls Vc0uade 0roup
Fraser 3u|les Cerlrepo|rl Properl|es Lld 99
0|asgoW Cerlra| Aparlrerls lol-e| Aparlrerls 15
0|asgoW Lolls lrdeperderl 20
VAX al 0|asgoW 8alr 3lreel lrper|a| Properly Corpary (0av|d 0|over) 20
VAX al 0|yrp|c louse lrper|a| Properly Corpary (0av|d 0|over) 15
3aco 0|asgoW lrdeperderl 12
3p|res 8urrraver Properl|es 21
Tota| 307
0lrer orards ard |rdeperderl|y oWred aparlrerls
3ource: AV: PV
0
10
20
30
10
50
0
Z0
80
90
100
0
20
10
0
80
2005 200 200Z 2008 2009 2010 2011 2012 2013 YT0
Apr
2013
YT0
Apr
2011
0
c
c
u
p
a
r
c
y
(
)
A
0
R
/
R
e
v
P
A
R
(
)
C|asgow hote| Harket - Harket w|de Performance
A0R () RevPAR () 0ccuparcy ()
3ource: 3TR 0|ooa|
E-98
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 98
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Furure $erv|ceo /parrmenr $upp|,
Tota| 8erv|ced Apartment Rooms Proposed| Under 6onstruct|on
8erv|ced Apartments 0wner Un|ts
0a|e louse Adr|r|slralor 121
weslergale Craroers C0l3 (weslergale) 8
3ource: AV:PV
Al preserl lrere are lWo proposed serv|ced aparlrerl deve|oprerls |r 0|asgoW oul We urderslard lral or
ore ol lrese, a p|arr|rg app||cal|or ray oe suor|lled lo arerd lre corserl lo oll|ce use, Wr|cr
derorslrales lre |rralure rar|el lor ded|caled serv|ced aparlrerls. lrlerCorl|rerla| lole|s 0roup Were
acl|ve|y see||rg a s|le su|lao|e lor lre|r 3lay8r|dge 3u|les orard |r 0|asgoW ard acr|eved p|arr|rg corserl
or a s|le pre-recess|or. loWever, lre deve|oper Werl |rlo adr|r|slral|or ard lre screre d|d rol proceed.
lr 0|asgoW, add|l|ors lo role| supp|y are |rcreas|rg|y |r lre oudgel / ||r|led serv|ce seclors. Tr|s |rc|udes
C|l|zerV, Prer|er lrr ard Trave|odge add|rg lo lre|r ex|sl|rg supp|y.
Tre 8us|ress Prer|ses Reroval|or A||oWarce (8PRA) screre, ar |rcerl|ve lo or|rg dere||cl or urused
ous|ress properl|es oac| |rlo use, |s prov|d|rg ar add|l|ora| Z90 roors (10 |rcrease or ex|sl|rg supp|y)
ard |l rera|rs lo oe seer Wrelrer lre rar|el |s res|||erl erougr lo susla|r lre supp|y. we a|so urderslard
lre 3Z1-roor Vole| 0re 0|asgoW Cerlra| 3lal|or |s lo proceed, W|lr corp|el|or largeled lor 2015.
8.4 |nvestment Harket
Tre uK reg|ors, rave sullered urder Wea| ecoror|c groWlr, r|s|rg cosls ard lrag||e corporale derard.
Rece|versr|p sa|es rave |rcreased across lre courlry ard a ruroer ol role|s lral rave oeer la|er |rlo
adr|r|slral|or are currerl|y oe|rg ollered lor sa|e. ll |s very |||e|y lral sore ol lrese properl|es W||| se|| al
d|scourls lo lre or|g|ra| |rveslrerl |eve|s.
Vov|rg lorWard, We expecl 0|asgoW ard lre W|der uK reg|ora| rar|el lo oller poss|o|||l|es espec|a||y lor
rore opporlur|sl|c |rveslors lral are W||||rg lo accepl a r|grer r|s|. Trere |s a|so a sourd |rleresl |r role|
assels |r corparal|ve|y slao|e |ocal|ors W|lr year-rourd |e|sure derard, a rea|lry correrc|a| oase ard
r|gr oarr|ers lo erlry, sucr as 0xlord, Caror|dge, 8alr ard Ed|rourgr. lr lral corlexl, 0|asgoW rera|rs a
s||grl|y rore cra||erg|rg propos|l|or a|lrougr lre c|ly does allracl slrorg |rveslor |rleresl lor correcl|y
pr|ced assels. Tre lo||oW|rg prov|des a ||sl ol recerl lrarsacl|ors:
8.5 Harket 0ut|ook
Accord|rg lo lre |alesl |rlerral|ora| lour|sl arr|va|s slal|sl|cs lror v|s|l 3col|ard, lre lola| ruroer ol arr|va|s
lo lre c|ly ol 0|asgoW reacred 515,000 |r 2013, approx|rale|y 1.2 oe|oW lre prev|ous year. 0esp|le lr|s,
lre upcor|rg 2011 CorrorWea|lr 0ares, Ryder Cup ard lorecor|rg year are |||e|y lo dr|ve add|l|ora|
arr|va|s lo lre c|ly.
Reported
Pr|ce
(CP
6urrency}
l||lor 0|asgoW 0rosveror 3ep-11 9 9.15 r||||or 98,138 Vaslcrall L|r|led Roya| 8ar| ol 3col|ard
l||lor C|ly 0|asgoW 3ep-11 319 35.Z r||||or 111,912 Top|ard 0roup ol Corpar|es Roya| 8ar| ol 3col|ard
wesl 0eorge 3lreel lole| 0|asgoW 2012 Apr-12 8 Corl|derl|a| Corl|derl|a| lole| Lard ard 0eve|oprerl L|r|led 0urlerr||re 8u||d|rg 3oc|ely
Rad|ssor 8|u 0|asgoW Nov-12 21Z 21.5 r||||or 99,190 Azure lole|s Nalwesl 3col|ard (Adr|r: R3V Teror)
Vendor
3ource: JLL
Property
Transact|on
0ate
Rooms
Pr|ce per
room
Purchaser
E-99
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 99
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
0|asgoW ras r|slor|ca||y ra|rla|red a rea|lry occuparcy, W|lr lre gerera| rar|el acr|ev|rg occuparcy
|eve|s |r lre r|d-Z0 calegory lo||oW|rg a |oW ol Z1.3 |r 2005. Tre l|uclual|ors |r 0|asgoW's A0R
corre|ale W|lr lre add|l|or ol reW supp|y. 0ur|rg lre course ol 200Z, 190-|eys Were added (3 |rcrease |r
supp|y) Wr|cr resu|led |r a 2.9 y-o-y dec||re |r RevPAR |r 2008.
As al YT0 Apr|| 2011, 0|asgoW |s oulperlorr|rg Reg|ora| uK Wr|cr acr|eved occuparcy ol 8.
(|rcreas|rg oy 1.Z y-o-y) as corpared lo 0|asgoW's Z5.9. w|lr s|r||ar A0R l|gures posled, lre
0|asgoW RevPAR |s oulpac|rg Reg|ora| uK oy 1Z.02 lo 10.85 respecl|ve|y. loWever, Wrer corpared
W|lr average roor rales ol Aoerdeer ard Ed|rourgr, 0|asgoW lu||-serv|ce role|s are oll lre pace oy
approx|rale|y 20, desp|le a s|r||ar occuparcy rale, |||uslral|rg lre pr|ce-sers|l|v|ly ol lre rar|el lo||oW|rg
s|gr|l|carl |rcreases |r roor supp|y.
Tre |ey lour|sr source rar|els lor 0|asgoW |r 2011 |rc|uded 0errary, lre u3A, Carada, Frarce ard
3pa|r - ra||rg up 50 ol a|| arr|va|s lo lre c|ly. 0errary |s lre lop source rar|el lo 0|asgoW, W|lr a 15
rar|el srare, |rcreas|rg oy 1.0 percerlage po|rls lror lre pr|or year. Tre u3A lo||oWed c|ose|y oer|rd al
11 al a s|r||ar rale ol |rcrease. lo||day v|s|lors accourl lor lre |argesl proporl|or ol v|s|lors lo 0|asgoW,
W|lr approx|rale|y 5Z ol a|| v|s|lors lrave|||rg lo lre c|ly lor |e|sure purposes. v|s|l|rg Fr|erds ard
Re|al|ves (vFR) accourled lor a lurlrer 22 ol lola| v|s|lors, lo||oWed oy ous|ress (1Z) ard olrer (1).
0|asgoW |s rosl|rg lre CorrorWea|lr 0ares |r 2011, Wr|cr ras gereraled s|gr|l|carl |rlraslruclure
deve|oprerl. Ar or-go|rg regereral|or prograrre |s corl|ru|rg a|org lre C|yde walerlrorl W|lr a
r|xlure ol res|derl|a|, role|, oll|ce ard lour|sl allracl|ors are e|lrer |r lre p|arr|rg slage or a|ready
corp|eled projecls al lre ExpressWay ard 0|asgoW laroour rave oeer corp|eled lo |rprove
|rlraslruclure lo ard lror lre c|ly, as rave lrarsporl ruos ard |rlercrarges |rc|ud|rg 3lralrc|yde
Parlrersr|p lor Trarsporl's 288 r||||or suoWay roderr|sal|or prograrre. Tre VZ1 rolorWay corp|el|or
screre W||| p|ay a |ey ro|e |r erao||rg eas|er access|o|||ly dur|rg lre CorrorWea|lr 0ares |r 0|asgoW
2011.
Tre s|gr|l|carl regereral|or screres (corp|eled ard urderWay) |r advarce ol lre CorrorWea|lr 0ares
W||| oerel|l derard |eve|s al role|s We|| oeyord lre everl |lse|l. lrlraslruclure |rprovererls, reW sropp|rg
ard |e|sure space W||| add lo lre overa|| allracl|veress ol 0|asgoW as a lour|sl desl|ral|or, slrerglrer |ls
pos|l|or as a galeWay lo 3col|ard ard u|l|rale|y, ooosl occuparcy |eve|s al role|s |r lre c|ly.
0esp|le a |arge role| p|pe||re (re|al|ve lo ex|sl|rg supp|y), occuparcy groWlr |s |||e|y lo rera|r sleady |r
lre red|ur lo |org lerr due lo |rcreased lour|sr derard gereraled dur|rg ard aller lre 2011
CorrorWea|lr 0ares.
8. Fraser 8u|tes C|asgow
Tre Fraser 3u|les 0|asgoW |s s|lualed |r lre Vercrarl C|ly, a cu|lura| area rared aller lre looacco
|eaders ol lre 1Zlr cerlury. Tre area |rc|udes orrale oar|s, c|v|c ou||d|rgs, loWrrouses ard rerovaled
Warerouses. Vary ol lrese ou||d|rgs roW |rc|ude reslaurarls, lrealres, cales ard des|grer
ooul|ques. Nearoy allracl|ors |rc|ude lre Peop|es Pa|ace Vuseur, 0|asgoW 0reer, 0|asgoW Calredra|,
ard 8ucrarar 3lreel. Furlrer al|e|d |s lre 3ECC. Tre aparlrerls are a|so We|| p|aced lor lre 33E lydro,
Ce|l|c Par| ard larpder Par|.
E-100
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 100
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Fraser 8u|tes C|asgow
Address: 1-19 A|o|or 3lreel,
0|asgoW 01 1Ll
No. ur|ls: 98 ur|ls
Veel|rg 3pace: 1 Veel|rg roor
Food & 8everage: 8rea|lasl roor
0lrer Fac|||l|es: 0yrras|ur
3ource: lole| Varagererl
$erv|ceo /parrmenr Dperaror lnlormar|on
Tre Fraser 3u|les 0|asgoW |s operaled oy Frasers losp|la||ly. P|ease reler lo 3ecl|or 3.8 Fraser 3u|les
3|rgapore - 3erv|ced Aparlrerl 0peralor lrlorral|or lor rore |rlorral|or.
Ex|sr|ng 0omper|r|ve lore|s - Fraser $u|res S|asgou
Tre suojecl properly's corpel|l|ve sel ol role|s are |derl|l|ed as lo||oWs:
Property Rooms 0perator
Fraser 8u|tes C|asgow 98 Frasers hosp|ta||ty
Varr|oll 0|asgoW 298 Varr|oll lrlerral|ora|
V|||err|ur 0|asgoW 11 V|||err|ur & Coplrorre
Rad|ssor 8|u lole| 21Z Car|sor Rez|dor lole| 0roup
Verz|es lole| 111 Verz|es lole|s
Tota| Number of Rooms 900
3ource: lole| Varagererl
Tre suojecl properly ras recerl|y urdergore ar exlers|ve 1.1 r||||or reroval|or Wr|cr Was corp|eled |r
Varcr 2013. lr add|l|or lo lre aoove corpel|lors, lre l||lor 0|asgoW lole| a|so corpeles W|lr lre suojecl
properly. 0uesl derard |s ra|r|y lror lre uK (55), Wr||e olrer s|gr|l|carl source rar|els |rc|ude lrd|a
(12) ard 3pa|r (10). Tre corpel|l|ve sel corpr|ses orarded role|s as olrer serv|ced aparlrerls |r
0|asgoW oller rucr sra||er roor |rverlor|es - gerera||y oe|oW 50 roors. Trese role|s a|so rave lre
ao|||ly lo dr|ve add|l|ora| reverues; lror corlererce ard oarquel|rg, lood ard oeverage oller|rgs ard
|arger gyrras|urs W|lr exlerra| reroersr|p.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel, Wr|cr |rc|udes lre Varr|oll 0|asgoW lole|; V|||err|ur 0|asgoW; Rad|ssor 8|u lole|
0|asgoW; Verz|es 0|asgoW ard exc|udes lre suojecl properly acr|eved a RevPAR ol 5.9Z |r 2013. Tr|s
corpares lo 13. acr|eved oy lre W|der reg|ora| uK rar|el. As al 0eceroer 2013 YT0, RevPAR ol lre
corpel|l|ve sel ras |rcreased 3.3 corpared lo |asl year. Tr|s |s 2.2 oe|oW lre groWlr ol lre W|der
reg|ora| uK rar|el.
Tre Fraser 3u|les 0|asgoW properly lra||s oer|rd lre corpel|lor sel |r lerrs ol RevPAR, a|oe|l rarg|ra||y,
ard Was sore 0.9 |oWer al lre erd ol 2013. Tre properly ras slrugg|ed lo corpele |r A0R lerrs due lo
lre |rcreas|rg|y daled slardard ol roors. Properly perlorrarce Was, roWever, up 1Z.1 al YT0
0eceroer 2013 as corpared lo lre sare per|od |r 2012. Tr|s derorslrales a rore pos|l|ve oul|oo|
lo||oW|rg lre reluro|srrerl ol lre properly. lr add|l|or lo lre reW|y rerovaled producl, lre regereral|or ol
lre Vercrarl C|ly, c|ear-up ol lre re|groour|rg 3e|lr|dges s|le ard gerera| |rlraslruclure deve|oprerls |r
0|asgoW aread ol lre CorrorWea|lr 0ares rave a|| corlr|ouled lo lre pos|l|ve resu|ls.
E-101
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 101
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser $u|res S|asgou
8trengths weaknesses
3uojecl properly ras oeer recerl|y rerovaled
W|lr approx|rale|y 1.1 r||||or sperl or lre
projecl across lre roors ard puo||c areas
CorrorWea|lr 0ares oll|ce |ocaled across
lre road ard oerel|ls lror v|s|l|rg slall ard
lu||y ooo|ed lor pre ard posl 0ares
Reluro|srrerl ras |ed lo ar |rcrease |r
occuparcy ard A0R
21-rour recepl|or
Ava||ao|||ly ol reel|rg roor ard gyrras|ur
No oar / F&8 lo upse|| or d|llererl|ale oller|rg
Lac| ol corlererce space |r corpar|sor lo
lre corpel|lor role|s
0pportun|t|es Threats
Prorole lre reel|rg ard orea|lasl roors lo
agerls, c||erls ard regu|ar c||erle|e
3uojecl properly W||| soor oe ||cersed
a||oW|rg a|coro| or lre prer|ses
Polerl|a| lo groW oolr A0R ard occuparcy
Reluro|srrerl ol lre V|||err|ur lole| as parl
ol lre 300 r||||or 8ucrarar 0uarler
redeve|oprerl
0|ooa| ellecls ol lre ecoror|c doWrlurr
corl|rue |r lre srorl lerr
Polerl|a| reW role| sloc| |r lre area,
|rc|ud|rg a 250-roor 1-slar role| al
Co||ege|ards
0
20
10
0
80
J
a
r
-
1
3
F
e
o
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1
3
V
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-
1
3
A
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-
1
3
V
a
y
-
1
3
J
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-
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3
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A
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3
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1
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N
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1
3
0
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1
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(
)
Fraser 8u|tes C|asgow RevPAR 2013
Fraser 3u|les 0|asgoW RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-102
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 102
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
9 Edinburgh Market Overview
9.1 Execut|ve 8ummary
Ed|rourgr ras a popu|al|or ol approx|rale|y 150,000 ard, as sucr, |s lre secord |argesl c|ly |r 3col|ard
aller 0|asgoW ard lre severlr |argesl |r uK. Ed|rourgr |s ore ol lre uK's ra|r lour|sl desl|ral|ors,
oller|rg a vasl ruroer ol cu|lura| s|les, surrer lesl|va|s ard go|l lac|||l|es. Furlrerrore, lre c|ly ras
slarled lo deve|op |lse|l as a popu|ar ous|ress ard everl desl|ral|or, Wr||sl lour|sr |s a|so ar |rporlarl
ecoror|c lourdal|or ol lre c|ly. As Ed|rourgr |s a wor|d ler|lage 3|le, lour|sls core lo v|s|l r|slor|c s|les
sucr as Ed|rourgr Casl|e, lre Pa|ace ol lo|yrood louse ard lre 0eorg|ar NeW ToWr. Vajor |rlerral|ora|
everls |r lre c|ly |rc|ude:
Ed|rourgr Fr|rge Fesl|va|
Tre Nal|ors Rugoy Tourrarerl
Tre Roya| l|gr|ard 3roW
3l. ArdreW's 0ay
Tre Ed|rourgr V|||lary Talloo
Ed|rourgr ard lre Wro|e surrourd|rg reg|or |s a go|lers' parad|se, ard rary ol lre pr|vale c|uos We|core
v|s|lors. Tre C|ly ol Ed|rourgr |lse|l ras s|x go|l courses, ard lrere are 28 courses W|lr|r lre c|ly
oourdar|es. Al l|||erd, or lre soulrerr edge ol Ed|rourgr, lre |argesl arl|l|c|a| s|| s|ope |r lre uK ollers
s|||rg a|| year rourd.
Accord|rg lo AV:PV lole|s, Ed|rourgr corpr|sed 1Z0 graded role|s ard serv|ced aparlrerls W|lr a lola|
ol rore lrar 11,811 roors as al YT0 Vay 2011. Tre accorrodal|or rar|el |s We||-oa|arced across a||
qua||ly |eve|s, a|lrougr lre 3- ard 1-slar segrerls accourl lor a s||grl|y |arger srare. 5-slar role|s ra|e
up arourd 8 ol lola| |eys ard serv|ced aparlrerls W|lr lre |easl al Z ol lola| |eys. 3|rce 2000, supp|y
|r Ed|rourgr ras |rcreased oy ar average ol 3 per arrur.
3|rce 2002 occuparcy |eve|s rave rera|red sleady, rare|y dropp|rg oe|oW Z5.0 W|lr lre excepl|or ol
2008, 2010 ard 2012 - Wrere role|s |r lre W|der Ed|rourgr rar|el sullered lror Wea|er derard dur|rg
lre Lordor 0|yrp|cs resu|l|rg |r a 1 dec||re |r RevPAR corpared lo 2011.
E-103
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 103
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
9.2 Tour|sm 0verv|ew
lnrernar|ona| v|s|ror /rr|va|s
lr 2013, overa|| v|s|lor arr|va|s lo Ed|rourgr reacred 1.3 r||||or, record|rg a 1.1 dec||re over lre pr|or
year. Tre c|ly ras recorded a CA0R ol 1.8 over lre |asl l|ve years.
0omesr|c v|s|ror /rr|va|s
Ed|rourgr's lour|sr |s |arge|y deperderl or doresl|c arr|va|s Wr|cr |r 2012 represerled 1.5 ol lola|
arr|va|s. Al 2.5 r||||or ard r|s|rg 5.3 or lre pr|or year, lr|s Was lre r|gresl ruroer ol doresl|c arr|va|s
v|s|l|rg lre c|ly |r lre |asl sever years.
1.31
1.31
1.19
1.32
1.31
1.31
1.3
1.30
-30
-20
-10
0
10
20
30
10
0.0
0.2
0.1
0.
0.8
1.0
1.2
1.1
1.
200 200Z 2008 2009 2010 2011 2012 2013
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|nternat|ona| V|s|tor Arr|va|s to Ed|nburgh
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: v|s|l 3col|ard
2.03 2.01 2.05
2.0Z
1.8Z
2.35
2.1Z
-10
-30
-20
-10
0
10
20
30
10
0.0
0.5
1.0
1.5
2.0
2.5
3.0
200 200Z 2008 2009 2010 2011 2012
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0omest|c V|s|tor Arr|va|s to Ed|nburgh
v|s|lor Arr|va|s (r||||ors) Arrua| 0roWlr () 3ource: v|s|l 3col|ard
E-104
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 101
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
/verage lengrn ol $ra,
Tre average |erglr ol slay |r Ed|rourgr |s lWo r|grls lor uK v|s|lors ard lour r|grls lor |rlerral|ora| v|s|lors.
Seograpn|c Dr|g|n
Tre u3A rera|rs Ed|rourgr's |argesl s|rg|e |rlerral|ora| source rar|el lor v|s|lors al 1 |r 2011 (|alesl
dala ava||ao|e), accourl|rg lor approx|rale|y 50 groWlr over lre pr|or year. 0errary lo||oWs c|ose|y
oer|rd, ard W|lr 1Z1,000 v|s|lors, secures a 13 srare. lla|y ard Frarce reporled lre grealesl dec||re |r
v|s|lor arr|va|s, la|||rg oy rore lrar 30 eacr. Frarce reporled a 3Z,000 dec||re |r v|s|lors, Wr||e lla|y saW
a 25,000 drop oll.
Purpose ol v|s|r
0
50
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250
300
350
100
150
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Top 8ource Harkets to Ed|nburgh |n 2011 - y 6ountry of Res|dence
2010 2011
3ource: v|s|l 3col|ard
lo||day, 5.10
v|s|l|rg Fr|erds &
Re|al|ves, 19.Z9
8us|ress, 11
0lrer, 5
Purpose of V|s|t |n 2012
lo||day v|s|l|rg Fr|erds & Re|al|ves 8us|ress 0lrer
3ource: v|s|l 3col|ard
E-105
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 105
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
lr 2012, |e|sure lr|ps lo Ed|rourgr represerled 5 ol |rlerral|ora| arr|va|s, W|lr v|s|l|rg lr|erds ard
re|al|ves secured lre secord |argesl srare al 19.8. 11 ol |rlerral|ora| v|s|lors arr|ved |r Ed|rourgr or
ous|ress ard 5 lor olrer purposes.
re, 0emano 0r|vers
Ed|rourgr |s lre secord |argesl l|rarc|a| cerlre |r lre uK. Roya| 8ar| ol 3col|ard, L|oyds 8ar||rg 0roup,
3lardard L|le ard AE00N uK are a|| readquarlered |r lre c|ly as are Tesco 8ar| ard v|rg|r Vorey. Tre
c|ly |s rore lo rore lrar 91,000 ur|vers|ly ard co||ege sluderls, |rc|ud|rg rore lrar 15,000 |rlerral|ora|
sluderls allerd|rg lour ur|vers|l|es: lre ur|vers|ly ol Ed|rourgr, ler|ol wall ur|vers|ly, Ed|rourgr Nap|er
ur|vers|ly ard 0ueer Vargarel ur|vers|ly.
Tour|sr |s ar |rporlarl ecoror|c lourdal|or ol lre c|ly. As Ed|rourgr |s a uNE3C0 wor|d ler|lage 3|le,
lour|sls core lo v|s|l r|slor|c s|les sucr as Ed|rourgr Casl|e (rared lre lop uK ler|lage Allracl|or lor lre
lr|rd year rurr|rg |r lre 2013 8r|l|sr Trave| AWards), lre Pa|ace ol lo|yrood louse ard lre 0eorg|ar NeW
ToWr. Tr|s |rl|ux |s arp||l|ed |r Augusl ol eacr year due lo lre C|ly's lesl|va|s. 0lrer popu|ar allracl|ors
|r Ed|rourgr are lre Nal|ora| 0a||ery ol 3col|ard, lre Roya| Vuseur, lre Vuseur ol 3col|ard ard lre
Roya| 8olar|c 0arders.
Ed|rourgr ard lre Wro|e surrourd|rg reg|or |s a go|ler's parad|se, ard rary ol lre pr|vale c|uos We|core
v|s|lors. Tre c|ly ol Ed|rourgr |lse|l ras s|x go|l courses ard lrere are 28 courses W|lr|r lre c|ly oourdar|es.
Al l|||erd, or lre soulrerr edge ol Ed|rourgr, lre |argesl arl|l|c|a| s|| s|ope |r lre uK ollers s|||rg a|| year
rourd.
Ed|rourgr |s ra|r|y seer as a |e|sure desl|ral|or. loWever, lre c|ly a|so allracls a rea|lry ruroer ol
ous|ress v|s|lors every year. Tre lrlerral|ora| Corgress ard Corverl|or Assoc|al|or (lCCA) rar|ed
Ed|rourgr secord |r lre uK ard 33rd |r lre Wor|d lor lre ruroer ol |rlerral|ora| assoc|al|or reel|rgs re|d.
/ccess|o|||r, / lnlrasrrucrure 0eve|opmenrs
Ed|rourgr A|rporl rard|es or average 21,00 passergers ard 311 l||grls a day ard lrere are over 10
a|r||res operal|rg lror lre a|rporl al preserl. Tre a|rporl erp|oys 2,500 erp|oyees ard Was acqu|red |r
Vay 2012 oy 0|ooa| lrlraslruclure Parlrers (0lP) Wro a|so oWr 0alW|c| ard Lordor C|ly a|rporls.
Ed|rourgr A|rporl |s roW lre s|xlr |argesl a|rporl |r lre uK |r lerrs ol passerger ruroers. Trere are
p|ars lo exlerd lre a|rporl W|lr passerger ruroers expecled lo reacr 2 r||||or oy 2030. Ed|rourgr
A|rporl rard|ed jusl urder 9.8 r||||or passergers |r 2013.
Tre c|ly |s accessed v|a lre V90, V8 ard V9 rolorWays ard lre A1 lrur| road Wr|cr prov|de ||r|s lo lre
rera|rder ol lre 3coll|sr rolorWay relWor| ard lre soulr. Ed|rourgr A|rporl |s |ocaled 13|r lo lre Wesl
ol lre c|ly cerlre ard prov|des l||grls lo a W|de var|ely ol doresl|c ard |rlerral|ora| desl|ral|ors. Ra||
serv|ces are prov|ded oy waver|ey ard layrar|el slal|ors, oolr ol Wr|cr are or lre ra|r easl coasl ra||
relWor| as We|| as prov|d|rg |oca| correcl|ors. Tre Ed|rourgr lrar projecl |s roW l|r|sred ard oper lo
passergers. Tre rev|sed ||re roW rurs lror Yor| P|ace, c|ose lo lre 3l Jares Cerlre, lo Ed|rourgr A|rporl.
0pl|ors rera|r lor exlerd|rg lre ||re |r accordarce W|lr lre or|g|ra| p|ars lo prov|de ar Ed|rourgr relWor|
oul ro l|resca|e ras yel oeer proposed.
E-106
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 10
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
9.3 Accommodat|on Harket 0verv|ew
locar|on 3r|el
Ed|rourgr's lu||-serv|ce role|s are ever|y d|spersed lrrougroul lre c|ly. Tre Fraser 3u|les are |ocaled |r
Ed|rourgr's 0|d ToWr, Wrere rary ol Ed|rourgr's larous lour|sl allracl|ors are |ocaled - rosl rolao|y
Ed|rourgr Casl|e. Tre r|slor|c cerlre ol Ed|rourgr |s d|v|ded |r lWo oy Pr|rces 3lreel 0arders. To lre
soulr lre v|eW |s dor|raled oy Ed|rourgr Casl|e, ou||l r|gr or lre Casl|e roc| ard lre |org sWeep ol lre
0|d ToWr descerd|rg loWards lo|yrood Pa|ace. To lre rorlr ||e Pr|rces 3lreel ard lre NeW ToWr. Tre
lo||oW|rg descr|oes lre craracler|sl|cs ol lre c|ly's lrree rajor role| d|slr|cls:
The 0|d Town - Tre 0|d ard NeW ToWrs ol Ed|rourgr Were ||sled as a uNE3C0 wor|d ler|lage 3|le
|r 1995 |r recogr|l|or ol lre ur|que craracler ol lre 0|d ToWr W|lr |ls red|eva| slreel |ayoul ard lre
p|arred 0eorg|ar NeW ToWr. Trere are over 1,500 ||sled ou||d|rgs W|lr|r lre c|ly, a r|grer proporl|or
re|al|ve lo area lrar ary olrer c|ly |r lre ur|led K|rgdor. Tre 0|d ToWr ras a ruroer ol popu|ar
lour|sl s|les sucr as Ed|rourgr Casl|e, lre Roya| Ed|rourgr V|||lary Talloo slaged or lre Esp|arade
ol Ed|rourgr Casl|e, Crurcr ol 3l 0||es, lre C|ly Craroers ard lre LaW Courls. Tre 0|d ToWr |s
rore lo lole| V|ssor|, Rad|ssor 8|u as We|| as lre suojecl properly, lre Fraser 3u|les Ed|rourgr.
The New Town - Tre NeW ToWr, W|lr lre pr|rc|pa| slreel as 0eorge 3lreel rurs a|org lre ralura|
r|dge lo lre rorlr ol Wral |s |roWr as lre 0|d ToWr. To e|lrer s|de ol 0eorge 3lreel are lWo olrer
ra|r slreels, Pr|rces 3lreel ard 0ueer 3lreel. Pr|rces 3lreel ras oecore lre ra|r sropp|rg slreel
|r Ed|rourgr ard roW ras leW ol |ls or|g|ra| 0eorg|ar ou||d|rgs. Vajor role|s |ocaled |r lre area
|rc|ude Tre 0eorge, Tre 8a|rora|, CroWre P|aza Ed|rourgr - Tre Roxourgre ard lole| lrd|go, as
We|| as a c|usler ol |rdeperderl, ooul|que role|s.
west End & haymarket - Tre wesl Erd |rc|udes lre l|rarc|a| d|slr|cl, |rsurarce ard oar||rg oll|ces
as We|| as Ed|rourgr lrlerral|ora| Corlererce Cerlre. Tre wesl Erd & layrar|el area |s We||
correcled v|a lre layrar|el Ra|| 3lal|or, a rajor corruler ard |org-d|slarce desl|ral|or, serv|rg
rucr ol 3col|ard ard rosl lrequerl|y 0|asgoW. A rajor deve|oprerl |s sel lo progress |r lre area as
lrlerserve ras lorred a jo|rl verlure corpary W|lr lre currerl |ardoWrer, T|ger 0eve|oprerls, lo
progress a 200r deve|oprerl al layrar|el rexl lo layrar|el Ra||Way 3lal|or |r Ed|rourgr.
3layc|ly ras s|gred up lor a 15-oed aparl role|, ard lrlerserve |s |oo||rg lo rave lurlrer r|gr qua||ly
role|s a|orgs|de Tesco, Prezzo ard Prel A Varger. Tre projecl ras lre polerl|a| lo creale up lo 3,500
joos |r corslrucl|or ard W|lr|r lre deve|oprerl |lse|l. Ex|sl|rg role|s |r lre area |rc|ude lre
Ca|edor|ar - A wa|dorl l|slor|a lole|, 3reralor 0rard lole| & 3pa ard lre l||lor Ed|rourgr
0rosveror.
Ex|sr|ng lore| $upp|,
Accord|rg lo role| supp|y dalaoase AV:PV, Ed|rourgr corpr|sed 18Z graded role|s ard serv|ced
aparlrerls W|lr a lola| ol rore lrar 11,811 roors as al YT0 Vay 2011. Tre accorrodal|or rar|el |s
We|| oa|arced across a|| qua||ly |eve|s, a|lrougr lre 3- ard 1-slar segrerls accourl lor a s||grl|y |arger
srare. 5-slar role|s ra|e up arourd 8 ol lola| |eys ard serv|ced aparlrerls W|lr lre |easl al Z ol lola|
|eys. 3|rce 2000, supp|y |r Ed|rourgr ras |rcreased oy ar average ol 3 per arrur.
lr Jure 2013 lre l|ve-slar 5-roor 0|assrouse lole|, lorrer|y parl ol lre Elor Co||ecl|or, reopered as a
parl ol Varr|oll's Aulograpr Co||ecl|or lo||oW|rg reluro|srrerl. Tre re-|aurcr ol lre 3reralor 0rard lole|
& 3pa |r Apr|| 2012 lo||oWed a ru|l|-r||||or 3ler||rg Pourd reroval|or as parl ol a g|ooa| re-v|s|lal|or ellorl.
l||lor wor|dW|de recerl|y |aurcred lre Ca|edor|ar, a wa|dorl Aslor|a role| lo||oW|rg a 21 r||||or
E-107
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 10Z
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
|rveslrerl ard lre reluro|srrerl ol Tre Po|rl lole| lo lre 0ouo|elree oy l||lor Ed|rourgr C|ly Cerlre.
l||lor |s |oo||rg al lurlrer groWlr ol |ls orards |r Ed|rourgr, parl|cu|ar|y lre r|d-rar|el l||lor 0arder lrr
ard larplor oy l||lor orards, |r|l|a||y al a|rporl ard c|ly cerlre |ocal|ors
Furure lore| $upp|,
lole| deve|oprerl |r lre 3coll|sr cap|la| |s sel lo rera|r ouoyarl dur|rg 2011 ard oeyord. Tre rolao|e
r|gr||grls W||| oe lre oper|rg ol lre 259-roor lole| lo|s Ed|rourgr Cerlre, 120-roor 0e vere v|||age lole|
ard lre 11-roor lo|s 8udgel Ed|rourgr Par|. Arl|sar Rea| Eslale lrveslors ras agreed lo a ru|l|-r||||or
pourd dea| lo lrarslorr lre Ca|lorgale area, Wr|cr rera|rs ore ol Ed|rourgr's rosl s|gr|l|carl c|ly-cerlre
deve|oprerl opporlur|l|es. 0ela||ed des|grs are currerl|y oe|rg pul lorWard lor lre s|le oased or ex|sl|rg
10,000 square leel r|xed-use corserls, Wr|cr Were approved |r 2008 oy lre C|ly ol Ed|rourgr Courc||.
Trese corserls |rc|ude a roderr 195,000 square leel l|ve-slar role|, W|lr space lor 211-roors ard ar
18,000 square leel corlererce cerlre, arourd 10,000 square leel ol prer|ur oll|ce space, 30 reW srops
ard cales ard 15 reW rores. lr add|l|or, lre 850 r||||or redeve|oprerl ol lre 3l Jares rela|| quarler
|r lre c|ly cerlre |s lo |rc|ude lWo reW role|s, cales, reslaurarls ard over 100 rores.
Varker w|oe lore| Trao|ng Perlormance
3|rce 2002 occuparcy |eve|s rave rera|red sleady, rare|y dropp|rg oe|oW Z5.0, W|lr lre excepl|or ol
2008, 2010 ard 2012. lole|s |r lre W|der Ed|rourgr rar|el sullered lror Wea|er derard dur|rg lre
Lordor 0|yrp|cs Wr|cr corslra|red |rlerral|ora| v|s|lal|or resu|l|rg |r a 1 dec||re or 2011 RevPAR.
loWever, lre rar|el W|de perlorrarce exper|erced a rarg|ra| 0. |rcrease |r RevPAR.
Ed|rourgr parl|cu|ar|y slrugg|ed al lre oeg|rr|rg ol 2012 |rd|cal|rg lral |rlerral|ora| v|s|lal|or lo Lordor
ard Ed|rourgr |s |rexlr|cao|y ||r|ed. v|s|lors slayed aWay due lo lre 0|yrp|cs ard |oca| cr|l|c|sr lral
lesl|va| dales c|asred W|lr lre 0|yrp|cs. 3TR 0|ooa| dala sroWs a 3.8 dec||re |r occuparcy, as role||ers
a|so sullered lror lre reW supp|y erler|rg lre rar|el. Neverlre|ess, a slrorg relurr loWards lre erd ol
lre year a||oWed role||ers lo pusr up rales, resu|l|rg |r pos|l|ve overa|| resu|ls.
3easora||ly |r Ed|rourgr's role| perlorrarce |s cr|el|y |ed oy everls ard corlererces occurr|rg |r lre c|ly
|rc|ud|rg corcerls ard rugoy |rlerral|ora|s al Vurrayl|e|d 3lad|ur. A|lrougr slrorg perlorrarce |s
10,Z82 10,90Z
11,2Z
12,052 12,098 12,098 12,2Z9
12,0
Z98
181
32Z
0
2,000
1,000
,000
8,000
10,000
12,000
11,000
1,000
2009 2010 2011 2012 2013 2011 2015 201
N
u
r
o
e
r
o
l
R
o
o
r
s
Add|t|ons to hote| 8upp|y |n Ed|nburgh (2009- 201}
Ex|sl|rg 3upp|y Fulure Roors 3upp|y
3ource: JLL, lrduslry 3ources
E-108
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 108
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
acr|eved |r lre spr|rg, lre pea| lerds lo oe reacred |r Augusl Wrer lre c|ly's Augusl lesl|va| la|es p|ace.
Tre Ed|rourgr Fesl|va| |s a rorlr |org arls exlravagarza Wr|cr aclua||y corsl|lules severa| lesl|va|s
rurr|rg al lre sare l|re. LoWesl perlorrarce lerds lo oe recorded |r lre W|rler rorlrs.
Perlorrarce over 2013 |rd|cales a relurr ol ary |oss |r derard dur|rg 2012. RevPAR |rcreased oy a
rolao|e 11.Z, as role|s |r rosl pr|re |ocal|ors oerel|l lror errarced derard lo lre c|ly. Resu|ls Were
acr|eved lo||oW|rg ar |rcrease ol 5.9 |r occuparcy ard 8.3 |r A0R, desp|le lre recerl add|l|ors |r
role| supp|y.
Ex|sr|ng $erv|ceo /parrmenr $upp|,
8erv|ced Apartments |n Ed|nburgh (Hay 2014}
8erv|ced Apartment Name Propert|es Un|ts
Cresler Res|derce 1 23
0rearrouse Aoercroroy P|ace 2 11
Ed|rourgr Res|derce 1 29
Ed|rourgr Res|derce lrr oy Varr|oll 1 10Z
Fourla|r Courl 5 152
Fraser 3u|les Ed|rourgr 1 Z5
lo|yrood Aparlrole| 1 11
lol-e| Aparlrerls 2 Z3
Kr|grl Res|derce 1 28
Locrerd 3erv|ced Aparlrerls 1 10
Vercr|slor Res|derce 1 8
0cear Aparlrerls 1 59
0|d ToWr Craroers 1 3Z
Pr|rces 3lreel 3u|les 1 3Z
Roya| 0arder Aparlrerls 1 30
3l 0||es Aparlrerls 3 23
3layc|ly 3erv|ced Aparlrerls 2 1Z
Tota| Ex|st|ng 8upp|y 820
3ource: AVPV
0
10
20
30
10
50
0
Z0
80
90
100
0
20
10
0
80
100
120
110
2005 200 200Z 2008 2009 2010 2011 2012 2013 YT0 Apr
2013
YT0 Apr
2011
0
c
c
u
p
a
r
c
y
(
)
A
0
R
/
R
e
v
P
A
R
(
)
Ed|nburgh hote| Harket - Harket w|de Performance
A0R () RevPAR () 0ccuparcy () 3ource: 3TR 0|ooa|
E-109
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 109
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
As al Vay 2011, lrere are 2 serv|ced aparlrerl properl|es |ocaled across Ed|rourgr, represerl|rg a
supp|y ol 820 ur|ls. Tre vasl rajor|ly ol lrese are |rdeperderl|y operaled, W|lr Z0 ol operalors rav|rg
or|y ore serv|ced properly. 3|r||ar lo role|s, serv|ced aparlrerl properl|es are pr|rar||y |ocaled |r lre 0|d
ToWr ard wesl Erd / layrar|el.
Ed|rourgr ras a |arge percerlage ol urorarded, |rdeperderl|y operaled ur|ls, ra||rg up 15 ol lola|
supp|y. Al preserl, lre |argesl orarded operalor |r Ed|rourgr |s Fourla|r Courl Wr|cr currerl|y ras 152
ur|ls. Tre serv|ced accorrodal|or rar|el |r Ed|rourgr ras s|oW|y exparded over lre |asl lour years,
dr|ver oy a r|gr derard lor oolr srorl ard |org lerr accorrodal|or, lre res|||erce ol lre |odg|rg rar|el
ard lre re|al|ve scarc|ly ol serv|ced accorrodal|or sloc|.
0ue lo lre uNE3C0 wor|d rer|lage slalus ard W|lr r|gr oarr|ers lo erlry, role|s rave lerded lo occupy
lre |arger ard rore des|rao|e properl|es g|ver lrey are rore eslao||sred. w|lr serv|ced aparlrerls oe|rg
re|al|ve|y |rralure |r lre corlexl ol lre |odg|rg |rduslry, serv|ced aparlrerls lerd lo occupy areas ard
ou||d|rgs rore corrersurale W|lr lre|r sly|e or operal|or as a resu|l ol corpel|rg W|lr pr|re |rveslrerl /
occup|ers.
Tre expars|or ol supp|y corl|rued |rlo 2013 W|lr lre 32-ur|l Craroers serv|ced aparlrerls erler|rg lre
rar|el |r lre 0|d ToWr.
Furure $erv|ceo /parrmenr $upp|, {Eo|nourgnj
Tota| 8erv|ced Apartment Rooms Proposed| Under 6onstruct|on
Trere are currerl|y ler corl|rred serv|ced aparlrerl projecls W|lr a lola| ol 801 ur|ls |r lre deve|oprerl
p|pe||re. ll a|| projecls are rea||sed oy lre erd ol 201, serv|ced accorrodal|or supp|y |s expecled lo
|rcrease oy 38. loWever, a|| oul ore ol lre p|pe||re projecls are currerl|y or ro|d / specu|al|ve.
w|lr l|grl supp|y cord|l|ors ard ||r|led |ard lor deve|oprerl, corverl|rg secordary oll|ces lo serv|ced
aparlrerl use W||| oe ar allracl|ve opporlur|ly lor deve|opers. Tre |oca||ly lor lrese serv|ced aparlrerls |s
cr|l|ca| lor lre deve|oprerls lo oe v|ao|e. 0uls|de cerlra| Ed|rourgr, serv|ced accorrodal|or
deve|oprerls are oller |ess allracl|ve due lo s|gr|l|carl|y |oWer occuparcy |eve|s. lr lrese rar|els,
res|derl|a| or role| deve|oprerls lerd lo oe rore leas|o|e.
8erv|ced Apartment Name Un|ts 0pen|ng rand
Adag|o Ed|rourgr NeW waver|ey 11 201 Adag|o
Arcror C|ose 50 3pecu|al|ve lrdeperderl
Craroers, Adar 8olrWe|| louse 5 2011 lrdeperderl
Eder oy uroar v|||a 1Z5 3pecu|al|ve uroar v|||a
Fraser 3u|les 121 0r lo|d Fraser 3u|les
Nap|er louse 20 3pecu|al|ve Fourla|r Courl
Pa|rerslor P|ace 1Z 3pecu|al|ve lrdeperderl
3l Jares 0uarler 50 0r lo|d lrdeperderl
3layc|ly 3erv|ced Aparlrerls 15 201Z 3layc|ly
Torpr|crer 3lreel 55 3pecu|al|ve lrdeperderl
Tota| Rooms |n P|pe||ne 804
E-110
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 110
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
9.4 |nvestment Harket
Tre rar|el |r 3col|ard ard olrer prov|rc|a| |ocal|ors re|al|ve lo Lordor |s |ess ouoyarl ard corl|rues lo
oe lerpered oy expeclal|or ol |rcreased supp|y ol r|d-rar|el role|s oecor|rg ava||ao|e lor purcrase.
3rou|d lr|s occur, purcrasers W||| rave grealer cro|ce ard as sucr W||| expecl lo pay a |oWer pr|ce lor
arylr|rg olrer lrar r|gr|y prol|lao|e, pr|re role|s. Purcrasers Wou|d rave lo dec|de oelWeer pay|rg a
corpel|l|ve pr|ce lor lre r|grl lo rece|ve prol|ls or purcrase ar urder-perlorr|rg role| al a |oWer pr|ce ard
|rvesl |r lre role| |r order lo |rcrease prol|lao|||ly |r lre lulure. 0erard lror role||ers lor represerlal|or |r
Ed|rourgr rera|rs r|gr W|lr rosl requ|rererl slraleg|es ||sl|rg Ed|rourgr secord or|y lo Lordor ard
aoove 0|asgoW ard olrer 3coll|sr |ocal|ors |r lerrs ol pr|or|ly.
8e|oW We ||sl a ruroer ol recerl lrarsacl|ors:
9.5 Harket 0ut|ook
lole| lrad|rg perlorrarce |r Ed|rourgr s|oWed s|gr|l|carl|y due lo Wea|er v|s|lor derard dur|rg lre
Lordor 0|yrp|cs Wr|cr corslra|red |rlerral|ora| v|s|lal|or. loWever, W|lr |rproved lrad|rg perlorrarce |r
2013 lre rar|el ras derorslraled res|||erce. Trerelore, |r 2011, We expecl lo see corl|rued groWlr or
lrad|rg l|gures oac|ed oy lre arr|va| ol lre Ryder Cup, lorecor|rg Year ard CorrorWea|lr 0ares.
lr 2013, |rlerral|ora| v|s|lor arr|va|s lo Ed|rourgr reacred 1.3 r||||or, record|rg a 1.1 dec||re over lre
pr|or year. lr 2005, |rlerral|ora| lour|sl arr|va|s oro|e lre 1 r||||or rar| ard rave rovered arourd 1.3
r||||or lor lre pasl lrree years. lr 2012, |rlerral|ora| lour|sl arr|va|s represerled 35.5 ol a|| v|s|ls.
3|rce 2002, occuparcy |eve|s rave rera|red sleady, rare|y dropp|rg oe|oW Z5.0, W|lr lre excepl|or ol
2008, 2010 ard 2012. lole|s |r lre W|der Ed|rourgr rar|el sullered lror Wea|er derard dur|rg lre 2012
Lordor 0|yrp|cs Wr|cr corslra|red |rlerral|ora| v|s|lal|or resu|l|rg |r a 1 dec||re or 2011 RevPAR.
Perlorrarce |r 2013 |rd|cales a relurr ol ary |oss |r derard dur|rg 2012. RevPAR |rcreased oy a
rolao|e 11., as role|s |r rosl pr|re |ocal|ors oerel|l lror errarced derard lo lre c|ly. Resu|ls Were
acr|eved lo||oW|rg ar |rcrease ol 1.3 |r occuparcy ard 8.3 |r A0R, desp|le lre recerl add|l|ors |r
role| supp|y. lr 2011, We expecl lo see corl|rued groWlr or lrad|rg l|gures oac|ed oy lre arr|va| ol lre
Ryder Cup, lorecor|rg Year ard CorrorWea|lr 0ares.
Tre u3A rera|rs Ed|rourgr's |argesl s|rg|e |rlerral|ora| source rar|el lor v|s|lors al 1 |r 2011,
reporl|rg ar approx|rale 50.0 groWlr over lre pr|or year. 0errar lo||oWs c|ose|y oer|rd, ard W|lr
1Z1,000 v|s|lors secures a 13.0 srare. lla|y ard Frarce reporled lre grealesl dec||re |r v|s|lor arr|va|s,
la|||rg oy rore lrar 30 eacr. Frarce reporled a 3Z,000 dec||re |r v|s|lors, Wr||e lla|y saW a 25,000 drop
oll.
lr 2011, overseas |e|sure lr|ps lo Ed|rourgr represerled .0 ol lola| arr|va|s, W|lr v|s|l|rg lr|erds ard
re|al|ves secured lre secord |argesl srare al 19.0. Tre rera|rder ol v|s|lors arr|ved |r Ed|rourgr lor
Reported
Pr|ce
(CP}
Trave|odge Ed|rourgr wesl Erd Jur-13 1Z9 .5 r||||or 3,313 8r|llar|a lole|s L|oyds 8ar||rg 0roup
Apex waler|oo P|ace lole| Feo-13 18Z 10 r||||or 53,1Z C8 R|crard E|||s 0roup, lrc. (C8RE) Apex lole|s Lld
Proposed lo|s 3ly|e 3l ArdreW 3quare 0ec-12 103 r||||or 58,252 Accor Roya| Lordor Vulua|
lo|s CoWgale (ForWard Furd|rg) 0cl-12 259 30. r||||or 118,11Z La3a||e lrveslrerl Varagererl (LlV) Jarsors Properly
3pr|rgs|de 3erv|ced Aparlrerls Ed|rourgr Jur-12 0 Z.5 r||||or 125,000 Assoc|aled 8r|l|sr Foods P|c AVA(NeW ToWr) Lld
Prer|er lrr Ed|rourgr C|lyCerlre (Pr|rces 3lreel) Var-12 9Z 31 r||||or 350,515 La3a||e lrveslrerl Varagererl (LlV) 0erarore Properly 0roup
layrar|el louse Aug-11 115 5.3 r||||or 3,20Z Ture lole|s Te|erea| Tr||||ur
Car|lor 0ale Ed|rourgr Var-11 200 Z.5 r||||or 3Z,500 Cuc|l|e|d 0roup Lld Vourlgrarge L|r|led
Purchaser
3ource: JLL
Property
Transact|on
0ate
Rooms
Pr|ce per
room
Vendor
E-111
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 111
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
ous|ress purposes. Trere are p|ars lo exlerd Ed|rourgr a|rporl W|lr passerger ruroers expecled lo
reacr 2 r||||or oy 2030.
Tre Ed|rourgr lrar projecl |s roW corp|eled ard oper lo passergers. Tre rev|sed ||re roW rurs lror
Yor| P|ace, c|ose lo lre 3l Jares Cerlre, lo Ed|rourgr A|rporl. 0pl|ors rera|r lor exlerd|rg lre ||re |r
accordarce W|lr lre or|g|ra| p|ars lo prov|de ar Ed|rourgr relWor| oul ro l|resca|e ras yel oeer
proposed.
9. Fraser 8u|tes Ed|nburgh
Tre Fraser 3u|les Ed|rourgr |s |ocaled |r lre cerlre ol 3col|ard's cap|la|, or lre easl s|de ol 3l 0||es
3lreel, jusl oll lre Roya| V||e. Ed|rourgr Casl|e |s |ocaled 200 relres Wesl ol lre Fraser 3u|les. Tre
surrourd|rg uses corpr|se a r|x ol orarded ard urorarded role|s, reslaurarls ard correrc|a| properl|es
(oll|ce / rela||). Tre 3coll|sr Nal|ora| 0a||ery ard Pr|rces 3lreel 0arders are |ocaled lo lre rorlr ol lre
properly ard lo lre easl |s lre Pa|ace ol lo|yrood louse, 0ur 0yrar|c Earlr ard lre 3coll|sr Par||arerl.
To lre soulr ol lre Fraser 3u|les are lre Nal|ora| Vuseur ol 3col|ard ard lre ra|r carpus lor Ed|rourgr
ur|vers|ly. Tre 0uarlerr||e deve|oprerl, |ocaled jusl ouls|de lre 0|d ToWr, ras recerl|y lrarsacled. w|lr
lre purcrase oy Voorl|e|d, We expecl lurlrer add|l|or lo lre currerl r|x ol 3,500 square leel ol oll|ce space,
900 aparlrerls, 55,000 square leel ol rela|| ard |e|sure space ard lre Res|derce lrr oy Varr|oll.
Fraser 8u|tes Ed|nburgh
Address: 12-2 3l 0||es 3lreel
Ed|rourgr, El1 1PT
No. ol Aparlrerls: Z5
Veel|rg 3pace: 1 Veel|rg roor
Food & 8everage: Tre 8roadsreel 8|slro
0lrer Fac|||l|es: 0yrras|ur
3ource: lole| Varagererl
$erv|ceo /parrmenr Dperaror lnlormar|on
Tre Fraser 3u|les Ed|rourgr |s operaled oy Frasers losp|la||ly. P|ease reler lo 3ecl|or 3.8 Fraser 3u|les
3|rgapore - 3erv|ced Aparlrerl 0peralor lrlorral|or lor rore |rlorral|or.
Ex|sr|ng 0omper|r|ve lore|s
Tre suojecl role|'s corpel|l|ve sel |s |derl|l|ed as lo||oWs:
Property Rooms 0perator
Fraser 8u|tes Ed|nburgh 75 Fraser 8u|tes
Rad|ssor 8|u lole| 238 Car|sor Rez|dor lole| 0roup
Tre loWard lole| 18 Tre Ed|rourgr Co||ecl|or
Crarr|rg's lole| 11 Tre Ed|rourgr Co||ecl|or
Va|ra|sor Ed|rourgr 100 Va|ra|sor
3colsrar lole| 9 3colsrar lole| 0roup
Tre 8orrar lole| 18 ToWr louse Corpary
Tre 0|assrouse Aulograpr Co||ecl|or 5 weslrorl losp|la||ly
Apex C|ly 119 Apex lole|s
lole| 0u v|r Ed|rourgr 1Z Va|ra|sor
Tota| Number of Rooms 820
3ource: lole| Varagererl
E-112
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 112
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Tre suojecl properly |s a orarded serv|ced aparlrerl Wr|cr operales |r lre lour slar calegory ard |s rore
a||r lo a role| slralegy, W|lr average |erglr ol slay recorded al 2.5 days as al YT0 3epleroer 2013. Tre
suojecl properly Was exlers|ve|y rerovaled lo a r|gr slardard (|rc|ud|rg su|les) |r 2009, Wrer |l Was
corverled lror lorrer |oca| aulror|ly oll|ces lo serv|ced aparlrerls. 0uesl derard |s ra|r|y dr|ver oy lre
|e|sure seclor W|lr approx|rale|y 21 ard a lurlrer 35 der|ved lror lre 8esl Ava||ao|e Rale rar|el.
Tre corpel|l|ve sel aoove |s rade up ol a r|xlure ol rucr |arger orarded role| properl|es Wr|cr rave
slrorg lears lo operale lre role| ard a|so rave lre ao|||ly lo dr|ve add|l|ora| reverues lror corlererce
ard oarquel|rg ard rore lood ard oeverage oller|rgs. w|lr|r lre corpel|l|ve sel are uK oased operalors
sucr as Va|ra|sor, Apex lole|s as We|| as |oca| operalors sucr as lre ToWr louse Corpary ard lre
Ed|rourgr Co||ecl|or.
Perlormance ol 0omper|r|ve $er
Tre corpel|l|ve sel, Wr|cr |rc|udes lre Rad|ssor 8|ue Ed|rourgr; lre loWard lole|; Crarr|rg's lole|s;
Va|ra|sor Ed|rourgr; 3colsrar lole| Ed|rourgr; lre 8orrar lole|; lre 0|assrouse Aulograpr
Co||ecl|or; Apex C|ly; lole| 0u v|r Ed|rourgr; 0&v Roya| V||e ard exc|udes lre suojecl properly acr|eved
a RevPAR ol 89.0 |r 2013. Tr|s corpares lo 13. acr|eved oy lre W|der reg|ora| uK rar|el. As al
0eceroer 2013, RevPAR ol lre corpel|l|ve sel ras |rcreased 1.1 corpared lo |asl year. Tr|s |s 2.2
oe|oW lre groWlr ol lre W|der reg|ora| uK rar|el.
Tre Fraser 3u|les Ed|rourgr lra||s oer|rd lre corpel|lor sel |r lerrs ol RevPAR, a|oe|l rarg|ra||y, ard
Was sore 0.3 |oWer al lre erd ol 2013. Properly perlorrarce Was, roWever, up 9.1 as al YT0
0eceroer 2013 as corpared lo lre sare per|od |r 2012.
Tre lulure slralegy ol Fraser 3u|les Ed|rourgr |s lo acr|eve rax|rur reverue over lre surrer rorlrs
oy opl|r|s|rg y|e|d slralegy. lr lre |oW seasor pusr|rg |org slays W||| |rcrease lre prol|lao|||ly ol lre roors
deparlrerl. To |rcrease lre corporale segrerl, lre Fraser 3u|les Ed|rourgr W||| |rcrease lre|r prol||e
|rc|ud|rg prorol|or |r 3|rgapore us|rg orard slrerglr lrere lo ercourage v|s|lal|or lo Ed|rourgr.
0
20
10
0
80
100
120
110
10
180
J
a
r
-
1
3
F
e
o
-
1
3
V
a
r
-
1
3
A
p
r
-
1
3
V
a
y
-
1
3
J
u
r
-
1
3
J
u
|
-
1
3
A
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-
1
3
3
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3
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1
3
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-
1
3
R
e
v
P
A
R
(
)
Fraser 8u|tes Ed|nburgh RevPAR 2013
Fraser 3u|le Ed|rourgr RevPAR Corpel|l|ve 3el RevPAR
3ource: 3TR 0|ooa|
E-113
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 113
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
$wDT /na|,s|s ol Fraser $u|res Eo|nourgn
8trengths weaknesses
lrproved l|l oul srou|d allracl |ey
|rlerral|ora| v|s|lor rar|els
Tre suojecl properly ras lre ao|||ly lo dr|ve
r|gr roor rales parl|cu|ar|y W|lr lre su|les
8erel|ls lror F&8 ard ar |rpress|ve
gyrras|ur
A cerlra||y |ocaled, good lour slar aparlrerls
W|lr a roderr sly|e
No a|r cord|l|or|rg |s a corror guesl
corp|a|rl
No accred|lal|or lor serv|ced aparlrerls as
yel
Lac| ol corlererce space |r corpar|sor lo
lre corpel|lor role|s
0pportun|t|es Threats
lrcerl|v|se |orger slays espec|a||y |r |oW
seasor lo |rcrease oase ous|ress
Adjusl lre geograpr|c r|x ol lre role| W|lr
rore lror ar |rlerral|ora| rar|el
0roW lre corporale seclor ous|ress lo
|rcrease corlr|oul|or ard d|vers|ly ol lre
ous|ress r|x
Polerl|a| lo groW oolr A0R ard occuparcy
W|lr soll reluro|srrerl
Tre oper|rg ol lre Craroers W||| |ead lo
sore |oss ol ous|ress
Tre g|ooa| ellecls ol lre ecoror|c doWrlurr
corl|rue |r lre srorl lerr
Polerl|a| reW role| sloc| |r lre area, a|oe|l
lre rajor|ly ol sloc| due lo core or||re |s |r
lre ||r|led serv|ce / oudgel seclor
E-114
lrdeperderl lole| ard 3erv|ced Aparlrerl Var|el lrduslry Correrlar|es Page 111
Prepared lor Frasers losp|la||ly Assel Varagererl Ple. Lld, Tre Trusl Corpary (As|a) L|r|led Vay 2011
ard Frasers losp|la||ly Trusl Varagererl Ple. Lld.
Appendix 1
Maps of Localities of Clients Hotel and
Serviced Apartment Portfolio
E-115
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APPENDIX F
INDEPENDENT TAXATION REPORT
The Board of Directors
Frasers Hospitality Asset Management Pte. Ltd.
(in its capacity as Manager of Frasers Hospitality Real Estate Investment Trust) (the REIT
Manager)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
The Trust Company (Asia) Limited
(in its capacity as Trustee of Frasers Hospitality Real Estate Investment Trust) (the REIT
Trustee)
8 Marina Boulevard
#05-02, Marina Bay Financial Centre
Singapore 018981
The Board of Directors
Frasers Hospitality Trusts Management Pte. Ltd.
(in its capacity as Trustee-Manager of Frasers Hospitality Business Trust) (the
Trustee-Manager)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
30 June 2014
Dear Sirs
INDEPENDENT TAXATION REPORT
This letter has been prepared at the request of the REIT Manager for inclusion in the prospectus
(the Prospectus) to be issued in relation to the initial public offering of the stapled securities (the
Stapled Securities) in Frasers Hospitality Trust (FHT) on the Main Board of Singapore
Exchange Securities Trading Limited.
The purpose of this letter is to provide prospective purchasers of the Stapled Securities with an
overview of the Singapore, Australia, Jersey, the United Kingdom, Japan and Malaysia income tax
consequences of the acquisition, ownership and disposal of the Stapled Securities. This letter
addresses principally purchasers who hold the Stapled Securities as investment assets.
Purchasers who acquire the Stapled Securities for dealing purposes should consult their own tax
advisers concerning the tax consequences of their particular situations.
This letter is not a tax advice and does not attempt to describe comprehensively all the tax
considerations that may be relevant to a decision to purchase, own or dispose of the Stapled
Securities. Prospective purchasers of the Stapled Securities should consult their own tax advisers
to take into account the tax law applicable to their particular situations. In particular, prospective
purchasers who are not Singapore tax residents are advised to consult their own tax advisers to
take into account the tax laws of their respective country of tax residence and the existence of any
tax treaty which their country of tax residence may have with Singapore.
F-1
This letter is based on the Singapore, Australia, Jersey, the United Kingdom, Japan and Malaysia
income tax laws and the relevant interpretation thereof current as at the date of this letter, all of
which are subject to change, possibly with retroactive effect.
Words and expressions defined in the Prospectus have the same meaning in this letter. In
addition, unless the context requires otherwise, words in the singular include the plural and the
other way around and words of one gender include the other gender.
GENERAL PRINCIPLES OF TAXATION OF A TRUST
The income of a trust derived from or accrued in Singapore is chargeable to Singapore income
tax. In addition, income earned outside Singapore and received or deemed received in Singapore
is also chargeable to Singapore income tax unless otherwise exempted. There is no capital gains
tax in Singapore. However, gains from the sale of investments (including real properties) are
chargeable to tax if such gains are derived from a trade or business of dealing in investments
(including real properties). Singapore income tax is imposed on all income chargeable to tax after
deduction of the allowable expenses incurred and capital allowances, if any. Such income of the
trust is assessed to tax in the name of the trustee at the prevailing corporate tax rate.
However, where a trust derives tax exempt income, the beneficiary of the trust is also exempt from
tax on the tax exempt income of the trust to which he is beneficially entitled.
Taxation of FH-REIT
FH-REIT has obtained the Tax Transparency Ruling and the Foreign Sourced Income Tax
Exemption Rulings (collectively, the Tax Rulings) from the IRAS in respect of the Singapore
taxation of certain income from the Singapore Properties and from the properties located
overseas, respectively. In accordance with the Tax Rulings, the Singapore taxation consequences
for FH-REIT and that of the Stapled Securityholders are described below.
Taxable Income of FH-REIT
Except as detailed in the paragraphs below, the REIT Trustee will be subject to Singapore income
tax at the prevailing corporate tax rate on Taxable Income of FH-REIT.
The current Singapore corporate tax rate is 17.0%.
Specified Taxable Income of FH-REIT
FH-REIT has obtained the Tax Transparency Ruling from the IRAS in respect of the Specified
Taxable Income (as defined herein) derived from the Singapore Properties. Such income
includes rent from the Singapore Properties but not gains from the disposal of the Singapore
Properties.
The application of the Tax Transparency Ruling is conditional upon the REIT Trustee and the REIT
Manager fulfilling certain terms and conditions including distribution of at least 90.0% of Specified
Taxable Income by the REIT Trustee to the Stapled Securityholders in the year in which the
income is derived by the REIT Trustee. The REIT Trustee and the REIT Manager are required to
take all reasonable steps necessary to safeguard the IRAS against tax leakages and to comply
with all administrative requirements to ensure ease of tax administration.
F-2
Subject to the terms and conditions of the Tax Transparency Ruling, the REIT Trustee will not be
taxed on Specified Taxable Income distributed to the Stapled Securityholders in the year in which
the income was derived. Instead, the REIT Trustee and the REIT Manager would undertake to
deduct income tax at source at the prevailing corporate tax rate from distributions made to certain
Stapled Securityholders out of such Specified Taxable Income as discussed below. To the extent
that the beneficial owner is a Qualifying Stapled Securityholder (as defined herein), the REIT
Trustee and the REIT Manager will make the distributions without deducting any income tax at
source. Also, to the extent that the beneficial owner is a Qualifying Foreign Non-Individual
Stapled Securityholder (as defined herein), the REIT Trustee and the REIT Manager would
undertake to deduct income tax at source at the reduced rate of 10.0% for distributions made up
to 31 March 2015, unless otherwise extended.
A Qualifying Stapled Securityholder
1
refers to a Stapled Securityholder who is:
an individual;
a company incorporated and tax resident in Singapore;
a branch in Singapore of a company incorporated outside Singapore that has obtained IRAS
approval for distributions to be made by FH-REIT to it without deduction of tax; or
body of persons (excluding partnerships) incorporated or registered in Singapore, including:
(i) a charity registered under the Charities Act, Chapter 37 of Singapore or established by
an Act of Parliament;
(ii) a town council;
(iii) a statutory board;
(iv) a co-operative society registered under the Co-operative Societies Act, Chapter 62 of
Singapore; and
(v) a trade union registered under the Trade Unions Act, Chapter 333 of Singapore.
A Qualifying Foreign Non-Individual Stapled Securityholder is a person other than an individual
not resident in Singapore for Singapore income tax purposes and:
who does not have a permanent establishment in Singapore; or
who carries on an operation in Singapore through a permanent establishment in Singapore,
where the funds used by that person to acquire the Stapled Securities are not obtained from
that operation in Singapore.
1
Does not include a person acting in the capacity of a trustee
F-3
To obtain distributions free of tax deduction at source, or at the reduced rate of 10.0%, Qualifying
Stapled Securityholders or Qualifying Foreign Non-Individual Stapled Securityholders must
disclose their respective tax status in a prescribed form provided by the REIT Trustee and the
REIT Manager (see Annexes A and B).
Where the Stapled Securities are held in joint names, the REIT Trustee and the REIT Manager will
deduct income tax from the distributions made out of FH-REITs Specified Taxable Income at the
prevailing corporate tax rate, unless all the joint owners are individuals.
Where the Stapled Securities are held through a nominee, the REIT Trustee and the REIT
Manager will deduct income tax from the distributions made out of FH-REITs Specified Taxable
Income at the prevailing corporate tax rate unless:
the nominee can demonstrate that the Stapled Securities are held for beneficial owners who
are Qualifying Stapled Securityholders for which the REIT Trustee and the REIT Manager
would not deduct any tax from the distributions. The nominee should make a declaration of
the status of the beneficial owners of the Stapled Securities and provide certain particulars
of the beneficial owners of the Stapled Securities to the REIT Trustee and the REIT Manager
in a prescribed form provided by the REIT Trustee and the REIT Manager. Where the Stapled
Securities are held through more than 1-tier of nominees, the REIT Trustee/REIT Manager
must obtain confirmation from the ultimate beneficiaries that they are Qualifying Stapled
Securityholders. If the ultimate beneficiaries do not provide a confirmation of their status, the
REIT Trustee/REIT Manager must withhold tax on the distribution at the prevailing corporate
tax rate. The nominee should also maintain adequate and sufficient information and
documentation to verify and be satisfied with the identity of the beneficial owners; and
the nominee can demonstrate that the Stapled Securities are held for beneficial owners who
are Qualifying Foreign Non-Individual Stapled Securityholders, for which the REIT Trustee
and the REIT Manager would deduct/withhold tax at the reduced tax rate of 10.0% from the
distributions made up to 31 March 2015, unless otherwise extended. The nominee should
make a declaration of the status of the beneficial owners of the Stapled Securities and
provide certain particulars of the beneficial owners of the Stapled Securities to the REIT
Trustee and the REIT Manager in a prescribed form provided by the REIT Trustee and the
REIT Manager. Where the Stapled Securities are held through more than 1-tier of nominees,
the REIT Trustee/REIT Manager must obtain confirmation from the ultimate beneficiaries that
they are Qualifying Foreign Non-Individual Stapled Securityholders. If the ultimate
beneficiaries do not provide a confirmation of their status, the REIT Trustee/REIT Manager
must withhold tax on the distribution at the prevailing corporate tax rate. The nominee should
also maintain adequate and sufficient information and documentation to verify and be
satisfied with the identity of the beneficial owners.
FH-REIT will distribute 100.0% of its Specified Taxable Income for the Forecast Period 2014 and
the Projection Year 2015. Thereafter, FH-REIT should distribute at least 90.0% of its Specified
Taxable Income on a semi-annual basis. Any amount of the Specified Taxable Income not
distributed will be assessed to Singapore income tax at the prevailing corporate tax rate, and the
tax assessed will be collected from the REIT Trustee on such amount. In the event where any
subsequent distribution is made out of such after tax Specified Taxable Income retained by
FH-REIT, the REIT Trustee and the REIT Manager will not have to make a further deduction of
income tax from the distribution made.
F-4
Notwithstanding the aforesaid, the Specified Taxable Income as computed by the IRAS may be
different from that determined by the REIT Manager for distribution purposes. To ease tax
compliance and governance, in the event that the amount finally agreed with the IRAS is different
from the amount of Specified Taxable Income determined by the REIT Manager for distribution
purposes, the difference will be added to or deducted from the Specified Taxable Income of the
REIT Trustee for the next distribution immediately after the difference has been agreed with the
IRAS (Rollover Income Adjustments).
This arrangement is accepted based on the understanding that:
(i) at least 90.0% of the difference has to be distributed to the Stapled Securityholders;
(ii) the shortfall in distribution is not material;
(iii) no major issue that would cause undue delay in reaching the agreement with the IRAS is
envisaged; and
(iv) the IRAS reserves the right to review such arrangement as and when needed.
The IRAS has expressly reserved the rights to review, amend and revoke the Tax Transparency
Ruling either in part or in whole at any time.
(See Risk Factors Risks Relating to an Investment in the Stapled Securities for further details.)
Tax Exempt Income of FH-REIT
Foreign sourced income
FH-REIT has obtained a Foreign Sourced Income Tax Exemption Ruling from the IRAS on the
Singapore taxation of trust distributions received from MIT Australia. Pursuant to the ruling, the
REIT Trustee will be exempt from Singapore income tax on trust distributions received from MIT
Australia. Such income will be regarded as Tax Exempt Income of FH-REIT. The Foreign Sourced
Income Tax Exemption Ruling is granted subject to certain conditions.
Singapore sourced dividends
Dividend income received by FH-REIT from the Singapore Subsidiaries will not be subject to
Singapore income tax in the hands of the REIT Trustee. They will be regarded as Tax Exempt
Income of FH-REIT.
F-5
Return of Capital to FH-REIT
Any return of capital received by FH-REIT from its Singapore Subsidiaries and/or MIT Australia is
capital in nature and hence, is not taxable in the hands of the REIT Trustee.
Disposal Gains of FH-REIT
Singapore does not impose tax on capital gains. In the event that the REIT Trustee disposes of
the Singapore Properties, shares in the Singapore Subsidiaries or units in MIT Australia, gains
arising from the disposal will not be subject to Singapore income tax unless the gains are
considered income of a trade or business. If the gains are considered to be trading gains and
derived in or received or deemed received in Singapore, such gains will be assessed to tax,
currently at 17.0%.
Singapore Stamp Duty
In the event of a change in the REIT Trustee, any document effecting the appointment of a new
trustee and the transfer of trust assets from the incumbent trustee to the new trustee will not be
subject to stamp duty.
By virtue of the Stamp Duty (Real Estate Investment Trust) (Remission) Rules 2010, stamp duty
on any contract or agreement or instrument executed prior to or on 31 March 2015 relating to the
transfer on sale of Singapore immovable properties, or 100.0% of the issued share capital of a
Singapore incorporated company that was set up to hold and directly or indirectly holds
immovable property situated outside Singapore, would be remitted. As such, stamp duty will be
remitted for the transfer of the Singapore Properties and the shares of Excellence Prosperity TMK
Pte. Ltd. to FH-REIT.
Singapore GST
GST registration of FH-REIT
FH-REIT could be registered for GST in Singapore on the basis that it would derive rental income
from the leasing of the Singapore Properties, which constitutes a taxable supply for GST
purposes.
Recovery of GST incurred by FH-REIT
Once GST-registered, FH-REIT would be allowed to claim the GST incurred on its business
expenses (such as offering-related and routine operating expenses) for the making of taxable
supplies except for certain disallowed expenses and subject to the normal input tax recovery
rules.
In addition, in the Singapore Budget 2008, the Minister for Finance announced an enhanced
concession for Singapore listed REITs to claim the GST incurred:
on the setting up of their various tiers of SPVs that hold non-residential properties; and
by their SPVs on the acquisition and holding of non-residential properties.
F-6
The GST remission has a qualifying period of up to 31 March 2015 and is subject to meeting
certain qualifying conditions. FH-REIT could therefore recover the GST incurred on the acquisition
and holding of non-residential properties which it indirectly holds, under the enhanced
concession.
Singapore Property Tax
Property tax is assessed on immovable property and is generally computed as a percentage of the
annual value of the immovable property. The annual value is the gross amount at which the
property can reasonably be expected to be let from year to year having regard to the fact that all
outgoings and maintenance are borne by the landlord. The current property tax rate is 10.0%.
For hotel property, the annual value of hotel rooms is assessed on a fixed percentage (currently
25.0%) of gross hotel room receipts for the preceding year. The annual values of other areas
assessable to tax (such as food and beverage outlets, function rooms, retail shops and carparks)
are based on their estimated prevailing market rentals.
Taxation of Singapore Subsidiaries
Taxable Income of Singapore Subsidiaries
Except as detailed in the paragraphs below, the Singapore Subsidiaries will be subject to
Singapore income tax at the prevailing corporate tax rate on Taxable Income of the Singapore
Subsidiaries. The current Singapore corporate tax rate is 17.0%.
Tax Exempt Income of Singapore Subsidiaries
Foreign sourced dividend income/interest income/trust distributions
Subject to the meeting of certain qualifying conditions, dividend income received by Excellence
Prosperity TMK Pte. Ltd. and FHT Japan Pte. Ltd. from Kobe Excellence TMK and Excellence
Prosperity Japan K.K., respectively, should not be subject to Singapore income tax pursuant to
Section 13(8) of the Income Tax Act.
FH-REIT has obtained Foreign Sourced Income Tax Exemption Rulings from the IRAS on the
Singapore taxation of interest income, dividend income and trust distributions received by the
Singapore Subsidiaries originating from the underlying properties in Australia, the United
Kingdom, Malaysia and Japan (as the case may be). Pursuant to these rulings, the Singapore
Subsidiaries will be exempt from Singapore income tax on interest income and trust distributions
received from MIT Australia, dividend and interest income from the Jersey Subsidiaries, interest
income from the Malaysian SPV and interest income from Excellence Prosperity Japan K.K. The
Foreign Sourced Income Tax Exemption Rulings are granted subject to certain conditions.
F-7
Return of Capital to Singapore Subsidiaries
Any return of capital received by the Singapore Subsidiaries from MIT Australia, the Jersey
Subsidiaries, the Malaysian SPV, Kobe Excellence TMK and Excellence Prosperity Japan K.K. is
capital in nature and hence, is not taxable in the hands of the Singapore Subsidiaries.
Disposal Gains of Singapore Subsidiaries
Singapore does not impose tax on capital gains. In the event that the Singapore Subsidiaries
dispose their shares in MIT Australia, the Jersey Subsidiaries, the Malaysian SPV, Kobe
Excellence TMK and Excellence Prosperity Japan K.K., gains arising from the disposal will not be
subject to Singapore income tax unless the gains are considered income of a trade or business.
If the gains are considered to be trading gains and derived in or received or deemed received in
Singapore, such gains will be assessed to tax, currently at 17.0%.
Taxation of FH-BT
Singapore Income Tax
FH-BT which is registered as a business trust in Singapore under the Business Trust Act will be
treated like a company under the one-tier corporate tax system for Singapore income tax
purposes. Consequently, FH-BT will be assessed to Singapore income tax on its Taxable Income,
if any, at the prevailing corporate tax rate in accordance with the Income Tax Act.
Singapore GST
FH-BT could not be registered in Singapore for GST on the basis that it is currently dormant and
does not derive any taxable supplies. However, in the event that it subsequently undertakes
activities and derives taxable supplies, it would be eligible for GST registration.
Singapore Taxation of Stapled Securityholders
FH-REIT Distributions out of Taxable Income
Stapled Securityholders will not be subject to Singapore income tax on distributions made out of
FH-REITs income that has been taxed at the REIT Trustee level. Accordingly, except as detailed
in the paragraphs below, distributions made by FH-REIT out of Taxable Income (e.g. distributions
made out of after tax Specified Taxable Income not distributed by FH-REIT or out of gains or
profits taxed as trading gains to the Stapled Securityholders) will not be subject to any tax
deduction at source. No tax credit will be given to any Stapled Securityholder on the tax payable
by the REIT Trustee on such Taxable Income.
FH-REIT Distributions out of Specified Taxable Income
Individuals who hold Stapled Securities as investment assets
Individuals who hold Stapled Securities as investment assets (excluding individuals who hold
such Stapled Securities through a partnership in Singapore) are exempt from Singapore income
tax on the distributions made by FH-REIT, regardless of the individuals nationality or tax
residence status.
F-8
Individuals who hold Stapled Securities as trading assets or through a partnership in Singapore
Individuals who hold the Stapled Securities as trading assets or through a partnership in
Singapore are subject to Singapore income tax on the gross amount of distributions that are made
out of FH-REITs Specified Taxable Income. Such distributions must be declared in the income tax
returns of these individuals and will be taxed in the hands of these individuals at their applicable
income tax rates.
Non-individuals other than Qualifying Foreign Non-Individual Stapled Securityholders
Non-individual Stapled Securityholders are subject to Singapore income tax on the gross amount
of distributions that are made out of FH-REITs Specified Taxable Income, unless specifically
exempted, irrespective of whether or not tax has been deducted from the distributions by the REIT
Manager and the REIT Trustee.
Where tax has been deducted at source, the tax deducted is not a final tax. Non-individual Stapled
Securityholders can offset tax deducted at source against their Singapore income tax liabilities.
Qualifying Foreign Non-Individual Stapled Securityholders
Qualifying Foreign Non-Individual Stapled Securityholders will be subject to final tax at the
reduced rate of 10.0% for distributions made out of FH-REITs Specified Taxable Income up to 31
March 2015, unless otherwise extended.
FH-REIT Distributions out of Tax Exempt Income
Stapled Securityholders will not be subject to Singapore income tax on distributions made out of
FH-REITs Tax Exempt Income. No tax will be deducted at source on such distributions.
FH-REIT Distributions out of Return of Capital
Stapled Securityholders will not be subject to Singapore income tax on distributions made by
FH-REIT out of its capital receipts, such as return of capital from the Singapore Subsidiaries or
MIT Australia. No tax will be deducted at source on such distributions.
For Stapled Securityholders who hold the Stapled Securities as trading or business assets and are
liable to Singapore income tax on gains arising from the disposal of the Stapled Securities, the
amount of such distributions will be applied to reduce the cost of the Stapled Securities for the
purpose of calculating the amount of taxable trading gain when the Stapled Securities are
disposed of. If the amount exceeds the cost of the Stapled Securities, the excess will be subject
to tax as a trading income of such Stapled Securityholders.
F-9
FH-REIT Distributions out of Disposal Gains
Stapled Securityholders will not be subject to Singapore income tax on distributions made by
FH-REIT out of gains from the disposal of the Singapore Properties, shares in the Singapore
Subsidiaries or units in MIT Australia. No tax will be deducted at source on such distributions.
FH-BT Distributions
Distributions made by FH-BT out of its profits, if any, to the Stapled Securityholders will be treated
like one-tier dividends. Such distributions will be exempt from Singapore income tax in the hands
of the Stapled Securityholders, regardless of their respective status.
Disposal of Stapled Securities
Singapore does not impose tax on capital gains. Any gains on disposal of the Stapled Securities
are not liable to tax provided the Stapled Securities are not held as trading assets. Where the
Stapled Securities are held as trading assets of a trade or business carried on in Singapore, any
gains on disposal of the Stapled Securities are liable to Singapore income tax at the applicable
tax rate.
Singapore GST
Issue and transfer of Stapled Securities
The issue or transfer of ownership of a unit under any unit trust in Singapore is exempt from GST.
Hence, Stapled Securityholders would not incur any GST on the subscription of the Stapled
Securities. The subsequent disposal of the Stapled Securities by a GST-registered Stapled
Securityholder through the SGX-ST or to another person belonging in Singapore is regarded as
an exempt supply and not subject to GST. The disposal or transfer of the Stapled Securities to
another person belonging outside Singapore would constitute zero-rated supplies for Singapore
GST purposes.
Recovery of GST incurred by Stapled Securityholders
Generally, services such as legal fee, brokerage, handling and clearing charges rendered by a
GST-registered person to Stapled Securityholders belonging in Singapore in connection with their
purchase and sale of the Stapled Securities would be subject to GST at the prevailing
standard-rate of 7.0%. Similar services rendered to Stapled Securityholders belonging outside
Singapore could be zero-rated when certain conditions are met.
For Stapled Securityholders belonging in Singapore who are registered for GST, any GST on
expenses incurred in connection with the subscription/acquisition or disposal of the Stapled
Securities is generally not recoverable as input tax credit from the IRAS unless certain conditions
are satisfied. These GST-registered Stapled Securityholders should seek the advice of their tax
advisers on these conditions.
Singapore Stamp Duty
The sale, purchase and transfer of the Stapled Securities is not subject to stamp duty in
Singapore.
F-10
AUSTRALIA TAXATION
Income Tax
Subject to the meeting of certain qualifying conditions, the Australian Trusts will be treated as
flow-through entities for Australian income tax purpose. The Australian Trusts are not subject to
Australian income tax. Their taxable income will effectively be allocated to their unitholders in
proportion to the unitholders interests in the trusts distributable income. The distributions from
MIT Australia to FH-REIT and FHT Australia Pte. Ltd. may be subject to withholding tax depending
on the nature and character of the underlying income or gain. For example, the applicable
withholding tax rate for net rental income and disposal gains on trust units is 15.0% and for
interest income is 10.0%. Where MIT Australia does not qualify for MIT treatment, the distributions
would be subject to Australian tax at 30.0% (where the unitholder is a company) or 45.0% (where
the unitholder is a trust). Distributions of cash in excess of taxable income, commonly referred as
tax deferred distributions which reflect mainly non-cash tax deductible items e.g., depreciation
deductions, are not subject to tax in the hands of the unitholders. Instead, the tax cost base of the
trust units will be reduced.
Loan interest payments made by the MIT Australia to FHT Australia Pte. Ltd., if any, will be subject
to interest withholding tax at 10.0%.
Goods and Services Tax (GST)
GST is a broad-based tax levied on the supplies of most goods, services and other items sold or
consumed in Australia, including the grant of leases. The standard rate of GST is 10.0%.
Stamp Duty
New South Wales (NSW) transfer duty at ad valorem rates of up to 5.5% based on the higher of
consideration or unencumbered market value of the underlying leasehold interest in the Australian
Properties together with any plant and equipment fixed to or transferred with the properties or ad
valorem rates of up to 5.5% based on the lease premium, depending on the mode of transfer,
should be applicable.
Land Tax
Land tax is an annual tax computed based on the taxable value of the land at stepped land tax
rates with a maximum of 2.0% in NSW. The taxable value of the land is determined by the relevant
local government authorities. Australian land tax rates and/or thresholds are generally subject to
change each year and updated information should be obtained when considering the land tax
liability each year.
F-11
JERSEY TAXATION
The Jersey Subsidiaries should be liable to tax in Jersey at the standard rate of 0.0%. There are
certain exemptions to this rate including, amongst others, any income derived from the ownership
or disposal of land in Jersey which is subject to income tax at a rate of 20.0%. For so long as the
Jersey Subsidiaries holds zero tax status, no Jersey withholding tax will be required on dividend
and interest payments made by the Jersey Subsidiaries to FHT UK Pte. Ltd.. Capital gains are not
subject to tax in Jersey.
The Jersey Subsidiaries are registered as International Services Entities which are not required
to account for GST on their supplies and are exempted from being charged GST by its suppliers.
No stamp duty or other taxes are chargeable in Jersey on the issue, transfer, disposal, conversion
or redemption of shares.
UNITED KINGDOM TAXATION
The Jersey Subsidiaries will be subject to UK income tax on their net rental profits derived from
the UK Properties at the basic income tax rate currently at 20.0%. Dividends paid by the Jersey
Subsidiaries to FHT UK Pte. Ltd. should not be subject to UK withholding tax.
Value-Added Tax (VAT)
VAT, currently at the rate of 20.0%, is due on any supply of goods or services made in the UK
where a taxable supply made by a taxable person in the course or furtherance of a business
carried on by the said person, including the grant or variation of leases.
Stamp Duty Land Tax (SDLT)
The applicable rate of SDLT will be determined by whether or not the UK Properties are residential
for SDLT purposes.
The UK Properties are likely to be viewed as non-residential properties for SDLT purposes such
that the non-residential or mixed use rates of SDLT should apply, having a maximum rate of 4.0%
of the VAT inclusive price paid. This is on the basis that not all of the UK Properties answer the
description of residential property and in respect of those that do either their value does not
exceed 500,000 or, if it does exceed that figure, the use to which they will be applied will satisfy
an exemption from the SDLT higher rate.
On this basis, on the grant of the leases to the Jersey Subsidiaries, SDLT of 4.0% should be
payable on the VAT inclusive premium paid.
JAPAN TAXATION
Kobe Excellence TMK and Excellence Prosperity Japan K.K. will be subject to corporate tax on
their taxable income at an effective tax rate of approximately 39.43% for fiscal years beginning
between 1 April 2012 and 31 March 2014, and approximately 37.11% for fiscal years beginning on
or after 1 April 2014.
F-12
Subject to the meeting of certain qualifying conditions, Kobe Excellence TMK will be allowed a
deduction against its taxable income in respect of any dividend distributions it makes to
Excellence Prosperity Japan K.K. and Excellence Prosperity TMK Pte. Ltd. In this regard, where
Kobe Excellence TMK distributes its taxable income to the extent possible, limited Japanese
corporate tax should be payable by Kobe Excellence TMK.
Dividend distributions and interest payments made by Kobe Excellence TMK and Excellence
Prosperity Japan K.K. to Excellence Prosperity TMK Pte. Ltd. and FHT Japan Pte. Ltd.
respectively will be subject to withholding tax at an effective tax rate of 20.42% for a period of 25
years beginning from 1 January 2013. Thereafter, the withholding tax rate will be reduced to
20.0%. Subject to the meeting of certain qualifying conditions, the withholding tax rate may be
reduced to 5.0% and 10.0% for dividend and interest respectively under the Singapore-Japan
DTA. Dividend distributions made by Kobe Excellence TMK to Excellence Prosperity Japan K.K.
will be subject to withholding tax at the 20.42% rate, however, such withholding tax should
generally be fully creditable against Excellence Prosperity Japan K.K.s corporate liability.
Other relevant taxes for Kobe Excellence TMK and Excellence Prosperity Japan K.K.
Fixed Asset Tax and City Planning Tax
The land and building assets of Kobe Excellence TMK will be subject to fixed asset tax and city
planning tax based on their ownership as at 1 January of each year. The tax base for these taxes
is derived from government determined valuations for the assets. The valuation process employed
is relatively formulaic and, as a result, the government determined valuations for any particular
year will not necessarily be in line with the then current market price of the land or building which
a third party purchaser would pay; most typically, the government values tend to be lower than the
market price, although this is ultimately a question of fact in each case.
The standard tax rate is 1.4% for fixed asset tax and 0.3% for city planning tax. Other depreciable
assets of Kobe Excellence TMK will also be subject to fixed asset tax at the same rate, broadly
based on their tax written down value.
Consumption Tax
Japanese consumption tax is a sales based tax applied on supplies of certain goods and services
within Japan. The current rate of consumption tax applied to taxable supplies is 8.0%, however
this is scheduled to potentially increase to 10% from 1 October 2015. Kobe Excellence TMK is a
registered consumption taxpayer in Japan and will accordingly be required to account to the
government for consumption tax collected on its own supplies, but should also be entitled to obtain
credit for consumption tax suffered on its own purchases. In view of the nature of Kobe Excellence
TMKs activity, it is anticipated that consumption tax should wholly or principally represent a timing
cost only and not an absolute cost to Kobe Excellence TMK.
F-13
MALAYSIA TAXATION
The Malaysian SPV will be a tax resident of Malaysia if the management and control of its
business or affairs is exercised in Malaysia during the basis period for a year of assessment.
The Malaysian SPV will be subject to tax on all taxable income accruing in or derived from
Malaysia, including rental income and interest income (if any) after deducting relevant tax-
deductible expenses, industrial building allowances and/or capital allowances. The prevailing
corporate income tax rate in Malaysia is 25.0%. Pursuant to the Budget 2014, the corporate
income tax rate is proposed to be reduced to 24.0% with effect from Year of Assessment 2016.
Interest payments made by the Malaysian SPV to FHT Malaysia Pte. Ltd. should be exempt from
withholding tax in Malaysia to the extent that it is paid in respect of debentures issued in Ringgit
Malaysia other than convertible loan stock approved by the Securities Commission of Malaysia.
Property taxes in the form of quit rent and assessment charges are payable to the land office and
local council respectively. The amount of quit rent varies from state to state while assessment
charges are based on the value of the property determined by the local council.
F-14
Yours faithfully
Leonard Ong
Executive Director, Tax
For and on behalf of
KPMG Services Pte. Ltd.
F-15
F-16
To : [Unit registrar and unit transfer office]
ANNEX A
FORM A
DECLARATION FOR SINGAPORE TAX PURPOSES
Name of registered holder (preprinted) Securities Account No. (preprinted)
Address (preprinted) Holding : Units (preprinted)
Name of Counter: Stapled securities in Frasers Hospitality Trust (comprising Frasers Hospitality Real Estate
Investment Trust and Frasers Hospitality Business Trust) (the "Stapled Securities")
Please read the following important notes carefully before completion of this Form:
1
(a)
(b)
(c)
(d)
2
(a)
(b)
3
4
5
6
7
8
9
(a) has and habitually exercises an authority to conclude contracts;
(b) maintains stock of goods or merchandise for the purpose of delivery on its behalf; or
(c) habitually secures orders wholly and almost wholly for the stapled securityholder or for such other enterprises as are
controlled by the stapled securityholder.
The Trustee and the Manager of Frasers Hospitality Real Estate Investment Trust ("FH-REIT") will not deduct tax from
distributions made out of FH-REIT's taxable income that is not taxed at FH-REIT's level to:
Holders who are individuals and who hold the units either in their sole names or jointly with other individuals;
Holders which are companies incorporated and tax resident in Singapore;
Holders which are Singapore branches of foreign companies that have obtained specific approval from the Inland
Revenue Authority of Singapore to receive the distribution from FH-REIT without deduction of tax; or
(iv) charities registered under the Charities Act (Cap. 37) or established by an Act of Parliament; and
Holders which are non-corporate entities (excluding partnerships) constituted or registered in Singapore, such as:
(i) institutions, authorities, persons or funds specified in the First Schedule to the Income Tax Act (Cap. 134);
(ii) co-operative societies registered under the Co-operative Societies Act (Cap. 62);
(iii) trade unions registered under the Trade Unions Act (Cap. 333);
Holders are required to complete the applicable Section A, B or C if they fall within the categories (b) to (d) stated under Note 1
or Section D if they qualify as a foreign non-individual investor as described under Note 2.
(v) town councils.
The Trustee and the Manager of FH-REIT will rely on the declarations made in this Form to determine (i) if tax is to be
deducted for the categories of stapled securityholders listed in (b) to (d) under Note 1; and (ii) if tax is to be deducted at the rate
of 10% for distributions to foreign non-individual investors. Please therefore ensure that the appropriate section of this Form is
completed in full and legibly and is returned to [Unit registrar and unit transfer office] within the stipulated time limit. Failure to
comply with any of these requirements will render this Form invalid and therefore, the Trustee and the Manager will be obliged
to deduct tax at the prevailing corporate tax rate from the distributions in respect of which this declaration is made.
Holders who do not fall within the classes of stapled securityholders listed in Note 1 and Note 2 above can choose not to return
this Form as tax will be deducted from the distributions made to them at the prevailing corporate tax rate in any case.
Holders who fall within class (a) under Note 1 are not required to submit this declaration form.
For taxable income distributions made to classes of holders that do not fall within the categories stated under Note 1 above, the
Trustee and the Manager of FH-REIT will deduct tax at the rate of 10%
@
if the holders are foreign non-individual investors. A
foreign non-individual investor is one who is not a resident of Singapore* for income tax purposes and:
who does not have a permanent establishment^ in Singapore; or
who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to
acquire the Stapled Securities are not obtained from that operation.
(i) carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or
(ii) has another person acting on the stapled securityholder's behalf in Singapore who:
^ A permanent establishment is defined under Section 2 of the Income Tax Act to mean a fixed place where a business is wholly or partly carried on,
including a place of management, a branch, an office, a factory, a warehouse, a workshop, a farm or plantation, a mine, oil well, quarry or other place
of extraction of natural resources, a building or work site or a construction, installation or assembly project. A stapled securityholder shall be deemed to
have a permanent establishment in Singapore if it:
Holders who hold the Stapled Securities jointly (where at least one of the joint holders is not an individual) or through nominees
do not have to return this Form.
Please make sure that the information given and the declaration made in this Form is true and correct. The making of a false or
incorrect declaration constitutes an offence under the Income Tax Act and the Declarant shall be liable to the appropriate
penalties imposed under the said Act.
This Form must be returned to [Unit registrar and unit transfer office] by [Time] on [Date].
* A company is not a resident of Singapore if the management and control of its business is exercised outside Singapore.
@ The concessionary rate of 10% will expire on 31 March 2015 unless extended.
F-17
ANNEX A1
DECLARATION FOR SINGAPORE TAX PURPOSES
Section A : To be completed by holder which is a Singapore incorporated company
Tick ( / ) either the "Yes" or "No" box Yes No
(a) the Company is incorporated in Singapore and its registration number is
- - ;
(b) the management and control of the Company's business for the preceding year and from the beginning
of this year to the date of this Declaration was exercised in Singapore and there is no intention, at the
time of this Declaration, to change the place of management and control of the Company to a
location outside Singapore; and
(c) the Company has previously filed tax returns with the Inland Revenue Authority of Singapore.
If your reply to (c) is "Yes", please proceed with (d) -
(d) the Company is declared as a tax resident of Singapore
#
based on the latest tax return filed
with the Inland Revenue Authority of Singapore.
Signature of Declarant : ________________________ Date: ________________
Contact No: ________________________
#
A company is tax resident in Singapore if the management and control of its business is exercised in Singapore.
Section B : To be completed by holder which is a Singapore branch of a foreign company
Signature of Declarant : ___________________________ Date : _______________
Contact No: ______________________
Section C : To be completed by holder which falls under Note 1(d)
- an institution, authority, person or fund specified in the First Schedule to the Income Tax Act (Cap. 134).
- a co-operative society registered under the Co-operative Societies Act (Cap. 62).
- a trade union registered under the Trade Unions Act (Cap. 333).
- a charity registered under the Charities Act (Cap. 37) or a charity established by an Act of Parliament.
- a town council.
- any other non-corporate entity (other than a partnership) constituted or registered in Singapore.
Signature of Declarant : _____________________________ Date : ______________
Contact No : ___________________________
Section D : To be completed by holder which falls under Note 2
Tick ( / ) either the "Yes" or "No" box Yes No
(a) the Entity is not a resident of Singapore* for income tax purposes for the preceding year and from the
beginning of this year to the date of this Declaration and there is no intention, at the time of this Declaration,
to change the tax residence of the Entity to Singapore; and
(b) the Entity does not have a permanent establishment^ in Singapore.
If your reply to (b) is "No", please proceed with (c) -
(c) the funds used to acquire the holdings in the Stapled Securities are not obtained by the Entity from any
operation carried on in Singapore through a permanent establishment in Singapore.
Signature of Declarant : _____________________________ Date : ______________
Contact No : ___________________________
*/^ Please see front page.
I, ____________________________________, NRIC/Passport No. _________________________, the Director of
_________________________________________________ ("the Company") hereby declare that the Company is the beneficial owner of the
holdings stated above and that:
I, _________________________________, NRIC/Passport No. _________________, the manager of
_______________________________________________ (the "Singapore Branch") hereby declare that the Singapore Branch is the
beneficial owner of the holdings stated above and that the Inland Revenue Authority of Singapore has granted approval to the Singapore
Branch to receive distribution from FH-REIT without deduction of tax. A copy of the letter of approval dated _____________ is attached.
I, ___________________________, NRIC/Passport No. __________________, the principal officer of
__________________________________________________ ("the Entity") hereby declare that the Entity is the beneficial owner of the
holdings stated above and that the entity is (tick whichever is applicable):
I, ____________________________, NRIC/Passport No. _____________________, the Director/Principal Officer of
____________________________ (the "Entity") hereby declare that the Entity is the beneficial owner of the holdings stated above and that:
F-18
To : [Unit registrar and unit transfer office]
ANNEX B
FORM B
DECLARATION BY DEPOSITORY AGENTS FOR SINGAPORE TAX PURPOSES
Name of registered holder (preprinted) Securities Account No. (preprinted)
Address (preprinted) Holding: Units (preprinted)
Name of Counter: Stapled securities in Frasers Hospitality Trust (comprising Frasers Hospitality Real Estate Investment Trust
and Frasers Hospitality Business Trust) (the "Stapled Securities")
Please read the following important notes carefully before completion of this Form:
1
(i) individuals and the stapled securities are not held through a partnership in Singapore;
(ii) qualifying stapled securityholders; or
(iii) foreign non-individual investors.
2
3 A "qualifying stapled securityholder" refers to:
(i) a company incorporated and tax resident in Singapore;
(ii) non-corporate entities (excluding partnerships) constituted or registered in Singapore; such as:
(a)
(b)
(c)
(d)
(e)
(iii)
4
(i) who does not have a permanent establishment^ in Singapore; or
(ii)
5
6
7
Declaration
Signature of Declarant : _____________________________ Date : ______________
Contact No : ___________________________
(a) has and habitually exercises an authority to conclude contracts;
(b) maintains stock of goods or merchandise for the purpose of delivery on its behalf; or
(c) habitually secures orders wholly and almost wholly for the stapled securityholder or for such other enterprises as are controlled by the stapled
securityholder.
^ A permanent establishment is defined under Section 2 of the Income Tax Act to mean a fixed place where a business is wholly or partly carried on, including a place of
management, a branch, an office, a factory, a warehouse, a workshop, a farm or plantation, a mine, oil well, quarry or other place of extraction of natural resources, a building or
work site or a construction, installation or assembly project. A stapled securityholder shall be deemed to have a permanent establishment in Singapore if it:
a Singapore branch of a foreign company which has obtained from the Inland Revenue Authority of Singapore, a waiver from tax deducted at
source in respect of distributions from FH-REIT.
The Trustee and the Manager of Frasers Hospitality Real Estate Investment Trust ("FH-REIT") will deduct tax at the prevailing corporate tax rate from
distributions made out of FH-REIT's taxable income, that is not taxed at FH-REIT's level, in respect of the Stapled Securities held by you in your
capacity as a Depository Agent except where the beneficial owners of these securities are:
who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to acquire the Stapled
Securities are not obtained from that operation.
Tax will not be deducted for distributions made in respect of the Stapled Securities held by you for the benefit of stapled securityholders who fall
within categories (i) and (ii) of Note 1. Tax will be deducted at the reduced rate of 10%@ for distributions made in respect of the Stapled Securities
held by you for the benefit of foreign non-individuals.
A foreign non-individual is one who is not a resident in Singapore* for income tax purposes and:
institutions, authorities, persons or funds specified in the First Schedule to the Income Tax Act (Cap. 134);
co-operative societies registered under the Co-operative Societies Act (Cap. 62);
trade unions registered under the Trade Unions Act (Cap. 333);
charities registered under the Charities Act (Cap. 37) or established by an Act of Parliament; and
town councils.
(i) carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or
(ii) has another person acting on the stapled securityholder's behalf in Singapore who:
I, _________________________, NRIC/Passport No. ________________, the principal officer of
________________________________________________ ("the Depository Agent") hereby declare that the Stapled Securities registered in the name of
the Depository Agent and deposited in the sub-accounts maintained with The Central Depository (Pte) Ltd, as listed in the Annexes B1 to B3 to this
declaration, belonged beneficially to persons who are individuals, qualifying stapled securityholders (as defined in Note 3 above) and foreign non-
individuals (as defined in Note 4 above), respectively. The details of each of these beneficial owners are also listed in the respective Annexes.
We hereby also undertake to provide the actual amount of gross distribution made to each qualifying stapled securityholder in the format provided in
Annex B2.1 and to email a soft copy of Annex B2.1 to [Unit registrar and unit transfer office] within 21 days from the date of the distribution.
* A company is a not resident of Singapore if the management and control of its business for the preceding year and from the beginning of this year to the date of this declaration
was exercised outside Singapore and there is no intention, at the time of this declaration, to change tax residence of the company to Singapore.
The Trustee and the Manager of FH-REIT will rely on the declarations made in this Form to determine the applicable rate at which tax is to be
deducted in respect of the Stapled Securities held by you in your capacity as a Depository Agent. Please therefore ensure that this Form and the
Annexes are completed in full and legibly and is returned to [Unit registrar and unit transfer office] within the stipulated time limit. Failure to comply
with any of these requirements will render this Form invalid and the Trustee and the Manager will deduct tax at the prevailing corporate tax rate from
the distributions in respect of which this declaration is made.
Please make sure that the information given and the declaration made in this Form is true and correct. The making of false or incorrect declaration
constitutes an offence under the Income Tax Act and the Declarant shall be liable to the appropriate penalties imposed under the said Act.
This Form, together with hard copy of the Annexes, must be returned to [Unit registrar and unit transfer office] by [Time] on [Date]. Please complete
the Annexes using the soft copy of the excel spreadsheet provided to you and also email a soft copy of the completed Annexes to [Unit registrar and
unit transfer office] at [Email] by [Time] on [Date]. Please note that it is compulsory to email the soft copy of the completed Annexes.
@ The concessionary rate of 10% will expire on 31 March 2015 unless extended.
F-19
FRASERS HOSPITALITY TRUST
Annex B1
(comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust)
Distribution Period:
Annex to Declaration Form B - Individuals
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Identification No.* Number of Stapled Securities
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
* This refers to Singapore NRIC No., foreign ID No. or Passport No.
F-20
FRASERS HOSPITALITY TRUST
Annex B2
(comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust)
Distribution Period:
Annex to Declaration Form B - Qualifying Stapled Securityholders
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Registration No.* Number of Stapled Securities
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
* This refers to ROC / Tax Reference No.
F-21
FRASERS HOSPITALITY TRUST
Annex B2.1
(comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust)
Distribution Period:
Annex to Declaration Form B - Qualifying Stapled Securityholders
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Registration No.* Number of units
Gross distribution
paid
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
* This refers to ROC / Tax Reference No.
F-22
FRASERS HOSPITALITY TRUST
Annex B3
(comprising Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust)
Distribution Period:
Annex to Declaration Form B - Foreign Non-Individuals
S/No. CDP Sub-Account No. Name of beneficiary holder(s) Address Number of Stapled Securities
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
APPENDIX G
TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION FOR AND
ACCEPTANCE OF THE STAPLED SECURITIES IN SINGAPORE
Applications are invited for the subscription of the Stapled Securities at the Offering Price on the
terms and conditions set out below and in the relevant application forms to be used for the
purpose of the Offering and which forms part of this Prospectus (the Application Forms) or, as
the case may be, the Electronic Applications (as defined below).
Investors applying for the Stapled Securities in the Offering by way of Application Forms or
Electronic Applications are required to pay in Singapore dollars the Offering Price, subject to a
refund of the full amount or, as the case may be, the balance of the applications monies (in each
case without interest or any share of revenue or other benefit arising therefrom) where (i) an
application is rejected or accepted in part only, or (ii) if the Offering does not proceed for any
reason.
(1) Your application must be made in lots of 1,000 Stapled Securities or integral multiples
thereof. Your application for any other number of Stapled Securities will be rejected.
(2) You may apply for the Stapled Securities only during the period commencing at 9.00 a.m. on
1 July 2014 and expiring at 12.00 p.m. on 10 July 2014. The Offering period may be extended
or shortened to such date and/or time at the discretion of the Managers, in consultation with
the Joint Bookrunners, subject to all applicable laws and regulations and the rules of the
SGX-ST.
(3) (a) Your application for the Stapled Securities offered in the Public Offer (the Public Offer
Stapled Securities), may be made by way of the printed WHITE Public Offer Stapled
Securities Application Forms or by way of Automated teller machine (ATM) belonging
to the Participating Banks (ATM Electronic Applications), the Internet Banking (IB)
website of the relevant Participating Banks, where available (Internet Electronic
Applications), or through the DBS mobile banking platform (mBanking Application,
which, together with ATM Electronic Applications and Internet Electronic Applications,
shall be referred to as Electronic Applications).
(b) Your application for the Stapled Securities offered in the Placement Tranche (the
Placement Stapled Securities), other than the Reserved Stapled Securities, may be
made by way of the printed BLUE Placement Stapled Securities Application Forms (or
in such other manner as the Joint Bookrunners may in their absolute discretion deem
appropriate).
(c) Your application for the Reserved Stapled Securities may only be made by way of the
printed PINK Reserved Stapled Securities Application Forms.
YOU MAY NOT USE YOUR CPF FUNDS TO APPLY FOR THE STAPLED SECURITIES
(4) Only one application may be made for the benefit of one person for the Public Offer
Stapled Securities in his own name. Multiple applications for the Public Offer Stapled
Securities will be rejected, except in the case of applications by approved nominee
companies where each application is made on behalf of a different beneficiary.
You may not submit multiple applications for the Public Offer Stapled Securities via
the Public Offer Stapled Securities Application Form, or Electronic Applications. A
person who is submitting an application for the Public Offer Stapled Securities by way
G-1
of the Public Offer Stapled Securities Application Form may not submit another
application for the Public Offer Stapled Securities by way of Electronic Applications
and vice versa.
A person, other than an approved nominee company, who is submitting an application
for the Public Offer Stapled Securities in his own name should not submit any other
applications for the Public Offer Stapled Securities, whether on a printed Application
Form or through an ATM Electronic Application, Internet Electronic Application or
mBanking Application, for any other person. Such separate applications will be
deemed to be multiple applications and shall be rejected.
Joint or multiple applications for the Public Offer Stapled Securities shall be rejected.
Persons submitting or procuring submissions of multiple applications for the Public
Offer Stapled Securities may be deemed to have committed an offence under the Penal
Code, Chapter 224 of Singapore and the Securities and Futures Act, and such
applications may be referred to the relevant authorities for investigation. Multiple
applications or those appearing to be or suspected of being multiple applications
(other than as provided herein) will be liable to be rejected at our discretion.
(5) Multiple applications may be made in the case of applications by any person for (i) the
Placement Stapled Securities only (via Placement Stapled Securities Application
Forms or such other form of application as the Joint Bookrunners may in their
absolute discretion, or in consultation with the Managers, deem appropriate) or (ii) the
Placement Stapled Securities together with a single application for the Public Offer
Stapled Securities.
Multiple applications may also be made by any person entitled to apply for the Reserved
Stapled Securities, in respect of a single application for the Reserved Stapled Securities and
(i) a single application for the Public Offer Stapled Securities or (ii) a single or multiple
application(s) for the Placement Stapled Securities (whether via the Placement Stapled
Securities Application Forms or in such other manner as the Joint Bookrunners may in their
absolute discretion, or in consultation with the Managers, deem appropriate) or (iii) both (i)
and (ii).
(6) Applications from any person under the age of 18 years, undischarged bankrupts, sole
proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account
holders of CDP will be rejected.
(7) Applications from any person whose addresses (furnished in their printed Application Forms
or, in the case of Electronic Applications, contained in the records of the relevant
Participating Bank, as the case may be) bear post office box numbers will be rejected. No
person acting or purporting to act on behalf of a deceased person is allowed to apply under
the Securities Account with CDP in the deceaseds name at the time of the application.
(8) The existence of a trust will not be recognised. Any application by a trustee or trustees must
be made in his/her or their own name(s) and without qualification or, where the application
is made by way of a printed Application Form by a nominee, in the name(s) of an approved
nominee company or approved nominee companies after complying with paragraph 9 below.
(9) Nominee applications may only be made by approved nominee companies. Approved
nominee companies are defined as banks, merchant banks, finance companies, insurance
companies, licensed securities dealers in Singapore and nominee companies controlled by
them. Applications made by nominees other than approved nominee companies will be
rejected.
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(10) If you are not an approved nominee company, you must maintain a Securities Account
with CDP in your own name at the time of your application. If you do not have an existing
Securities Account with the CDP in your own name at the time of application, your application
will be rejected (if you apply by way of an Application Form) or you will not be able to
complete your application (if you apply by way of an Electronic Application). If you have an
existing Securities Account with CDP but fail to provide your CDP Securities Account number
or provide an incorrect CDP Securities Account number in your Application Form or in your
Electronic Application, as the case may be, your application is liable to be rejected.
(11) Subject to paragraphs 14 and 15 below, your application is liable to be rejected if your
particulars such as name, National Registration Identity Card (NRIC) or passport number
or company registration number, nationality and permanent residence status, and CDP
Securities Account number provided in your Application Form, or in the case of an Electronic
Application, contained in the records of the relevant Participating Bank at the time of your
Electronic Application, as the case may be, differ from those particulars in your Securities
Account as maintained by CDP. If you have more than one individual direct Securities
Account with the CDP, your application shall be rejected.
(12) If your address as stated in the Application Form or, in the case of an Electronic
Application, contained in the records of the relevant Participating Bank, as the case
may be, is different from the address registered with CDP, you must inform CDP of
your updated address promptly, failing which the notification letter on successful
allocation from CDP will be sent to your address last registered with CDP.
(13) This Prospectus and its accompanying Application Forms have not been registered in any
jurisdiction other than in Singapore. The distribution of this Prospectus and its accompanying
Application Forms may be prohibited or restricted (either absolutely or unless various
securities requirements, whether legal or administrative, are complied with) in certain
jurisdictions under the relevant securities laws of those jurisdictions. Without limiting the
generality of the foregoing, neither this Prospectus (including its Application Forms) nor any
copy thereof may be taken, transmitted, published or distributed, whether directly or
indirectly, in whole or in part in or into the United States or any other jurisdiction (other than
Singapore) and they do not constitute an offer of securities for sale into the United States or
any jurisdiction in which such offer is not authorised or to any person to whom it is unlawful
to make such an offer. The Stapled Securities have not been and will not be registered under
the United States Securities Act of 1933, as amended (the US Securities Act) and, may not
be offered or sold within the United States (as defined in Regulation S under the US
Securities Act (Regulation S)) except, pursuant to an exemption from or in a transaction
subject to, the registration requirements of the US Securities Act and applicable state
securities laws. The Stapled Securities are being offered and sold outside the United States
(including to institutional and other investors in Singapore) in reliance on Regulation S. There
will be no public offer of Stapled Securities in the United States. Any failure to comply with
this restriction may constitute a violation of securities laws in the United States and in other
jurisdictions.
The Managers reserve the right to reject any application for Stapled Securities where
the Managers believe or have reason to believe that such applications may violate the
securities laws or any applicable legal or regulatory requirements of any jurisdiction.
No person in any jurisdiction outside Singapore receiving this Prospectus or its
accompanying documents (including the Application Form) may treat the same as an offer or
invitation to subscribe for any Stapled Securities unless such an offer or invitation could
lawfully be made without compliance with any regulatory or legal requirements in those
jurisdictions.
G-3
(14) The Managers reserve the right to reject any application which does not conform strictly to
the instructions or with the terms and conditions set out in this Prospectus (including the
instructions set out in the accompanying Application Forms, in the ATMs, the IB websites of
the relevant Participating Banks and the mobile banking interface of the relevant
Participating Banks) or, in the case of an application by way of an Application Form, the
contents of which is illegible, incomplete, incorrectly completed or which is accompanied by
an improperly drawn up or improper form of remittance.
(15) The Managers further reserve the right to treat as valid any applications not completed or
submitted or effected in all respects in accordance with the instructions and terms and
conditions set out in this Prospectus (including the instructions set out in the accompanying
Application Forms and in the ATMs, the IB websites of the relevant Participating Banks and
the mobile banking interface of the relevant Participating Banks), and also to present for
payment or other processes all remittances at any time after receipt and to have full access
to all information relating to, or deriving from, such remittances or the processing thereof.
Without prejudice to the rights of the Managers, and the Joint Bookrunners, as agent of the
Managers, have been authorised to accept, for and on behalf of the Managers, such other
forms of application as the Joint Bookrunners may, in consultation with the Managers, deem
appropriate.
(16) The Managers reserve the right to reject or to accept, in whole or in part, or to scale down
or to ballot, any application, without assigning any reason therefor, and none of the
Managers and the Joint Bookrunners will entertain any enquiry and/or correspondence on
the decision of the Managers. This right applies to applications made by way of Application
Forms and by way of Electronic Applications and by such other forms of application as the
Joint Bookrunners may, in consultation with the Managers, deem appropriate. In deciding the
basis of allocation, the Managers, in consultation with the Joint Bookrunners, will give due
consideration to the desirability of allocating the Stapled Securities to a reasonable number
of applicants with a view to establishing an adequate market for the Stapled Securities.
(17) In the event that the Managers lodge a supplementary or replacement prospectus (Relevant
Document) pursuant to the Securities and Futures Act or any applicable legislation in force
from time to time prior to the close of the Offering, and the Stapled Securities have not been
issued, the Managers will (as required by law) at their sole and absolute discretion either:
(a) within two days (excluding any Saturday, Sunday or public holiday) from the date of the
lodgement of the Relevant Document, give you notice in writing of how to obtain, or
arrange to receive, a copy of the same and provide you with an option to withdraw your
application and take all reasonable steps to make available within a reasonable period
the Relevant Document to you if you have indicated that you wish to obtain, or have
arranged to receive, a copy of the Relevant Document; or
(b) within seven days of the lodgement of the Relevant Document, give you a copy of the
Relevant Document and provide you with an option to withdraw your application; or
(c) deem your application as withdrawn and cancelled and refund your application monies
(without interest or any share of revenue or other benefit arising therefrom) to you within
seven days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 17(a) and (b) above
to withdraw his application shall, within 14 days from the date of lodgement of the
Relevant Document, notify us whereupon the Managers shall, within seven days from
the receipt of such notification, return all monies in respect of such application (without
interest or any share of revenue or other benefit arising therefrom).
G-4
In the event that the Stapled Securities have already been issued at the time of the
lodgement of the Relevant Document but trading has not commenced, the Managers
will (as required by law) either:
(i) within two days (excluding any Saturday, Sunday or public holiday) from the date
of the lodgement of the Relevant Document, give you notice in writing of how to
obtain, or arrange to receive, a copy of the same and provide you with an option
to return to the Managers the Stapled Securities which you do not wish to retain
title in and take all reasonable steps to make available within a reasonable period
the Relevant Document to you if you have indicated that you wish to obtain, or
have arranged to receive, a copy of the Relevant Document; or
(ii) within seven days from the lodgement of the Relevant Document, give you a copy
of the Relevant Document and provide you with an option to return the Stapled
Securities which you do not wish to retain title in; or
(iii) deem the issue as void and refund your payment for the Stapled Securities
(without interest or any share of revenue or other benefit arising therefrom) within
seven days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 17(c)(i) and (ii) above to
return the Stapled Securities issued to him shall, within 14 days from the date of lodgment
of the Relevant Document, notify us of this and return all documents, if any, purporting to be
evidence of title of those Stapled Securities, whereupon the Managers shall, within seven
days from the receipt of such notification and documents, pay to him all monies paid by him
for the Stapled Securities without interest or any share of revenue or other benefit arising
therefrom and at his own risk, and the Stapled Securities issued to him shall be deemed to
be void.
Additional terms and instructions applicable upon the lodgement of the Relevant Document,
including instructions on how you can exercise the option to withdraw, may be found in such
Relevant Document.
(18) The Stapled Securities may be reallocated between the Placement Tranche and the Public
Offer for any reason, including in the event of excess applications in one and a deficit of
applications in the other at the discretion of the Joint Bookrunners, in consultation with the
Managers.
There will not be any physical security certificates representing the Stapled Securities. It is
expected that CDP will send to you, at your own risk, within 15 Market Days after the close
of the Offering, and subject to the submission of valid applications and payment for the
Stapled Securities, a statement of account stating that your Securities Account has been
credited with the number of Stapled Securities allocated to you. This will be the only
acknowledgement of application monies received and is not an acknowledgement by the
Managers. You irrevocably authorise CDP to complete and sign on your behalf as transferee
or renouncee any instrument of transfer and/or other documents required for the issue or
transfer of the Stapled Securities allocated to you. This authorisation applies to applications
made both by way of Application Forms and by way of Electronic Applications.
(19) You irrevocably authorise CDP to disclose the outcome of your application, including the
number of Stapled Securities allocated to you pursuant to your application, to the Managers,
the Joint Bookrunners, the Participating Banks and any other parties so authorised by CDP,
the Managers and/or the Joint Bookrunners.
G-5
(20) Any reference to you or the Applicant in this section shall include an individual, a
corporation, an approved nominee company and trustee applying for the Stapled Securities
by way of an Application Form or by way of Electronic Application or by such other manner
as the Joint Bookrunners may, in their absolute discretion, or in consultation with the
Managers, deem appropriate.
(21) By completing and delivering an Application Form and, in the case of an ATM Electronic
Application, by pressing the Enter or OK or Confirm or Yes key or any other relevant
key on the ATM or, in the case of an Internet Electronic Application or mBanking Application,
by clicking Submit or Continue or Yes or Confirm or any other button on the IB website
screen or the mobile banking interface in accordance with the provisions herein, you:
(a) irrevocably agree and undertake to subscribe for the number of Stapled Securities
specified in your application (or such smaller number for which the application is
accepted) at the Offering Price for each Stapled Security and agree that you will accept
such number of Stapled Securities as may be allocated to you, in each case on the
terms of, and subject to the conditions set out in, this Prospectus and its accompanying
Application Forms and the Stapling Deed, the FH-REIT Trust Deed and the FH-BT Trust
Deed;
(b) agree that, in the event of any inconsistency between the terms and conditions for
application set out in this Prospectus and its accompanying documents (including the
Application Forms) and those set out in the IB websites or ATMs or the mobile banking
interface of the Participating Banks, the terms and conditions set out in this Prospectus
and its accompanying Application Forms shall prevail;
(c) in the case of an application by way of a Public Offer Stapled Securities Application
Form or an Electronic Application, agree that the Offering Price for the Public Offer
Stapled Securities applied for is due and payable to the Managers upon application;
(d) in the case of an application by way of a Placement Stapled Securities Application Form
or such other forms of application as the Joint Bookrunners may in their absolute
discretion deem appropriate, agree that the Offering Price for the Placement Stapled
Securities applied for is due and payable to the Managers upon application;
(e) warrant the truth and accuracy of the information contained, and representations and
declarations made, in your application, and acknowledge and agree that such
information, representations and declarations will be relied on by the Managers in
determining whether to accept your application and/or whether to allocate any Stapled
Securities to you; and
(f) agree and warrant that, if the laws of any jurisdictions outside Singapore are applicable
to your application, you have complied with all such laws and none of the Managers nor
any of the Joint Bookrunners will infringe any such laws as a result of the acceptance
of your application.
G-6
(22) Acceptance of applications will be conditional upon, inter alia, the Managers being satisfied
that:
(a) permission has been granted by the SGX-ST to deal in and for the quotation of (i) all
Stapled Securities comprised in the Offering, (ii) the Sponsor Stapled Securities, (iii) the
TCC Stapled Securities, (iv) the Cornerstone Stapled Securities and (v) all the Stapled
Securities which may be issued to the REIT Manager or the Trustee-Manager from time
to time in full or in part payment of fees payable to the REIT Manager or the
Trustee-Manager and (vi) all the Stapled Securities which may be issued to the
Serviced Residence Operators from time to time in full or in part payment of fees
payable to the Serviced Residence Operators;
(b) the Underwriting Agreement, referred to in the section on Plan of Distribution in this
Prospectus, has become unconditional and has not been terminated; and
(c) the Authority has not served a stop order which directs that no or no further Stapled
Securities to which this Prospectus relates be allotted or issued (Stop Order).
(23) In the event that a Stop Order in respect of the Stapled Securities is served by the Authority
or other competent authority, and:
(a) the Stapled Securities have not been issued (as required by law), all applications shall
be deemed to be withdrawn and cancelled and the Managers shall refund the
application monies (without interest or any share of revenue or other benefit arising
therefrom) to you within 14 days of the date of the Stop Order; or
(b) if the Stapled Securities have already been issued but trading has not commenced, the
issue will (as required by law) be deemed void and the Managers shall refund your
payment for the Stapled Securities (without interest or any share of revenue or other
benefit arising therefrom) to you within 14 days from the date of the Stop Order.
This shall not apply where only an interim Stop Order has been served.
(24) In the event that an interim Stop Order in respect of the Stapled Securities is served by the
Authority or other competent authority, no Stapled Securities shall be issued to you until the
Authority revokes the interim Stop Order. The Authority is not able to serve a Stop Order in
respect of the Stapled Securities if the Stapled Securities have been issued and listed on
SGX-ST and trading in them has commenced.
(25) Additional terms and conditions for applications by way of Application Forms are set out in
the section below entitled Additional Terms and Conditions for Applications for Offer Stapled
Securities using Printed Application Forms on pages G-8 to G-10 of this Prospectus.
(26) Additional terms and conditions for applications by way of Electronic Applications are set out
in the section below entitled Additional Terms and Conditions for Electronic Applications on
pages G-12 to G-18 of this Prospectus.
(27) All payments in respect of any application for Public Offer Stapled Securities, and all refunds
where (a) an application is rejected or accepted in part only, or (b) the Offering does not
proceed for any reason, shall be made in Singapore dollars.
(28) All payments in respect of any application for Placement Stapled Securities, and all refunds
where (a) an application is rejected or accepted in part only, or (b) the Offering does not
proceed for any reason, shall be made in Singapore dollars.
G-7
(29) All payments in respect of any application for Reserved Stapled Securities, and all refunds
where (a) an application is rejected or accepted in part only, or (b) the Offering does not
proceed for any reason, shall be made in Singapore dollars.
(30) No application will be held in reserve.
(31) This Prospectus is dated 30 June 2014. No Stapled Securities shall be allotted or allocated
on the basis of this Prospectus later than 12 months after the date of this Prospectus.
Additional Terms and Conditions for Applications for Offer Stapled Securities using Printed
Application Forms
Applications by way of an Application Form shall be made on, and subject to the terms and
conditions of this Prospectus, including but not limited to the terms and conditions set out below,
as well as those set out under the section entitled Terms, Conditions and Procedures for
Application for and Acceptance of the Stapled Securities in Singapore on pages G-1 to G-23 of
this Prospectus and the Stapling Deed, the FH-REIT Trust Deed and the FH-BT Trust Deed.
(1) Applications for the Public Offer Stapled Securities must be made using the printed WHITE
Public Offer Stapled Securities Application Forms and printed WHITE official envelopes A
and B, accompanying and forming part of this Prospectus.
Applications for the Placement Stapled Securities, other than the Reserved Stapled
Securities, must be made using the printed BLUE Placement Stapled Securities Application
Forms (or in such manner as the Joint Bookrunners may in their absolute discretion, or in
consultation with the Managers, deem appropriate), accompanying and forming part of this
Prospectus.
Application for the Reserved Stapled Securities must be made using the printed PINK
Reserved Stapled Securities application Forms, accompany and forming part of this
Prospectus.
Without prejudice to the rights of the Managers and the Joint Bookrunners, as agents of the
Managers, have been authorised to accept, for and on behalf of the Managers, such other
forms of application, as the Joint Bookrunners may (in consultation with the Managers) deem
appropriate.
Your attention is drawn to the detailed instructions contained in the Application Forms and
this Prospectus for the completion of the Application Forms, which must be carefully
followed. The Managers reserve the right to reject applications which do not conform
strictly to the instructions set out in the Application Forms and this Prospectus (or, in
the case of applications for the Placement Stapled Securities, followed) which are
illegible, incomplete, incorrectly completed or which are accompanied by improperly
drawn remittances or improper form of remittances.
(2) You must complete your Application Forms in English. Please type or write clearly in ink
using BLOCK LETTERS.
(3) You must complete all spaces in your Application Forms except those under the heading
FOR OFFICIAL USE ONLY and you must write the words NOT APPLICABLE or N.A.
in any space that is not applicable.
(4) Individuals, corporations, approved nominee companies and trustees must give their names
in full. If you are an individual, you must make your application using your full name as it
appears on your NRIC (if you have such an identification document) or in your passport and,
G-8
in the case of a corporation, in your full name as registered with a competent authority. If you
are not an individual, you must complete the Application Form under the hand of an official
who must state the name and capacity in which he signs the Application Form. If you are a
corporation completing the Application Form, you are required to affix your common seal (if
any) in accordance with your Memorandum and Articles of Association or equivalent
constitutive documents of the corporation. If you are a corporate applicant and your
application is successful, a copy of your Memorandum and Articles of Association or
equivalent constitutive documents must be lodged with FHTs Stapled Security Registrar.
The Managers reserve the right to require you to produce documentary proof of identification
for verification purposes.
(5) (a) You must complete Sections A and B and sign page 1 of the Application Form.
(b) You are required to delete either paragraph 7(c) or 7(d) on page 1 of the Application
Form. Where paragraph 7(c) is deleted, you must also complete Section C of the
Application Form with particulars of the beneficial owner(s).
(c) If you fail to make the required declaration in paragraph 7(c) or 7(d), as the case may
be, on page 1 of the Application Form, your application is liable to be rejected.
(6) You (whether an individual or corporate applicant, whether incorporated or unincorporated
and wherever incorporated or constituted) will be required to declare whether you are a
citizen or permanent resident of Singapore or a corporation in which citizens or permanent
residents of Singapore or any body corporate constituted under any statute of Singapore
have an interest in the aggregate of more than 50 per cent. of the issued share capital of or
interests in such corporation. If you are an approved nominee company, you are required to
declare whether the beneficial owner of the Stapled Securities is a citizen or permanent
resident of Singapore or a corporation, whether incorporated or unincorporated and
wherever incorporated or constituted, in which citizens or permanent residents of Singapore
or any body corporate incorporated or constituted under any statute of Singapore have an
interest in the aggregate of more than 50 per cent. of the issued share capital of or interests
in such corporation.
(7) You may apply and make payment for your application for the Stapled Securities in
Singapore currency in cash only.
Each application must be accompanied by a cash remittance in Singapore currency for the
full amount payable in Singapore dollars of the Offering Price of $0.88, in respect of the
number of Stapled Securities applied for, in the form of a BANKERS DRAFT or CASHIERS
ORDER drawn on a bank in Singapore, made out in favour of FHT UNIT ISSUE ACCOUNT
crossed A/C PAYEE ONLY with your name, CDP Securities Account number and address
written clearly on the reverse side. Applications not accompanied by any payment or
accompanied by any other form of payment will not be accepted. No combined Bankers Draft
or Cashiers Order for different CDP Securities Accounts shall be accepted. Remittances
bearing NOT TRANSFERABLE or NON-TRANSFERABLE crossings will be rejected.
No acknowledgement of receipt will be issued for applications and application monies
received.
(8) Monies paid in respect of unsuccessful applications are expected to be returned (without
interest or any share of revenue or other benefit arising therefrom) to you by ordinary post,
in the event of oversubscription for the Stapled Securities, within 24 hours of the balloting (or
such shorter period as the SGX-ST may require), at your own risk. Where your application
is rejected or accepted or in part only, the full amount or the balance of the application
monies, as the case may be, will be refunded (without interest or any share of revenue or
G-9
other benefit arising therefrom) to you by ordinary post at your own risk within 14 Market
Days after the close of the Offering, PROVIDED THAT the remittance accompanying such
application which has been presented for payment or other processes has been honoured
and the application monies received in the designated Stapled Security issue account. If the
Offering does not proceed for any reason, the full amount of application monies (without
interest or any share of revenue or other benefit arising therefrom) will be returned to you
within three Market Days after the Offering is discontinued.
(9) Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
(10) By completing and delivering the Application Forms, you agree that:
(a) in consideration of the Managers having distributed the Application Form to you and by
completing and delivering the Application Form before the close of the Offering:
(i) your application is irrevocable;
(ii) your remittance will be honoured on first presentation and that any monies
returnable may be held pending clearance of your payment without interest or any
share of revenue or other benefit arising therefrom; and
(iii) you represent and agree that you are located outside the United States (within the
meaning of Regulation S);
(b) all applications, acceptances or contracts resulting therefrom under the Offering shall
be governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(c) in respect of the Stapled Securities for which your application has been received and
not rejected, acceptance of your application shall be constituted by written notification
by or on behalf of the Managers and not otherwise, notwithstanding any remittance
being presented for payment by or on behalf of the Managers;
(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
the Managers, the Sponsor, the Joint Bookrunners or any other person involved in the
Offering shall have any liability for any information not contained therein;
(f) for the purposes of facilitating your application, you consent to the collection, use and
disclosure by and on behalf of the Managers of your name, NRIC/passport number or
company registration number, address, nationality, permanent resident status, CDP
Securities Account number, and Stapled Security application amount and application
details to the Stapled Security Registrar, CDP, Securities Clearing Computer Services
(Pte) Ltd (SCCS), SGX-ST, the Managers, the REIT Trustee and the Joint
Bookrunners (the Relevant Parties); and
(g) you irrevocably agree and undertake to purchase the number of Stapled Securities
applied for as stated in the Application Form or any smaller number of such Stapled
Securities that may be allocated to you in respect of your application. In the event that
the Managers decide to allocate any smaller number of Stapled Securities or not to
allocate any Stapled Securities to you, you agree to accept such decision as final.
G-10
Procedures Relating to Applications for the Public Offer Stapled Securities by Way of
Printed Application Forms
(1) Your application for the Public Offer Stapled Securities by way of printed Application Forms
must be made using the WHITE Public Offer Stapled Securities Application Forms and
WHITE official envelopes A and B.
(2) You must:
(a) enclose the WHITE Public Offer Stapled Securities Application Form, duly completed
and signed, together with correct remittance for the full amount payable at the Offering
Price in Singapore currency in accordance with the terms and conditions of this
Prospectus and its accompanying documents, in the WHITE official envelope A
provided;
(b) in appropriate spaces on the WHITE official envelope A:
(i) write your name and address;
(ii) state the number of Public Offer Stapled Securities applied for; and
(iii) tick the relevant box to indicate form of payment;
(c) SEAL THE WHITE OFFICIAL ENVELOPE A;
(d) write, in the special box provided on the larger WHITE official envelope B addressed
to Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01
Singapore Land Tower, Singapore 048623, the number of Public Offer Stapled
Securities you have applied for;
(e) insert the WHITE official envelope A into the WHITE official envelope B and seal the
WHITE OFFICIAL ENVELOPE B; and
(f) affix adequate Singapore postage on the WHITE official envelope B (if dispatching by
ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
HAND the documents at your own risk to Boardroom Corporate & Advisory Services
Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, so as to
arrive by 12.00 p.m. on 10 July 2014 or such other date(s) and time(s) as the Managers
may agree with the Joint Bookrunners. Courier services or Registered Post must
NOT be used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected. Except for application for the Placement Stapled Securities where
remittance is permitted to be submitted separately, applications for the Public Offer Stapled
Securities not accompanied by any payment or any other form of payment will not be
accepted.
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
G-11
Procedures Relating to Applications for the Placement Stapled Securities (other than the
Reserved Stapled Securities) by Way of Printed Application Forms
(1) Your application for the Placement Stapled Securities (other than the Reserved Stapled
Securities) by way of printed Application Forms must be made using the BLUE Placement
Stapled Securities Application Forms.
(2) The completed and signed BLUE Placement Stapled Securities Application Form and your
remittance, in accordance with the terms and conditions of this Prospectus, for the full
amount payable at the Offering Price, as the case may be, for each Stapled Security in
respect of the number of Placement Stapled Securities applied for, with your name,
Securities Account number and address clearly written on the reverse side, must be enclosed
and sealed in an envelope to be provided by you. Your application for Placement Stapled
Securities must be delivered to Boardroom Corporate & Advisory Services Pte. Ltd., 50
Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, to arrive by 12.00 p.m. on
10 July 2014 or such other date(s) and time(s) as the Managers may agree with the Joint
Bookrunners. Courier services or Registered Post must NOT be used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected.
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Procedures Relating to Applications for the Reserved Stapled Securities by Way of Printed
Application Forms
(1) Your application for the Reserved Stapled Securities by way of printed Application Forms
must be made using the PINK Reserved Stapled Securities Application Forms.
(2) The completed and signed PINK Reserved Stapled Securities Application Form and your
remittance, in accordance with the terms and conditions of this Prospectus, in Singapore
currency for the full amount payable at the Offering Price for each Stapled Security in respect
of the number of Reserved Stapled Securities applied for, with your name, Securities Account
number and address clearly written on the reverse side, must be enclosed and sealed in an
envelope to be provided by you. Your application for the Reserved Stapled Securities must
be delivered to Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01
Singapore Land Tower, Singapore 048623, to arrive by 12.00 p.m. on 10 July 2014 or such
other date(s) and time(s) as the Managers may agree with the Joint Bookrunners.
(3) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Additional Terms and Conditions for Electronic Applications
Electronic Applications shall be made on and subject to the terms and conditions of this
Prospectus, including but not limited to the terms and conditions set out below and those under
the section Terms, Conditions and Procedures for Application for and Acceptance of the Stapled
Securities in Singapore on pages G-1 to G-23 of this Prospectus, as well as the Stapling Deed,
the FH-REIT Trust Deed and the FH-BT Trust Deed.
(1) The procedures for Electronic Applications are set out on the ATM screens of the relevant
Participating Banks (in the case of ATM Electronic Applications), the IB website screens of
the relevant Participating Banks (in the case of Internet Electronic Applications) and the
G-12
mobile banking interface of the relevant Participating Banks (in the case of mBanking
Applications). Currently, DBS is the only Participating Bank through which mBanking
Applications may be made.
(2) For illustration purposes, the procedures for Electronic Applications for Public Offer Stapled
Securities through ATMs, the IB website of DBS and the mobile banking interface of DBS
(together the Steps) are set out in pages G-18 to G-23 of this Prospectus. The Steps set
out the actions that you must take at ATMs, the IB website of DBS or the mobile banking
interface of DBS to complete an Electronic Application. The actions that you must take at the
ATMs or the IB websites of the other Participating Banks are set out on the ATM screens or
the IB website screens of the respective Participating Banks.
Please read carefully the terms and conditions of this Prospectus and its accompanying
documents (including the Application Forms), the Steps and the terms and conditions for
Electronic Applications set out below before making an Electronic Application.
(3) Any reference to you or the Applicant in these Additional Terms and Conditions for
Electronic Applications and the Steps shall refer to you making an application for Public Offer
Stapled Securities through an ATM of one of the relevant Participating Banks or the IB
website of a relevant Participating Bank or the mobile banking interface of DBS.
(4) If you are making an ATM Electronic Application:
(a) You must have an existing bank account with and be an ATM cardholder of one of the
Participating Banks. An ATM card issued by one Participating Bank cannot be used to
apply for Public Offer Stapled Securities at an ATM belonging to other Participating
Banks.
(b) You must ensure that you enter your own Securities Account number when using the
ATM card issued to you in your own name. If you fail to use your own ATM card or do
not key in your own Securities Account number, your application will be rejected. If you
operate a joint bank account with any of the Participating Banks, you must ensure that
you enter your own Securities Account number when using the ATM card issued to you
in your own name. Using your own Securities Account number with an ATM card which
is not issued to you in your own name will render your Electronic Application liable to
be rejected.
(c) Upon the completion of your ATM Electronic Application, you will receive an ATM
transaction slip (Transaction Record), confirming the details of your ATM Electronic
Application. The Transaction Record is for your retention and should not be submitted
with any printed Application Form.
(5) If you are making an Internet Electronic Application or a mBanking Application:
(a) You must have an existing bank account with, and a User Identification (User ID) as
well as a Personal Identification Number (PIN) given by, the relevant Participating
Bank.
(b) You must ensure that the mailing address of your account selected for the application
is in Singapore and you must declare that the application is being made in Singapore.
Otherwise, your application is liable to be rejected. In connection with this, you will be
asked to declare that you are in Singapore at the time you make the application.
G-13
(c) Upon the completion of your Internet Electronic Application through the IB website of
the relevant Participating Bank or the mobile banking interface of DBS Bank, there will
be an on-screen confirmation (Confirmation Screen) of the application which can be
printed out by you for your record. This printed record of the Confirmation Screen is for
your retention and should not be submitted with any printed Application Form.
(6) In connection with your Electronic Application for Public Offer Stapled Securities, you are
required to confirm statements to the following effect in the course of activating the Electronic
Application:
(a) that you have received a copy of the Prospectus (in the case of ATM Electronic
Applications) and have read, understood and agreed to all the terms and conditions of
application for the Public Offer Stapled Securities and the Prospectus prior to effecting
the Electronic Application and agree to be bound by the same;
(b) for the purposes of facilitating your application, you consent to the collection, use and
disclosure of your name, NRIC/passport number, address, nationality, permanent
resident status, CDP Securities Account number and Public Offer Stapled Security
application amount (the Relevant Particulars) from your account with the relevant
Participating Bank to the Relevant Parties; and
(c) where you are applying for the Public Offer Stapled Securities, that this is your only
application for the Public Offer Stapled Securities and it is made in your name and at
your own risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction unless you press the Enter or OK or Confirm or Yes or any other relevant
key in the ATM or click Confirm or OK or Submit or Continue or Yes or any other
relevant button on the website screen or mobile banking interface. By doing so, you shall be
treated as signifying your confirmation of each of the three statements above. In respect of
statement 6(b) above, your confirmation, by pressing the Enter or OK or Confirm or
Yes or any other relevant key in the ATM or click Confirm or OK or Submit or Continue
or Yes or any other relevant button, shall signify and shall be treated as your written
permission, given in accordance with the relevant laws of Singapore, including Section 47(2)
of the Banking Act, Chapter 19 of Singapore, to the disclosure by that Participating Bank of
the Relevant Particulars of your account(s) with that Participating Bank to the Relevant
Parties.
(7) You must have sufficient funds in your bank account with your Participating Bank at the time
you make your ATM Electronic Application, Internet Electronic Application or mBanking
Application, failing which such Electronic Application will not be completed. Any ATM
Electronic Application, Internet Electronic Application or mBanking Application which does
not conform strictly to the instructions set out in this Prospectus or on the screens of the
ATMs, on the IB website of the relevant Participating Bank or the mobile banking interface
of DBS, as the case may be, through which your ATM Electronic Application, Internet
Electronic Application or mBanking Application is being made shall be rejected.
(8) You may apply and make payment for your application for the Public Offer Stapled Securities
in cash only.
You may apply for the Public Offer Stapled Securities through any ATM, the IB website of
your Participating Bank or the mobile banking interface of DBS (as the case may be) by
authorising your Participating Bank to deduct the full amount payable from your bank
account(s) with such Participating Bank.
G-14
(9) You irrevocably agree and undertake to subscribe for and to accept the number of Public
Offer Stapled Securities applied for as stated on the Transaction Record or the Confirmation
Screen or any lesser number of such Public Offer Stapled Securities that may be allocated
to you in respect of your Electronic Application. In the event that the Managers decide to
allocate any lesser number of such Public Offer Stapled Securities or not to allocate any
Public Offer Stapled Securities to you, you agree to accept such decision as final. If your
Electronic Application is successful, your confirmation (by your action of pressing the Enter
or OK or Confirm or Yes or any other relevant key in the ATM or click Confirm or OK
or Submit or Continue or Yes or any other relevant button on the Internet screen or the
mobile banking interface of DBS) of the number of Public Offer Stapled Securities applied for
shall signify and shall be treated as your acceptance of the number of Public Offer Stapled
Securities that may be allocated to you and your agreement to be bound by the Stapling
Deed, the FH-REIT Trust Deed and the FH-BT Trust Deed.
(10) The Managers will not keep any application in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application monies will be returned (without interest or
any share of revenue or other benefit arising therefrom) to you by being automatically
credited to your account with your Participating Bank, within 24 hours of the balloting (or
such shorter period as the SGX-ST may require) provided that the remittance in respect of
such application which has been presented for payment or other processes has been
honoured and the application monies received in the designated Stapled Security issue
account.
Where your Electronic Application is accepted or rejected in full or in part only, the balance
of the application monies, as the case may be, will be returned (without interest or any share
of revenue or other benefit arising therefrom) to you by being automatically credited to your
account with your Participating Bank, within 14 Market Days after the close of the Offering
provided that the remittance in respect of such application which has been presented for
payment or other processes has been honoured and the application monies received in the
designated Stapled Security issue account.
If the Offering does not proceed for any reason, the full amount of application monies
(without interest or any share of revenue or other benefit arising therefrom) will be returned
to you within three Market Days after the Offering is discontinued.
Responsibility for timely refund of application monies (whether from unsuccessful or partially
successful Electronic Applications or otherwise) lies solely with the respective Participating
Banks. Therefore, you are strongly advised to consult your Participating Bank as to the status
of your Electronic Application and/or the refund of any money to you from an unsuccessful
or partially successful Electronic Application, to determine the exact number of Public Offer
Stapled Securities, if any, allocated to you before trading the Stapled Securities on the
SGX-ST. None of the SGX-ST, CDP, SCCS, the Participating Banks, the Sponsor, the
Managers, the REIT Trustee, the Joint Bookrunners assume any responsibility for any loss
that may be incurred as a result of you having to cover any net sell positions or from buy-in
procedures activated by the SGX-ST.
(11) If your Electronic Application is unsuccessful, no notification will be sent by the relevant
Participating Bank.
G-15
(12) Applicants who make ATM Electronic Applications through the ATMs of the following
Participating Banks may check the provisional results of their ATM Electronic Applications as
follows:
Bank Telephone Other Channels
Operating
Hours
Service
Expected
from
DBS 1800-339 6666
(for POSB
account
holders)
1800-222 2222
(for DBS
Account holder)
Internet Banking
www.dbs.com
(1)
24 hours a day Evening
of the
balloting
day
United
Overseas Bank
Limited and its
subsidiary, Far
Eastern Bank
Limited (UOB
Group)
1800-222 2121 ATM (Other
Transactions
IPO Enquiry)
www.uobgroup.com
(1), (2)
Phone Banking/
ATM: 24 hours
a day
Internet
Banking: 24
hours a day
Evening
of the
balloting
day
Oversea-
Chinese
Banking
Corporation
Limited
(OCBC)
1800 363 3333 Phone Banking/
ATM/Internet Banking
http://www.ocbc.com
(3)
24 hours a day Evening
of the
balloting
day
Notes:
(1) Applicants who have made Internet Electronic Applications through the IB websites of DBS Bank or mBanking
Applications through the mobile banking interface of DBS Bank may also check the results of their
applications through the same channels listed in the table above in relation to ATM Electronic Applications
made at the ATMs of DBS Bank.
(2) Applicants who have made Electronic Application through the ATMs or the IB website of the UOB Group may
check the results of their applications through UOB Personal Internet Banking, UOB ATMs or UOB Phone
Banking services.
(3) Applicants who have made Electronic Application through the ATMs of OCBC Bank may check the results of
their applications through OCBC Personal Internet Banking, OCBC ATMs or OCBC Phone Banking services.
(13) ATM Electronic Applications shall close at 12.00 p.m. on 10 July 2014 or such other date(s)
and time(s) as the Managers may agree with the Joint Bookrunners. All Internet Electronic
Applications and mBanking Applications must be received by 12.00 p.m. on 10 July 2014, or
such other date(s) and time(s) as the Managers may, in consultation with the Joint
Bookrunners, decide. Internet Electronic Applications and mBanking Applications are
deemed to be received when they enter the designated information system of the relevant
Participating Bank.
(14) You are deemed to have irrevocably requested and authorised the Managers to:
(a) register the Public Offer Stapled Securities allocated to you in the name of CDP for
deposit into your Securities Account;
(b) return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application monies, should your Electronic Application be rejected or if
G-16
the Offering does not proceed for any reason, by automatically crediting your bank
account with your Participating Bank, with the relevant amount within 24 hours after
balloting (or such shorter period as the SGX-ST may require), or within three Market
Days if the Offering does not proceed for any reason, after the close or discontinuation
(as the case may be) of the Offering, PROVIDED THAT the remittance in respect of
such application which has been presented for payment or such other processes has
been honoured and application monies received in the designated Stapled Security
issue account; and
(c) return or refund (without interest or any share of revenue or other benefit arising
therefrom) the balance of the application monies, should your Electronic Application be
rejected or accepted in part only, by automatically crediting your bank account with your
Participating Bank, at your risk, with the relevant amount within 14 Market Days after
the close of the Offering, PROVIDED THAT the remittance in respect of such application
which has been presented for payment or such other processes has been honoured and
application monies received in the designated Stapled Security issue account.
(15) You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdown, fires, acts of God
and other events beyond the control of the Participating Banks, the Managers, the REIT
Trustee and the Joint Bookrunners, and if, in any such event the Managers, the REIT Trustee
and the Joint Bookrunners, and/or the relevant Participating Bank do not receive your
Electronic Application, or any data relating to your Electronic Application or the tape or any
other devices containing such data is lost, corrupted or not otherwise accessible, whether
wholly or partially for whatever reason, you shall be deemed not to have made an Electronic
Application and you shall have no claim whatsoever against the Managers, the REIT Trustee,
the Joint Bookrunners and/or the relevant Participating Bank for any Public Offer Stapled
Securities or Placement Stapled Securities, as the case may be, applied for or for any
compensation, loss or damage.
(16) The existence of a trust will not be recognised. Any Electronic Application by a trustee must
be made in his own name and without qualification. The Managers shall reject any
application by any person acting as nominee (other than approved nominee companies).
(17) All your particulars in the records of your Participating Bank at the time you make your
Electronic Application shall be deemed to be true and correct and your Participating Bank
and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been
any change in your particulars after making your Electronic Application, you must promptly
notify your Participating Bank.
(18) You should ensure that your personal particulars as recorded by both CDP and the relevant
Participating Bank are correct and identical, otherwise, your Electronic Application is liable
to be rejected. You should promptly inform CDP of any change in address, failing which the
notification letter on successful allocation will be sent to your address last registered with
CDP.
(19) By making and completing an Electronic Application, you are deemed to have agreed that:
(a) in consideration of the Managers making available the Electronic Application facility,
through the Participating Banks acting as agents of the Managers, at the ATMs, the IB
websites of the relevant Participating Banks and the mobile banking interface of DBS:
(i) your Electronic Application is irrevocable;
G-17
(ii) your Electronic Application, the acceptance by the Managers and the contract
resulting therefrom under the Public Offer shall be governed by and construed in
accordance with the laws of Singapore and you irrevocably submit to the
non-exclusive jurisdiction of the Singapore courts; and
(iii) you represent and agree that you are not located in the United States (within the
meaning of Regulations S);
(b) none of CDP, the Managers, the REIT Trustee, the Sponsor, the Joint Bookrunners and
the Participating Banks shall be liable for any delays, failures or inaccuracies in the
recording, storage or in the transmission or delivery of data relating to your Electronic
Application to the Managers, the REIT Trustee, CDP or the SGX-ST due to breakdowns
or failure of transmission, delivery or communication facilities or any risks referred to in
paragraph 15 above or to any cause beyond their respective controls;
(c) in respect of the Public Offer Stapled Securities for which your Electronic Application
has been successfully completed and not rejected, acceptance of your Electronic
Application shall be constituted by written notification by or on behalf of the Managers
and not otherwise, notwithstanding any payment received by or on behalf of the
Managers;
(d) you will not be entitled to exercise any remedy for rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
the Managers, the Trustee, the Sponsor, the Joint Bookrunners or any other person
involved in the Offering shall have any liability for any information not contained therein;
and
(f) you irrevocably agree and undertake to subscribe for the number of Public Offer Stapled
Securities applied for as stated in your Electronic Application or any smaller number of
such Public Offer Stapled Securities that may be allocated to you in respect of your
Electronic Application. In the event the Managers decide to allocate any smaller number
of such Public Offer Stapled Securities or not to allocate any Public Offer Stapled
Securities to you, you agree to accept such decision as final.
Steps for ATM Electronic Applications for Public Offer Stapled Securities through ATMs of
DBS (including POSB ATMs)
Instructions for ATM Electronic Applications will appear on the ATM screens of the respective
Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application
through a DBS or POSB ATM are shown below. Certain words appearing on the screen are in
abbreviated form (A/C, amt, appln, &,I/C, No., SGX and Max refer to Account,
amount, application, and, NRIC, Number, SGX-ST and Maximum, respectively).
Instructions for ATM Electronic Applications on the ATM screens of Participating Banks (other than
DBS (including POSB)), may differ slightly from those represented below.
Step 1 : Insert your personal DBS or POSB ATM card.
2 : Enter your Personal Identification Number.
3 : Select MORE SERVICES.
4 : Select language (for customers using multi-language card).
G-18
5 : Select ESA-IPO SHARE/INVESTMENTS.
6 : Select ELECTRONIC SECURITY APPLN (IPOS/BOND/ST-NOTES/SECURITIES).
7 : Read and understand the following statements which will appear on the screen:
THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE
IN, OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT
OR PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT) WHICH CAN BE OBTAINED FROM ANY DBS/POSB
BRANCH IN SINGAPORE AND, WHERE APPLICABLE THE VARIOUS
PARTICIPATING BANKS DURING HOURS, SUBJECT TO AVAILABILITY.
(IN THE CASE OF SECURITIES OFFERING THAT IS SUBJECT TO A
PROSPECTUS/OFFER INFORMATION/DOCUMENT REGISTERED WITH
THE MONETARY AUTHORITY OF SINGAPORE) ANYONE WISHING TO
ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES) SHOULD
READ THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING
HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET
OUT IN THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY OF THE
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF
APPLICABLE, A COPY OF THE REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEEN
LODGED WITH AND REGISTERED BY THE MONETARY AUTHORITY OF
SINGAPORE WHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR
CONTENTS.
(IN THE CASE OF A SECURITIES OFFERING THAT DOES NOT REQUIRE
A PROSPECTUS TO BE REGISTERED WITH THE MONETARY AUTHORITY
OF SINGAPORE) THE OFFER OF SECURITIES (OR UNITS OF
SECURITIES) MAY BE MADE IN A NOTICE PUBLISHED IN A NEWSPAPER
AND/OR A CIRCULAR/DOCUMENT DISTRIBUTED TO SECURITY
HOLDERS. ANYONE WISHING TO ACQUIRE SUCH SECURITIES (OR
UNITS OF SECURITIES) SHOULD READ THE
NOTICE/CIRCULAR/DOCUMENTS BEFORE SUBMITTING HIS
APPLICATION, WHICH WILL NEED TO BE MADE IN THE MANNER SET
OUT IN THE NOTICE/CIRCULAR/DOCUMENT.
PRESS THE ENTER KEY TO CONFIRM THAT YOU HAVE READ AND
UNDERSTOOD.
8 : Select FHT to display details
9 : Press the ENTER key to acknowledge:
YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE
APPLICATION AND (WHERE APPLICABLE) THE PROSPECTUS, OFFER
INFORMATION STATEMENT, DOCUMENT, PROFILE STATEMENT,
REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT/PROFILE STATEMENT NOTICE AND/OR
CIRCULAR.
G-19
FOR THE PURPOSE OF FACILITATING YOUR APPLICATION, YOU
CONSENT TO THE BANK COLLECTING, USING AND DISCLOSING YOUR
NAME, NRIC/PASSPORT NO., ADDRESS, NATIONALITY, CDP
SECURITIES A/C NO. AND SECUIRTY APPLN AMOUNT FROM YOUR
BANK A/C(S) TO REGISTRARS OF SECURITIES, SGX, SCCS, CDP AND
THE ISSUER/VENDOR(S).
FOR FIXED AND MAX PRICE SECURITIES APPLICATION, THIS IS YOUR
ONLY APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR
OWN RISK.
THE MAXIMUM PRICE FOR EACH SECURITY IS PAYABLE IN FULL ON
APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS
LOWER.
FOR TENDER SECURITIES APPLICATION, THIS IS YOUR ONLY
APPLICATION AT THE SELECTED TENDER PRICE AND IT IS MADE IN
YOUR OWN NAME AND AT YOUR OWN RISK.
YOU ARE NOT A US PERSON AS REFERRED TO IN (WHERE
APPLICABLE) THE PROSPECTUS, OFFER INFORMATION STATEMENT,
DOCUMENT PROFILE STATEMENT, REPLACEMENT OR
SUPPLEMENTARY PROSPECTUS/DOCUMENT/PROFILE STATEMENT,
NOTICE AND/OR CIRCULAR.
THERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES
THAT YOU CAN APPLY FOR SUBJECT TO AVAILABILITY. YOU MAY BE
ALLOCATED A SMALLER NUMBER OF SECURITIES THAN YOU APPLIED
FOR OR (IN THE CASE OF AN EARLIER CLOSURE UPON FULL
SUBSCRIPTION) YOUR APPLICATION MAY BE REJECTED IF ALL THE
AVAILABLE SECURITIES HAVE BEEN FULLY ALLOCATED TO EARLIER
APPLICANTS.
10 : Select your nationality.
11 : Select the DBS Bank account (Autosave/Current/Savings/Saving Plus) or the
POSB account (Current/Savings) from which to debit your application monies.
12 : Enter the number of securities you wish to apply for using cash.
13 : Enter or confirm (if your CDP Securities Account number has already been stored
in DBSs records) your own 12-digit CDP Securities Account number (Note: This
step will be omitted automatically if your Securities Account Number has already
been stored in DBSs records).
14 : Check the details of your securities application, your CDP Securities Account
number, number of securities and application amount on the screen and press the
ENTER key to confirm your application.
15 : Remove the Transaction Record for your reference and retention only.
G-20
Steps for Internet Electronic Application for Public Offer Stapled Securities through the IB
Website of DBS
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS
IB website and shown below. Certain words appearing on the screen are in abbreviated from
(A/C, &, amt, I/C and No. refer to Account, and, Amount, NRIC and Number,
respectively).
Step 1 : Click on DBS website (www.dbs.com).
2 : Login to Internet banking.
3 : Enter your User ID and PIN.
4 : Enter your DBS iB Secure PIN.
5 : Select Electric Security Application (ESA).
6 : Click Yes to proceed and to warrant, inter alia, that you are currently in
Singapore, you have observed and complied with all applicable laws and
regulations and that your mailing address for DBS mailing address for DBS
Internet Banking is in Singapore and that you are not a U.S. person (as such term
is defined in Regulation S under the United States Securities Act of 1933,
amended).
7 : Select your country of residence and click I confirm.
8 : Click on FHT and click Submit.
9 : Click on I Confirm to confirm, inter alia:
You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
You consent to disclose your name, I/C or Passport No., address, nationality,
CDP Securities A/C No. and securities application amount from your
DBS/POSB Account(s) to registrars of securities, SGX, SCCS, CDP and
issuer/vendor(s).
You understand that the securities mentioned herein have not been and will
not be registered under the United States Securities Act of 1933 as amended
(the US Securities Act) or the securities laws of any state of the United
States and may not be offered or sold in the United States or to, or for the
account or benefit of any US person (as defined in Regulation S under the
US Securities Act) except pursuant to an exemption from or in a transaction
subject to, the registration requirements of the US Securities Act and
applicable state securities laws. There will be no public offer of the securities
mentioned herein in the United States. Any failure to comply with this
restriction may constitute a violation of the United States securities laws.
This application is made in your own name and at your own risk.
For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
G-21
For FOREIGN CURRENCY securities subject to the terms of the issue,
please note the following: the application monies will be debited from your
bank account in S$, based on the Banks prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Banks
prevailing board rates at the time of refund. The different prevailing board
rates at the time of application and the time of refund of application monies
may result in either a foreign exchange profit or loss or application monies
may be debited and refund credited in S$ at the same exchange rate.
For 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
10 : Fill in details for securities application and click Submit.
11 : Check the details of your securities application, your CDP Securities A/C No. and
click Confirm to confirm your application.
12 : Print the Confirmation Screen (optional) for your reference and retention only.
Steps for mBanking Applications for Public Offer Stapled Securities through the mBanking
interface of DBS
For illustrative purposes, the steps for making an mBanking Application are shown below. Certain
words appearing on the screen are in abbreviated from (A/C, &, amt, I/C, SGX and No.
refer to Account, and, Amount, NRIC, SGX-ST and Number, respectively).
Step 1 : Click on DBS Bank mBanking application using your User ID and PIN.
2 : Select Investment Services.
3 : Select Electronic Securities Application.
4 : Select Yes to proceed and to warrant, inter alia, that you are currently in
Singapore, you have observed and complied with all applicable laws and
regulations and that your mailing address for DBS Internet Banking is in Singapore
and that you are not a U.S. Person (as such term is defined in Regulation S under
the United States Securities Act of 1933 as amended).
5 : Select your country of residence.
6 : Select FHT.
7 : Select Yes to confirm, inter alia:
You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
For the purpose of facilitating your application, you consent to the bank
collecting, using and disclosing your name, I/C or Passport No., address,
nationality, CDP Securities A/C No. and securities application amount from
your DBS/POSB Account(s) to registrars of securities, SGX, SCCS, CDP and
issuer/vendor(s).
You are not a U.S. Person (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended).
G-22
You understand that the securities mentioned herein have not been and will
not be registered under the United States Securities Act of 1933 as amended
(the US Securities Act) or the securities laws of any state of the United
States and may not be offered or sold in the United States or to, or for the
account or benefit of any US person (as defined in Regulation S under the
US Securities Act) except pursuant to an exemption from or in a transaction
subject to, the registration requirements of the US Securities Act and
applicable state securities laws. There will be no public offer of the securities
mentioned herein in the United States. Any failure to comply with this
restriction may constitute a violation of the United States securities laws.
This application is made in your own name and at your own risk.
For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
FOR FOREIGN CURRENCY Securities, subject to the terms of the issue,
please note the following: the application monies will be debited from your
bank account in S$, based on the Banks prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Banks
prevailing board rates at the time of refund. The different prevailing board
rates at the time of application and the time of refund of application monies
may result in either a foreign exchange profit or loss or application monies
may be debited and refund credited in S$ at the same exchange rate.
FOR 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
8 : Fill in details for securities application and click Submit.
9 : Check the details of your securities application, your IC/Passport No. and select
Confirm to confirm your application.
10 : Where applicable, capture Confirmation Screen (optional) for your reference and
retention only.
G-23
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APPENDIX H
LIST OF PRESENT AND PAST PRINCIPAL DIRECTORSHIPS OF
DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGERS
The principal present directorships, other than those held in the Managers, and the principal past
directorships in the last five years of each of the directors and executive officers (named in
Management and Corporate Governance) of the Managers are as follows:
(A) Directors of the Managers
(1) Law Song Keng
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
IFS Capital Limited
ECICS Limited
Asia Capital Reinsurance Group Pte Ltd
ACR Capital Holdings Pte Ltd
Great Eastern Holdings Ltd
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
China Life Reinsurance Company
Inland Revenue Authority of Singapore
Singapore Deposit Insurance Corporation
Central Provident Board
Manulife (Singapore) Pte Ltd
(2) Mr Chua Phuay Hee
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Industrial Bank Co. Ltd.
Temasek Life Sciences Laboratory Ltd
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
Wilmar Australia Holdings Pty Limited
Wilmar Australia Pty Limited
WCL Holdings Limited
Wilmar Plantations Limited
Cosmos Shipping Ltd
Alicia Shipping Co Limited
Josovina Commodities Ltd
Mixbury Holdings Limited
Tradesound Investments Limited
Venus Bulk Shipping Limited
Novel Epoch Enterprises Inc.
PT Mekar Bumi Andalas
PT Petro Andalan Nusantara
Bravo Limited
Alfa Trading Limited
Equatorial Trading Limited
Equatorial Oils & Fats Trading Limited
ETL (Mauritius) Limited
H-1
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Wilmar Plantations (Mauritius) Limited
Wilmar Trading (Mauritius) Ltd
Wilmar Tani Investments (Mauritius) Limited
Pacific Rim Palm Oil Limited
Wilmar Investments (Mauritius) Limited
African Oil Palm Limited
ADM China Holdings Ltd
Myanmar Kuok Oils & Grains Limited
Yangon Oils & Grains Limited
Yihai (Heilongjiang) Seed Co., Ltd.
Wilmar (Shanghai) IT Services Co., Ltd.
Yihai Kerry (Beijing) Seed Science and
Technology Co., Ltd.
COFCO East Ocean Oils & Grains
Industries (Zhangjiagang) Co., Ltd.
Cheer Luck Investments Limited
Lassiter Limited
Alfa Edible Oils Pte Ltd
Wilmar Holdings Pte Ltd
Wilmar Trading Pte Ltd
Wilmar Fertilizer Indonesia Pte Ltd
Wilmar China Investments (Yihai) Pte Ltd
Wilmar Yihai Investments Pte Ltd
Wilmar China Investments Pte Ltd
Wilmar Fujian Investments Pte Ltd
Wilmar Great Ocean Investment Pte Ltd
Wilmar Golden Sea Investment Pte Ltd
Wilmar China Northeast Investments Pte Ltd
Wilmar-ADM China Investments Pte. Ltd.
Wilmar Resources Pte Ltd
Analisa Shipping Co Pte Ltd
Lisa Shipping Co Pte Ltd
Monalisa Shipping Co Pte Ltd
Sasa Shipping Co Pte. Ltd.
Gold River Pte Ltd
Acalpo Wilmar Pte Ltd
Wilmar-ADM Flour Investments Pte. Ltd.
Liliana Shipping Co Pte. Ltd.
NSL Wilmar Pte. Ltd.
Patricia Shipping Co Pte. Ltd.
Vinomax Trading Pte Ltd
Isabel Shipping Co Pte. Ltd.
Natalie Shipping Co Pte. Ltd.
Olivia Shipping Co Pte. Ltd.
Wilmar International Limited
Wilmar China New Investments Pte. Ltd.
H-2
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Felicia Shipping Co Pte. Ltd.
Wilmar Excel Pte. Ltd.
Kenspot International Pte Ltd
Wilmar Trading (China) Pte. Ltd.
Kuok Oils & Grains Trading Pte Ltd
Wilmar Air Pte. Ltd.
Victoria Shipping Co Pte. Ltd.
Sophia Shipping Co Pte. Ltd.
Wii Pte. Ltd.
Lydia Shipping Co Pte. Ltd.
Sabrina Shipping Co Pte. Ltd.
Wilmar Seed Investments Pte. Ltd.
Cleartech Research Pte. Ltd.
Carolina Shipping Co Pte. Ltd.
Celina Shipping Co Pte. Ltd.
Lyna Shipping Co Pte. Ltd.
Angelina Shipping Co Pte. Ltd.
Wilmar Africa Investments Pte. Ltd.
Elena Shipping Co Pte. Ltd.
Juliana Shipping Co Pte. Ltd.
Oriana Shipping Co Pte. Ltd.
Eugena Shipping Co Pte. Ltd.
Marianna Shipping Co Pte. Ltd.
Rayna Shipping Co Pte. Ltd.
Serena Shipping Co Pte. Ltd.
Valentina Shipping Co Pte. Ltd.
Adani Wilmar Pte. Ltd.
Adriana Shipping Co Pte. Ltd.
Gina Shipping Co Pte. Ltd.
Halona Shipping Co Pte. Ltd.
Nelina Shipping Co Pte. Ltd.
Wilmar Consultancy Services Pte. Ltd.
WCP Investments Pte Ltd
Edna Shipping Co Pte. Ltd.
Edwina Shipping Co Pte. Ltd.
Fiona Shipping Co Pte. Ltd.
Valene Shipping Co Pte. Ltd.
Clara Shipping Co Pte. Ltd.
Letitia Shipping Co Pte. Ltd.
Audrey Shipping Co Pte. Ltd.
Daisy Shipping Co Pte. Ltd.
Doris Shipping Co Pte. Ltd.
Mandy Shipping Co Pte. Ltd.
Bidco Uganda Limited
Oil Palm Uganda Limited
MWK Inc.
WONA Inc.
H-3
(3) Liew Choon Wei
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
N.A.
(4) Mr David Wong See Hong
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
BOCI-Pru Trustee
BOC Life Insurance
BOCHK Asset Management
Singapore Civil Service College
(5) Choe Peng Sum
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
FHT Australia Management Pty Ltd
FHT Australia Pte Ltd
FHT Malaysia Pte Ltd
FHT Japan Pte Ltd
FHT London 1 Ltd
FHT London 2 Ltd
FHT London 3 Ltd
FHT London 4 Ltd
FHT Scotland 1 Ltd
FHT Scotland 2 Ltd
FHT UK Pte Ltd
Frasers Hospitality ML Pte Ltd
Frasers Sydney ML Hotel Pty Ltd
Frasers Hospitality Dalian Holding Pte Ltd
Teycotel Gestio Hotels BCN, S.L
Teycotel BCN, S.L.
Frasers Hospitality Berlin Investments Ltd
Frasers Hospitality Investments Sydney
Pty Ltd
Ananke Holdings Pty Limited
Frasers Hospitality Group Pte. Ltd.
Frasers Hospitality Changi City Pte. Ltd
Council of Private Education
N.A.
H-4
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Crest Secondary School
FCL Hotel Trustee Pte. Ltd.
Frasers Hospitality Investments Melbourne
Pte. Ltd.
Frasers Hospitality Property Services
Pte. Ltd.
Frasers Hospitality Management Pte. Ltd.
Frasers Hospitality Investment Holding
(Philippines) Pte. Ltd.
Fraser Residence Orchard Pte. Ltd.
FCL (Fraser) Pte. Ltd.
Fraser Suites Jakarta Pte. Ltd.
Frasers Hospitality Pte. Ltd.
Beijing Fraser Suites Real Estate
Management Co., Ltd
Excellent Esteem Limited
Fairdace Limited
Fraser Place (Beijing) Property
Management Co. Ltd.
Frasers (St Giles Street, Edinburgh)
Limited
Frasers Brisbane Apartments Pty Limited
Frasers Brisbane Management Pty Limited
Frasers Hospitality (Hong Kong) Limited
Frasers Hospitality (Thailand) Ltd.
Frasers Hospitality (UK) Ltd
Frasers Hospitality Frankfurt Investments
Ltd.
Frasers Hospitality India Private Limited
Frasers Hospitality Investment B.V.
Frasers Hospitality Investments,
Inc. (Philippines)
Frasers Hospitality Japan Kabushiki Kaisha
Frasers Hospitality Management Co. Ltd.,
(Shanghai)
Frasers Hospitality Philippines, Inc.
Frasers Melbourne Apartments Pty Limited
Frasers Melbourne Management
Pty Limited
Frasers Perth Management Pty Limited
Frasers Perth Pty Limited
Frasers St Giles Street Management
Limited
Modena Hospitality Management
(Shanghai) Co. Ltd.
PT Frasers Hospitality Investments
Indonesia
Queensgate Garden (C.I.) Limited
39 QGG Management Limited
H-5
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
The Forbes Tower Condominium Unit 1001
Limited
The Forbes Tower Condominium Unit 1004
Limited
The Forbes Tower Condominium Unit 1005
Limited
The Forbes Tower Condominium Unit 1101
Limited
The Forbes Tower Condominium Unit 1104
Limited
The Forbes Tower Condominium Unit 1105
Limited
The Forbes Tower Condominium Unit 1201
Limited
The Forbes Tower Condominium Unit 1204
Limited
The Forbes Tower Condominium Unit 1205
Limited
The Forbes Tower Condominium Unit 1401
Limited
The Forbes Tower Condominium Unit 1404
Limited
The Forbes Tower Condominium Unit 1405
Limited
The Forbes Tower Condominium Unit 1501
Limited
The Forbes Tower Condominium Unit 1504
Limited
The Forbes Tower Condominium Unit 1505
Limited
The Forbes Tower Condominium Unit 1601
Limited
The Forbes Tower Condominium Unit 1604
Limited
The Forbes Tower Condominium Unit 1605
Limited
The Forbes Tower Condominium Unit 1701
Limited
The Forbes Tower Condominium Unit 1705
Limited
The Forbes Tower Condominium Unit 1801
Limited
The Forbes Tower Condominium Unit 1805
Limited
The Forbes Tower Condominium Unit 1901
Limited
The Forbes Tower Condominium Unit 1905
Limited
H-6
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
The Forbes Tower Condominium Unit 2001
Limited
The Forbes Tower Condominium Unit 2004
Limited
The Forbes Tower Condominium Unit 2005
Limited
The Forbes Tower Condominium Unit 2101
Limited
The Forbes Tower Condominium Unit 2104
Limited
The Forbes Tower Condominium Unit 2105
Limited
The Forbes Tower Condominium Unit 2201
Limited
The Forbes Tower Condominium Unit 2204
Limited
The Forbes Tower Condominium Unit 2205
Limited
The Forbes Tower Condominium Unit 2301
Limited
The Forbes Tower Condominium Unit 2304
Limited
The Forbes Tower Condominium Unit 2401
Limited
The Forbes Tower Condominium Unit 2404
Limited
The Forbes Tower Condominium Unit 2501
Limited
The Forbes Tower Condominium Unit 2504
Limited
The Forbes Tower Condominium Unit 2601
Limited
The Forbes Tower Condominium Unit 2604
Limited
The Forbes Tower Condominium Unit 2701
Limited
The Forbes Tower Condominium Unit 2704
Limited
The Forbes Tower Condominium Unit 2801
Limited
The Forbes Tower Condominium Unit 2804
Limited
The Forbes Tower Condominium Unit 2901
Limited
The Forbes Tower Condominium Unit 2904
Limited
The Forbes Tower Condominium Unit 2905
Limited
The Forbes Tower Condominium Unit 301
Limited
H-7
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
The Forbes Tower Condominium Unit 305
Limited
The Forbes Tower Condominium Unit 306
Limited
The Forbes Tower Condominium Unit 401
Limited
The Forbes Tower Condominium Unit 405
Limited
The Forbes Tower Condominium Unit 406
Limited
The Forbes Tower Condominium Unit 501
Limited
The Forbes Tower Condominium Unit 505
Limited
The Forbes Tower Condominium Unit 506
Limited
The Forbes Tower Condominium Unit 601
Limited
The Forbes Tower Condominium Unit 605
Limited
The Forbes Tower Condominium Unit 606
Limited
The Forbes Tower Condominium Unit 701
Limited
The Forbes Tower Condominium Unit 705
Limited
The Forbes Tower Condominium Unit 706
Limited
The Forbes Tower Condominium Unit 801
Limited
The Forbes Tower Condominium Unit 804
Limited
The Forbes Tower Condominium Unit 805
Limited
The Forbes Tower Condominium Unit 901
Limited
The Forbes Tower Condominium Unit 904
Limited
The Forbes Tower Condominium Unit 905
Limited
H-8
(6) Lim Ee Seng
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Ace Goal Limited
Anchor Developments Pte Ltd
Ascendas Frasers Pte. Ltd.
Beijing Sin Hua Yan Real Estate
Development Co., Ltd.
Blessing Sky Limited
Brampton Holdings Sdn. Bhd.
Chempaka Development Pte Ltd
Chengdu Sino-Singapore South West
Logistics Co., Limited
Easthouse Properties Pte. Ltd.
Emerald Hill Developments Pte. Ltd.
Extra Strength Limited
Fairdace Limited
FC Commercial Trustee Pte. Ltd.
FC Hotel Trustee Pte. Ltd.
FC North Gem Trustee Pte Ltd
FCL (China) Pte. Ltd.
FCL (Fraser) Pte. Ltd.
FCL Alexandra Point Pte. Ltd.
FCL Aquamarine Pte. Ltd.
FCL Amber Pte Ltd
FCL Asset Management Ltd.
FCL Assets Pte. Ltd.
FCL Boon Lay Pte. Ltd.
FCL Bridgepoint Pte. Ltd.
FCL Centrepoint Pte. Ltd.
FCL China Development Pte. Ltd.
FCL Choa Chu Kang Pte. Ltd.
FCL Clover Pte. Ltd.
FCL Compassvale Pte. Ltd.
FCL Court Pte. Ltd.
FCL Crystal Pte. Ltd.
FCL Emerald (1) Pte. Ltd.
FCL Emerald (2) Pte. Ltd.
FCL Enterprises Pte. Ltd.
FCL Estates Pte. Ltd.
FCL Homes Pte. Ltd.
FCL Imperial Pte Ltd
FCL Investments Pte. Ltd.
FCL Joo Chiat Place Pte. Ltd.
FCL Land Pte. Ltd.
FCL Lodge Pte. Ltd.
FCL Loft Pte. Ltd.
FCL Management Services Pte. Ltd.
FCL Peak Pte. Ltd.
FCL Place Pte. Ltd.
FCL Property Investments Pte. Ltd.
Frasers Centrepoint Limited
Hektar Asset Management Sdn Bhd
Frasers Property (China) Ltd
FCL REIT Management Ltd.
Frasers Centrepoint Developments
Pte. Ltd.
Frasers Centrepoint Ltd
Frasers Property (China) Limited
Hainan Jian Feng Tourism Development
Co., Ltd.
Hua Li Holdings Pte Ltd
Metro Charm Holdings Limited
Reaves Limited
Saigon Apartments Joint Venture Co.
Vision Century Limited
H-9
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
FCL Resort Pte. Ltd.
FCL Rise Pte. Ltd.
FCL Sophia Pte. Ltd.
FCL Tampines Court Pte. Ltd.
FCL Tampines Pte. Ltd.
FCL Topaz Pte. Ltd.
FCL Tower Pte. Ltd.
FCL Treasury Pte. Ltd.
FCL Trust Holdings (Commercial) Pte. Ltd.
FCL Trust Holdings Pte. Ltd.
FCL Ventures Pte. Ltd.
FCL View Pte. Ltd.
FCL Woodlands Pte. Ltd.
FCT MTN Pte. Ltd.
Forth Carriers Limited
Forward Plan Limited
Frasers (Australia) Pte. Ltd.
Frasers (NZ) Pte. Ltd.
Frasers (Thailand) Pte. Ltd.
Frasers (UK) Pte. Ltd.
Frasers Broadview Limited
Frasers Broadway Pty Ltd
Frasers Centrepoint Asset Management
(Commercial) Ltd.
Frasers Centrepoint Asset Management
(Malaysia) Pte. Ltd.
Frasers Centrepoint Asset Management
Ltd.
Frasers Centrepoint Developments Pte Ltd
Frasers Chandos Pty Ltd
Frasers City Quarter Pty Ltd
Frasers Hospitality Investment B.V.
Frasers Investments (UK) Limited
Frasers Killara Pty Ltd
Frasers Land Pte. Ltd.
Frasers Lorne Pty Ltd
Frasers Morton Pty Ltd
Frasers Papamoa Limited
Frasers Property (Europe) Holdings
Pte. Ltd.
Frasers Property (UK) Limited
Frasers Property Australia Pty Ltd
Frasers Property Developments Limited
Frasers Property Management (Shanghai)
Co., Ltd.
Frasers Property Management Australia
Pty Ltd.
Frasers Putney Pty Limited
Frasers Queens Pty Ltd
Frasers Town Hall Pty Ltd
H-10
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Frasers Town Hall Residences Operations
Pty Limited
Frasers Town Hall Residences Pty Ltd
Frasers Ventures Limited
Krungthep Land Public Company Limited
Lion (Singapore) Pte. Limited
Marine Parade View Pte Ltd
Me Linh Point Ltd
MLP Co Pte. Ltd.
Nasidon Investments Pte Ltd
North Gem Development Pte Ltd
Northspring Development Pte Ltd
Opal Star Pte. Ltd.
Orrick Investments Pte Limited
PT Frasers Hospitality Investments
Indonesia
Punggol Residences Pte. Ltd.
River Valley Apartments Pte Ltd
River Valley Properties Pte Ltd
River Valley Shopping Centre Pte Ltd
River Valley Tower Pte Ltd
Riverside Homes Development Co., Ltd.
Riverside Investments Pte Ltd
Riverside Property Pte. Ltd.
Riverside Walk Pte Ltd
SAJV Co Pte Ltd
Shanghai Frasers Management
Consultancy Co., Ltd.
Shanghai Hua Li Real Estate Dev. Co. Ltd
Shanghai Sian Jin Property Development
Co., Ltd.
Singapore Logistics Investments Pte. Ltd.
Singlong Property Development (Suzhou)
Co., Ltd.
Sinomax International Pte. Ltd.
Summit Park Limited
Superway Logistics Investments
(Hong Kong) Limited
Supreme Asia Investments Limited
Vacaron Company Sdn Bhd
Wimanis Sdn. Bhd.
Woodlands Complex Pte Ltd
Yishun Development Pte Ltd
Yishun Gold Pte. Ltd.
Yishun Land Pte Ltd
Yishun Property Pte Ltd
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
H-11
(7) Panote Sirivadhanabhakdi
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Frasers Centrepoint Limited
Kasem Subsiri Company Limited
TCC Sports and Recreation Company
Limited
Golden Land Property Development Public
Company Limited
SMJC Development Company Limited
Thip Kampangpetch Bio Energy Company
Limited
Thip Nakhonswan Bio Energy Company
Limited
Thip Sukhothai Bio Refinery Company
Limited
Thip Sukhothai Bio Energy Company
Limited
TCC Trade and Convention Center
Company Limited
Thip Sugar Kamphaengphet Company
Limited
TCC Exhibition and Convention Center
Company Limited
Thip Sugar Nakhonswan Company Limited
Thip Sugar Sukhothai Company Limited
The Suphanburi Sugar Industry Company
Limited
N.C.C. Exhibition Organizer Company
Limited
N.C.C. Image Company Limited
F and B International Company Limited
Golden Shower Development (PTC) Ltd.
Grand Willow Development (PTC) Ltd.
Tropical Almond Development (PTC) Ltd.
Yellowwood Development (PTC) Ltd.
Viewgrand Trust A
Viewgrand Trust B
Viewgrand Trust C
Viewgrand Trust D
Viewgrand Trust E
Viewgrand Trust F
Viewgrand Trust G
The Imperial Angkor Palace Hotel Co. Ltd.
Chiva-Som International Health Resorts
Company Limited
North Park Golf and Sports Club Company
Limited
North Park Real-estate Company Limited
Dason Venture Limited
Excellence Prosperity Ltd.
Fraser and Neave Limited
Asiatig House Co., Ltd.
Oishi Group Public Company Limited
N.C.C. Management and Development
Company Limited
Prideeprapa Company Limited
Bang-pa-in Paper Industry
Thip Sukhothai Bio Energy Company
Limited
TCC Property Development Company
Limited
TCC Real Estate Development Company
Limited
TCC Land Industrial and Logistics
Company Limited
TCC Land Development Company Limited
TCC World Company Limited
Cha-Am Resort Town Company Limited
Riverside Master Plan Company Limited
Sports and Recreation Management
Company Limited
Lan Chang Development Company Limited
TCC Hotel Group Company Limited
Eastern Industrial Estates (Rayong)
Southeast Group Company Limited
TCC Capital Land Company Limited
H-12
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Global-Link Investments Limited
Mojito Investing Inc.
Newood Assets Limited
Olivine Property Limited
Pacific Coast Assets Inc.
TCC Land International Limited
Viewgrand Development Ltd.
Best Spirits (China) Company Limited
Great Sonic Investments Limited
TCC Land International Ltd.
Total Rise Investments Limited
TCC Land International (Singapore)
Pte. Ltd.
Plaza Athenee Hotel Co. Ltd.
S.A.S Ctamad Company Limited
BCH Hotel Investment Pte. Ltd.
Excellence Prosperities TMK (SG)
Excellence Prosperities (SG)
Kobe TMK
Excellence Prosperities K.K.
K.K. Shinkobe Holding
Y.K. Toranomon Properties
Siam Food Products Public Company
Limited
International Beverage Holdings (China)
Limited
Nong Khai Country Golf Club Company
Limited
TCC Holding Company Limited
TCC Land Retail Company Limited
TCC Land Industrial and Logistics
Company Limited
Terragro Fertilizer Company Limited
Norm Company Limited
Thai Beverage Public Company Limited
Univentures Public Company Limited
Paksong Capital Company Limited
Adelfos Company Limited
Platheon Company Limited
Siriwana Company Limited
Cristalla Company Limited
T.C.C. International Limited
TCC Land Company Limited
Berli Jucker Public Company Limited
International Beverage Holdings Limited
InterBev (Singapore) Limited
Theparunothai Company Limited
Athimart Company Limited
S.S. Karnsura Company Limited
Beer Thip Brewery (1991) Company
Limited
H-13
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Sura Bangyikhan Company Limited
Kankwan Company Limited
Blairmhor Distillers Limited
Blairmhor Limited
International Beverage Holdings (UK)
Limited
TCC Technology Company Limited
SHS Worldwide Assets Limited
Wise Lord Venture Inc.
Frasers Hospitality Asset Management Pte
Ltd
Frasers Hospitality Trust Management Pte
Ltd
(B) Executive Officers of the Managers
(1) Eu Chin Fen
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
Fraser Hospitality (Hong Kong) Limited
Modena Hospitality Management
(Shanghai) Co. Ltd
FHT Australia Management Pty Ltd
FHT Australia Pte Ltd
FHT Malaysia Pte Ltd
FHT Japan Pte Ltd
FHT London 1 Ltd
FHT London 2 Ltd
FHT London 3 Ltd
FHT London 4 Ltd
FHT Scotland 1 Ltd
FHT Scotland 2 Ltd
FHT UK Pte Ltd
(2) Valerie Foo Meei Foon
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
N.A. N.A.
H-14
(C) Executive Officers of the REIT Manager
(1) Colin Low Hsien Yang
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
N.A. N.A.
(2) Tan Hwee Leng Agnes
Current Directorships Past Directorships (for a period of five
years preceding the Latest Practicable
Date)
N.A. Theink Pte. Ltd.
H-15
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APPENDIX I
AIFMD DISCLOSURES
Terms capitalised in this Appendix I shall bear the same meaning as given to them in the
Glossary of the Prospectus.
This Appendix I should be read by any prospective investor domiciled, or with a registered
office, in a member state of the European Economic Area (EEA).
The Managers are due to offer Stapled Securities that are anticipated to be marketed in the
member states of the EEA.
Each of FH-REIT and FH-BT will be an alternative investment fund (the AIF), as defined in the
Alternative Investment Fund Managers Directive 2011/61/EU of the European Parliament and of
the European Council (the AIFMD). The REIT Manager and the Trustee-Manager are considered
the alternative investment fund manager of each of FH-REIT and FH-BT respectively (the
AIFM), as defined in the AIFMD. Where the marketing (as defined in the AIFMD) of FHT in the
EEA does not fall within any applicable transitional relief periods under the AIFMD, the AIFM will
conduct such marketing in accordance with the requirements of article 42 of the AIFMD, as
implemented in relevant EEA member states.
Article 42 of the AIFMD requires that certain disclosures are made to investors prior to an
investment in an AIF. These disclosures are contained in the Prospectus and this Appendix
I. Appendix I is provided in order to make disclosures supplemental to those contained in
the Prospectus, and to summarise certain of the disclosures more particularly described in
the Prospectus. Any prospective investor domiciled, or with a registered office, in the EEA
must read the entire Prospectus and not only this Appendix I.
Investment Objective, Investment Strategy and Investment Restrictions
The Investment Objective and Investment Strategy of FHT are summarised in the section titled
Overview, and further discussed in detail in the sub-sections Investment Policy, Objectives
and Key Strategies of the section titled Strategy.
The principal strategy of FH-REIT is to invest on a long-term basis, directly or indirectly, in a
diversified portfolio of income-producing real estate located anywhere in the world except
Thailand, which is used primarily for hospitality and/or hospitality-related purposes, whether
wholly or partially, as well as real estate-related assets in connection to the foregoing.
The REIT Managers investment strategy for FH-REIT may be changed within three years from the
Listing Date if an Extraordinary Resolution is passed by the holders of FH-REIT Units.
Under the Property Funds Appendix, FH-REIT may only invest in:
(a) real estate, whether freehold or leasehold, in or outside Singapore. An investment in real
estate may be by way of direct ownership or a shareholding in an unlisted special purpose
vehicle constituted to hold or own real estate. An investment in another property fund that is
authorised under section 286(1) of the SFA and the Property Funds Appendix will be
considered as an investment in real estate;
(b) real estate-related assets, wherever the issuers/ assets/ securities are incorporated/ located/
issued/ traded;
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(c) listed or unlisted debt securities and listed shares of, or issued, by local or foreign
non-property corporations;
(d) government securities (issued on behalf of the Singapore Government or governments of
other countries) and securities issued by a supranational agency or a Singapore statutory
board; and
(e) cash and cash equivalent items.
For investments in permissible investments under sub-paragraphs (c), (d) or (e) above (except for
deposits placed with eligible financial institutions and investments in high-quality money market
instruments or debt securities), not more than 5% of the FH-REITs Deposited Property may be
invested in any one issuers securities or any one managers funds. A corporation and its
subsidiary companies are regarded as one issuer or manager.
At least 75.0% of FH-REITs Deposited Property should be invested in income-producing real
estate and FH-REIT should not invest in vacant land and mortgages (except for mortgage-backed
securities). In addition, the total contract value of property development activities undertaken by
FH-REIT and investments in uncompleted property developments should not exceed 10.0% of the
Deposited Property.
Location of FHT
The sections titled Structure of FHT and The Formation and Structure of FHT, FH-REIT and
FH-BT contain information about FHTs location.
FHT is a hospitality stapled group comprising FH-REIT and FH-BT. FH-REIT is a Singapore-based
REIT and FH-BT is a Singapore-based business trust. FHT is regulated by the Deeds as well as
any legislation and regulations governing FHT, FH-REIT and FH-BT. The Properties are located
in Singapore, Australia, the United Kingdom, Japan and Malaysia.
The Public Offer is open to members of the public in Singapore. However, the qualified investors
in the EEA may subscribe to Stapled Securities in FHT via the Placement Tranche by the
execution and delivery of the Placement Units application forms (or in such other manner as the
Joint Bookrunners may in their absolute discretion deem appropriate).
An investor who is allocated and issued Stapled Securities will become Stapled Securityholders
in FHT in respect of such number of Stapled Securities that have been allocated and issued to it.
The rights and interests of Stapled Securityholders are contained in the Deeds which are
governed by the laws of Singapore. The terms and conditions of the Deeds shall be binding on
each Stapled Securityholder as if such Stapled Securityholders had been a party to the Deeds and
as if the Deeds contains covenants by such Stapled Securityholder to observe and be bound by
the provisions of the Deeds. A Stapled Securityholder has no equitable or proprietary interest in
the underlying assets of FH-REIT and (if applicable) FH-BT. A Stapled Securityholder is not
entitled to the transfer to him of any asset (or any part thereof) or of any real estate, any interest
in any asset and real estate-related assets (or any part thereof) of FH-REIT and (if applicable)
FH-BT.
There is no single legal regime in Singapore governing the recognition and enforcement of foreign
judgments in Singapore. Rather, under Singapore law, there exists common law, and statute
mechanisms for the recognition and enforcement of foreign judgments in Singapore. Each of
these is subject to its own procedures and qualifications and whether a judgment given in a foreign
court will be enforced in Singapore must be considered in light of the relevant factors in each case,
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including the applicable regime, the specific jurisdiction where such judgment was given and
whether the requirements for recognition and enforcement of the foreign judgment have been
satisfied.
Types of Assets
The sections titled Overview Key Investment Highlights of FHT and Business and Properties
contain disclosure on the investments that the Fund anticipates it will make. Information on
investment techniques that FHT intends to employ in making those investments is set out in the
section titled Strategy.
Prospective investors should also review the risk factors summarised in the section titled Risk
Factors.
Detailed information is given in the section titled Business and Properties. Prospective investors
should also review the risk factors associated with investing in FHT, which are contained in the
section titled Risk Factors.
Use of Leverage and Associated Risks
Details of FHTs use of leverage, the types and sources of leverage permitted is set out in
Appendix B Independent Reporting Auditors Report on the Compilation of Unaudited Pro
Forma Financial Information, the Property Funds Appendix and in the section titled
Capitalisation and Indebtedness.
FH-REIT is permitted to borrow up to 35.0% of the value of the Deposited Property at the time the
borrowing is incurred, taking into account deferred payments (including deferred payments for
assets whether to be settled in cash or in Units). However, the Property Funds Appendix also
allows FH-REIT to borrow more than 35.0% (up to a maximum of 60.0%) of the value of the
Deposited Property if a credit rating from Fitch, Moodys or Standard & Poors is obtained and
disclosed to the public. The Manager has obtained, in respect of FH-REIT, a provisional credit
rating of (P) Baa2 (stable outlook) from Moodys
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. As at the Listing Date, FHT is expected to have
an Aggregate Leverage of 41.7%.
Risks relating to leverage are set out in the section titled Risk Factors under the headings The
amount FH-REIT may borrow is subject to the aggregate leverage limit set out in the Property
Funds Appendix, which may affect the operations of FHT and FHT faces risks associated with
debt financing.
Identity of Service Providers
The identities of the material service providers to FHT, are disclosed in the section titled The
Formation and Structure of FHT, FH-REIT and FH-BT.
1
The provisional credit rating assumes the listing of FHT on the SGX-ST, the drawdown of debt facilities of S$728.6
million and the acquisition of the Properties by FH-REIT. The final rating is conditional upon the successful
completion of all the events described in the foregoing sentence. The REIT Manager expects Moodys to assign its
final rating of FH-REIT on the Listing Date and will make an announcement on SGXNET of the final rating when it
has been assigned to FH-REIT. All ratings are subject to revision or withdrawal at any time. Moodys has not
provided its consent, for the purposes of Section 249 (read with Section 302) of the SFA, to the inclusion of the credit
rating information and is therefore not liable for such information under Sections 253 and 254 (read with Section
302) of the SFA and Sections 282N and 282O of the SFA. While the REIT Manager has taken reasonable action to
ensure that the information has been reproduced in its proper form and context, and that it has been extracted fairly
and accurately, neither the REIT Manager nor any other party has conducted an independent review of, nor verified
the accuracy of, such information. The provisional credit rating obtained from Moodys is current and Moodys will
be paid by FH-REIT to provide the credit rating. The credit rating is not a recommendation to invest in any securities.
Issuer credit ratings express Moodys opinion of an entitys creditworthiness and ability to meet its senior financial
obligations. More information on Moodys and its rating are available on its website www.moodys.com.
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The Managers will be categorised as the alternative investment fund manager (as defined in the
AIFMD) and will conduct the marketing of FHT in the EEA in accordance with the requirements of
article 42 of the AIFMD. The Managers are wholly owned subsidiaries of the Sponsor.
CDP acts as the depository and clearing organisation for FHT and information on the role of CDP
is set out in the section Clearance and Settlement. FH-REIT and FH-BT have appointed Ernst
& Young LLP as Reporting Auditor. The Reporting Auditor will perform an audit of FH-REITs and
FH-BTs financial statements for each fiscal year.
FHT is reliant on the continued service and performance of third party service providers (each, a
Service Provider) and in particular, certain key personnel of the Sponsor and the Managers.
The duties of the Managers are set out in the Prospectus and the Deeds, each of which are made
available to investors prior to their investment in FHT. Please also refer to the sections titled
Certain Fees and Charges, Management and Corporate Governance, The Formation and
Structure of FHT, FH-REIT and FH-BT, Certain Agreements Relating to FHT, FH-REIT, FH-BT
and the Properties and Experts for more information.
Without prejudice to any potential right of action in tort or any potential derivative action, investors
in FHT may not have a direct right of recourse against any Service Providers appointed by FHT
as such a right of recourse will lie with the relevant contracting counterparty rather than the
investors. Further, in circumstances where an affiliate or third party delegate is appointed by the
Managers or the Trustee, any contractual claim, demand or action against such delegate may, in
the absence of any derivative action, be brought only by the Managers and/or the Trustee.
In the event that an investor in FHT considers that it may have a claim against FHT, the Managers,
the Trustee (in its capacity as trustee of FHT) or against any other Service Provider in connection
with its investment in FHT, such investor should consult its own legal advisers.
The Managers and Delegation by the Managers
In the absence of fraud, gross negligence, wilful default or breach of the Deeds by the Managers,
it shall not incur any liability by reason of any error of law or any matter or thing done or suffered
to be done or omitted to be done by it in good faith under the Deeds. In addition, the Managers
shall be entitled, for the purpose of indemnity against any actions, costs, claims, damages,
expenses or demands to which it may be put as Managers, to have recourse to the Deposited
Property or any part thereof as set out in the sub-sections Roles and Responsibilities of the REIT
Manager in relation to management of FH-REIT and Roles and Responsibilities of the
Trustee-Manager in relation to the management of FH-BT of the section titled Management and
Corporate Governance, save where such action, cost, claim, damage, expense or demand is
occasioned by the fraud, gross negligence, wilful default or breach of the Deeds by the Managers.
The Managers may, with the written consent of the Trustee, delegate certain of its duties in
performing its functions in relation to FHT to affiliates or third parties. Subject to the above
limitation, the Managers shall be liable for all acts and omissions of such person as if such acts
and omissions were its own. Further information is set out in the section titled Management and
Corporate Governance.
Potential conflicts of interest and the steps taken to mitigate any conflicts in relation to the
Managers and FHT are discussed in the section titled Management and Corporate Governance.
Valuation
The Initial Portfolio has been valued by the Independent Valuers. The summary reports by the
Independent Valuers can be found in Appendix D Independent Property Valuation Summary
Reports. Information on how income from leases is calculated is set out in the section titled
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Business and Properties. The valuation of the Properties by the Independent Valuers was
derived based on the Income Capitalisation Method and Discounted Cash Flow Method. A
valuation of the real estate of FH-REIT will be conducted at least once a year (as required under
the Property Funds Appendix). The first such valuation will be conducted by 31 December 2014.
Further information on the valuation procedure and pricing methodology for valuing assets are set
out in Appendix D Independent Property Valuation Summary Reports.
Liquidity Risk Management
As at the Listing Date, FH-REIT will have working capital of at least S$8.4 million. The REIT
Manager believes that this working capital balance will be sufficient for FH-REITs working capital
requirements over the next 12 months following the Listing Date.
For so long as the Stapled Securities are listed on the SGX-ST, the Stapled Securityholders have
no right to request the Managers to repurchase or redeem their Stapled Securities. Further
information on redemption of Stapled Securities is set out in the sub-section Redemption of the
Stapled Securities of the section titled The Formation and Structure of FHT, FH-REIT and
FH-BT.
Please refer to sub-section Liquidity risk in Appendix C Unaudited Pro Forma Financial
Information for further information on the approach to liquidity management.
Fees, Charges and Expenses
A breakdown of the various fees payable by Stapled Securityholders is set out under the section
titled Certain Fees and Charges. Please also review the section titled Management and
Corporate Governance for further details on the Managers remuneration structure. Investors in
the Placement Tranche may be required to pay brokerage of up to 1.0% of the Offering Price.
Further details of the fees that Joint Bookrunners and Underwriters are entitled to are set out in
the section titled Plan of Distribution. The Board of Directors, Executive Officers, Compliance
Officer and Company Secretary will be paid customary fees for their services. A description of
such fees will be disclosed in the annual reports.
Description of Fair Treatment or Preferential Treatment
Save for the payment of brokerage fees in relation to the Placement Tranche, no unfair or
preferential treatment is afforded to any Stapled Securityholders. Under the Deeds, every Stapled
Security carries the same voting rights. A summary of Stapled Securityholders key rights is set out
in the sub-section Rights and Liabilities of the Holders of FH-REIT Units and Rights and
Liabilities of the Holders of FH-BT Units of the section titled The Formation and Structure of FHT,
FH-REIT and FH-BT.
Net Asset Value, Latest Annual Report and Periodic Disclosures
The Annual Reports will set out, amongst others, the annual valuation of each property held by
FH-REIT and (if applicable) FH-BT, the value of the FH-REIT Deposited Property and the value of
the FH-BT Trust Property and the NAV of FH-REIT and FH-BT at the beginning and end of the
accounting period under review. As the Stapled Securities are publicly traded in Singapore, the
latest price of each Stapled Security is available on SGX-ST.
The Managers are responsible for producing the annual report and to update Stapled
Securityholders with further information as and when relevant. The annual report of FHT is
required to contain, amongst others, details of FH-REITs and (if applicable) FH-BTs real estate
assets, details of investments other than real property (if applicable), annual valuation of each
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property of FH-REIT and (if applicable) FH-BT, details of FH-REITs and (if applicable) FH-BTs
exposure to derivatives, details of borrowings, historical performance of FH-REIT and (if
applicable) FH-BT, and any other information that is required to be disclosed under applicable law.
Where the REIT Manager and (if applicable) the Trustee-Manager considers such information to
be necessary in order to comply with Articles 23(4) and (5) of the AIFMD, the REIT Manager and
(if applicable) the Trustee-Manager shall cause to be delivered to each Stapled Securityholder,
concurrently with the annual report, such information as is required to be provided to each Stapled
Securityholder pursuant to Articles 23(4) and (5) of the AIFMD. Detailed information on the
contents of the annual report is set out in the sub-section Annual Reports of the section titled
Management and Corporate Governance. Additionally, FHT will announce the NAV of FH-REIT
and (if applicable) FH-BT on a quarterly basis. Such announcements will be based on the latest
available valuation of the real estate of FH-REIT and (if applicable) FH-BT, which will be
conducted at least once a year (as required under the Property Funds Appendix).
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SPONSOR
Frasers Centrepoint Limited
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
MANAGER OF FRASERS HOSPITALITY REAL ESTATE INVESTMENT TRUST TRUSTEE-MANAGER OF FRASERS HOSPITALITY BUSINESS TRUST
Frasers Hospitality Asset Management Pte. Ltd.
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Frasers Hospitality Trust Management Pte. Ltd.
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
SOLE GLOBAL COORDINATOR AND ISSUE MANAGER
DBS Bank Ltd.
12 Marina Boulevard Level 46
DBS Asia Central @ Marina Bay Financial Centre Tower 3
Singapore 018982
JOINT BOOKRUNNERS AND UNDERWRITERS
DBS Bank Ltd.
12 Marina Boulevard Level 46
DBS Asia Central @ Marina
Bay Financial Centre Tower 3
Singapore 018982
Morgan Stanley Asia
(Singapore) Pte.
23 Church Street #16-01
Capital Square
Singapore 049481
Standard Chartered
Securities (Singapore) Pte. Limited
8 Marina Boulevard Level #19-01
Marina Bay Financial Centre
Tower 1
Singapore 018981
United Overseas Bank
Limited
80 Raffles Place
UOB Plaza
Singapore 048624
RECEIVING BANK
DBS Bank Ltd.
12 Marina Boulevard Level 46
DBS Asia Central @ Marina
Bay Financial Centre Tower 3
Singapore 018982
TRUSTEE OF FRASERS HOSPITALITY REAL ESTATE INVESTMENT TRUST
The Trust Company (Asia) Limited
8 Marina Boulevard #05-02
Marina Bay Financial Centre
Singapore 018981
LEGAL ADVISERS
Legal Adviser to the Offering, and the REIT Manager, the Trustee-Manager and the Sponsor
Allen & Gledhill LLP
One Marina Boulevard #28-00
Singapore 018989
Legal Adviser to the REIT
Manager, the Trustee-Manager
and the Sponsor as to
Australian Law
Legal Adviser to the REIT
Manager, the Trustee-Manager
and the Sponsor as to
English Law
Legal Adviser to the REIT Manager,
the Trustee-Manager and the Sponsor
as to Japanese Law
Legal Adviser to the REIT Manager,
the Trustee-Manager and the Sponsor
as to Malaysian Law
Minter Ellison Lawyers
Rialto Towers
525 Collins Street
Melbourne VIC 3000
Dentons UKMEA LLP
One Fleet Place
London, EC4M 7WS
Anderson Mori & Tomotsune
Akasaka K-Tower, 2-7
Motoakasaka 1-chome
Minato-ku, Tokyo Japan 107-0051
Zaid Ibrahim & Co
Level 19 Menara Milenium
Pusat Bandar Damansara
50490 Kuala Lumpur
Malaysia
Legal Adviser to the Sole Global Coordinator and
Issue Manager and the Joint Bookrunners and
Underwriters as to Singapore Law
Legal Adviser to the Sole Global Coordinator and
Issue Manager and the Joint Bookrunners and
Underwriters as to United States
Federal Securities Law
Legal Adviser to the REIT Trustee
WongPartnership LLP
12 Marina Boulevard Level 28
Marina Bay Financial Centre Tower 3
Singapore 018982
Shearman & Sterling LLP
6 Battery Road #25-03
Singapore 049909
Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
Independent Reporting Auditor Independent Tax Advisers
Ernst & Young LLP
One Raffles Quay
North Tower, Level 18
Singapore 048583
KPMG Services Pte. Ltd.
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
UNIT REGISTRAR AND UNIT TRANSFER OFFICE
Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
INDEPENDENT VALUERS
CBRE Pte. Ltd.
6 Battery Road #32-01
Singapore 049909
Colliers International Consultancy & Valuation
(Singapore) Pte Ltd
1 Raffles Place #45-00
One Raffles Place
Singapore 048616
Jones Lang LaSalle Hotels (NSW) Pty Limited
A.B.N. 65 075 217 462
Level 26, 420 George Street
Sydney NSW 2000
INDEPENDENT MARKET RESEARCH CONSULTANT
Jones Lang LaSalle Property Consultants Pte Ltd
9 Raffles Place #39-00
Republic Plaza
Singapore 048619
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Frasers Hospitality Asset Management Pte. Ltd., as manager (the REIT Manager) of Frasers
Hospitality Real Estate Investment Trust (FH-REIT) and Frasers Hospitality Trust Management Pte.
Ltd., as trustee-manager (the Trustee-Manager) of Frasers Hospitality Business Trust (FH-BT)
are making an offering (the Offering) of 185,063,000 stapled securities in Frasers Hospitality Trust
(FHT, and the stapled securities in FHT, the Stapled Securities), which is a hospitality stapled
group comprising FH-REIT and FH-BT. Each Stapled Security comprises a unit in FH-REIT (FH-REIT
Unit) and a unit in FH-BT (FH-BT Unit). The Offering consists of (i) an international placement of
139,609,000 Stapled Securities to investors, including institutional and other investors in Singapore
(the Placement Tranche) of which 8,597,000 Stapled Securities will be reserved for subscription
by the directors, management, employees and business associates of Frasers Centrepoint Limited
(FCL or the Sponsor) and the REIT Manager and persons who have contributed to the success
of FHT (the Reserved Stapled Securities), and (ii) an offering of 45,454,000 Stapled Securities to
the public in Singapore (the Public Offer).
The issue price of each Stapled Security under the Offering will be S$0.88 per Stapled Security
(the Offering Price). The sole global coordinator and issue manager for the Offering is DBS Bank
Ltd. (the Global Coordinator or the Sole Global Coordinator and Issue Manager). DBS Bank
Ltd., Morgan Stanley Asia (Singapore) Pte., Standard Chartered Securities (Singapore) Pte. Limited,
and United Overseas Bank Limited are the joint bookrunners and underwriters for the Offering
(collectively, the Joint Bookrunners). The Offering is fully underwritten at the Offering Price by
the Joint Bookrunners on the terms and subject to the conditions of the Underwriting Agreement
(as defned herein).
The total number of Stapled Securities in issue as at the date of this Prospectus is one Stapled
Security (the Sponsor Initial Stapled Security). The total number of outstanding Stapled Securities
immediately after the completion of the Offering will be 1,192,628,000 Stapled Securities.
Concurrently with, but separate from the Offering, the vendor of Fraser Suites Singapore, will receive
262,377,999 Stapled Securities in part satisfaction of the purchase consideration for Fraser Suites
Singapore (the FCL Consideration Stapled Securities) and will direct the FCL Consideration
Stapled Securities to be issued to FCL Investments Pte. Ltd. (the Sponsor Entity), a wholly-owned
subsidiary of the Sponsor.
Concurrently with, but separate from the Offering, the vendors of the Hotels (as defned herein)
will receive 474,009,091 Stapled Securities in part satisfaction of the purchase consideration for
the Hotels and will apply part of the cash consideration towards the subscription of additional
Stapled Securities to give an aggregate number of 512,238,000 Stapled Securities (collectively, the
TCC Stapled Securities), and direct the TCC Stapled Securities to be issued to TCC Hospitality
Limited (TCC Hospitality), the shares of which are owned equally by Atinant Bijananda, Thapana
Sirivadhanabhakdi, Wallapa Traisorat, Thapanee Techajareonvikul and Panote Sirivadhanabhakdi, the
fve children of Mr Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi.
In addition, concurrently with, but separate from the Offering, each of the Cornerstone Investors (as
defned herein) has entered into a subscription agreement to subscribe for an aggregate of 232,949,000
Stapled Securities (the Cornerstone Stapled Securities) at the Offering Price conditional upon
the Underwriting Agreement having been entered into, and not having been terminated, pursuant
to its terms on or prior to the Settlement Date.
Prior to the Offering, there has been no market for the Stapled Securities. The offer of Stapled
Securities under this Prospectus will be by way of an initial public offering in Singapore. An application
has been made to Singapore Exchange Securities Trading Limited (SGX-ST) for permission to
list on the Main Board of the SGX-ST (i) all the Stapled Securities comprised in the Offering,
(ii) the Sponsor Initial Stapled Security and the FCL Consideration Stapled Securities (collectively,
the Sponsor Stapled Securities), (iii) the TCC Stapled Securities, (iv) the Cornerstone Stapled
Securities, (v) all the Stapled Securities which may be issued to the REIT Manager or the Trustee-
Manager from time to time in full or in part payment of fees payable to the REIT Manager or the
Trustee-Manager, (vi) all the Stapled Securities which may be issued to Frasers Hospitality Pte. Ltd.
and the related corporations (within the meaning ascribed to under the Companies Act, Chapter
50 of Singapore) of Frasers Hospitality Pte. Ltd. (the Serviced Residence Operators) from time
to time in full or in part payment of fees payable to the Serviced Residence Operators and (vii) all
the Stapled Securities which may be issued to the MIT Manager (as defned herein) from time to
time in full or part payment of fees payable to the MIT Manager. Such permission will be granted
when FHT has been admitted to the Offcial List of the SGX-ST (the Listing Date). Acceptance
of applications for the Stapled Securities will be conditional upon issue of the Stapled Securities and
upon permission being granted to list the Stapled Securities. In the event that such permission is not
granted or if the Offering is not completed for any other reason, application monies will be returned
in full, at each investors own risk, without interest or any share of revenue or other beneft arising
therefrom, and without any right or claim against any of FHT, FH-REIT, FH-BT, the REIT Manager, The
Trust Company (Asia) Limited, as trustee of FH-REIT (the REIT Trustee), the Trustee-Manager, the
Sponsor, the Global Coordinator or the Joint Bookrunners.
FHT has received a letter of eligibility from the SGX-ST for the listing and quotation of (i) up to
1,300,000,000 Stapled Securities, (ii) the Stapled Securities to be issued to the REIT Manager or the
Trustee-Manager from time to time in full or part payment of fees payable to the REIT Manager or
the Trustee-Manager, (iii) the Stapled Securities to be issued to the Serviced Residence Operators
from time to time in full or part payment of fees payable to the Serviced Residence Operators and
(iv) the Stapled Securities to be issued to the MIT Manager from time to time in full or part payment
of fees payable to the MIT Manager. FHTs eligibility to list on the Main Board of the SGX-ST does
not indicate the merits of the Offering, FHT, FH-REIT, FH-BT, the REIT Manager, the REIT Trustee,
the Trustee-Manager, the Sponsor, the Global Coordinator, the Joint Bookrunners or the Stapled
Securities. The SGX-ST assumes no responsibility for the correctness of any of the statements or
opinions made or reports contained in this Prospectus. Admission to the Offcial List of the SGX-
ST is not to be taken as an indication of the merits of the Offering, FHT, FH-REIT, FH-BT, the REIT
Manager, the REIT Trustee, the Trustee-Manager or the Stapled Securities.
FH-REIT is a scheme pending authorisation under the Securities and Futures Act, Chapter 289 of
Singapore (the SFA). FH-BT is a business trust pending registration under the Business Trusts
Act, Chapter 31A of Singapore (the BTA). A copy of this Prospectus has been lodged with
and registered by the Monetary Authority of Singapore (the Authority or MAS) on 23 June
2014 and 30 June 2014 respectively. The MAS assumes no responsibility for the contents of this
Prospectus. Lodgement with, or registration by, the MAS of this Prospectus does not imply that
the SFA, the BTA or any other legal or regulatory requirement has been complied with. The MAS
has not, in any way, considered the investment merits of the FH-REIT Units, the FH-BT Units and
the Stapled Securities, being offered for investment. This Prospectus will expire on 29 December
2014 (six months after the date of the registration of this Prospectus).
No Stapled Security shall be allotted or allocated on the basis of this Prospectus later than six
months after the date of registration of this Prospectus by the MAS.
See section entitled Risk Factors of this Prospectus for a discussion of certain factors to be
considered in connection with an investment in the Stapled Securities. None of FHT, FH-REIT, FH-
BT, the REIT Manager, the REIT Trustee, the Trustee-Manager, the Sponsor, the Global Coordinator
or the Joint Bookrunners guarantees the performance of FHT, the repayment of capital or the
payment of a particular return on the Stapled Securities.
Investors applying for the Stapled Securities by way of Application Forms or Electronic Applications
(both as referred to in Appendix G, Terms, Conditions and Procedures for Application for and
Acceptance of the Stapled Securities in Singapore) will pay the Offering Price per Stapled Security
on application, subject to a refund of the full amount or, as the case may be, the balance of the
application monies (in each case without interest or any share of revenue or other beneft arising
therefrom), where (i) an application is rejected or accepted in part only, or (ii) the Offering does
not proceed for any reason.
In connection with the Offering, the Joint Bookrunners have been granted an over-allotment option
(the Over-Allotment Option) by TCC Hospitality (the Stapled Security Lender), a company
incorporated in the British Virgin Islands (BVI), exercisable by Morgan Stanley Asia (Singapore) Pte.
(the Stabilising Manager) (or any of its affliates) or other persons acting on behalf of the Stabilising
Manager, in consultation with the other Joint Bookrunners, in full or in part, on one or more occasions,
from the Listing Date but no later than the earlier of (i) the date falling 30 days from the Listing
Date; or (ii) the date when the Stabilising Manager (or any of its affliates or other persons acting on
behalf of the Stabilising Manager) has bought, on the SGX-ST, an aggregate of 35,737,000 Stapled
Securities, representing 19.3% of the total number of Stapled Securities in the Offering, to undertake
stabilising actions to purchase up to an aggregate of 35,737,000 Stapled Securities (representing
19.3% of the total number of Stapled Securities in the Offering), at the Offering Price. The exercise
of the Over-Allotment Option will not increase the total number of Stapled Securities outstanding.
In connection with the Offering, the Stabilising Manager (or any of its affliates) may, in consultation
with the other Joint Bookrunners and at its discretion, over-allot or effect transactions which stabilise
or maintain the market price of the Stapled Securities at levels that might not otherwise prevail in
the open market. However, there is no assurance that the Stabilising Manager (or any of its affliates
or other persons acting on behalf of the Stabilising Manager) will undertake stabilising action. Such
transactions may be effected on the SGX-ST and in other jurisdictions where it is permissible to do
so, in each case in compliance with all applicable laws and regulations.
Nothing in this Prospectus constitutes an offer for securities for sale in the United States or any
other jurisdiction where it is unlawful to do so. The Stapled Securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and, subject to
certain exceptions, may not be offered or sold within the United States (as defned in Regulation S
under the Securities Act (Regulation S)). The Stapled Securities are being offered and sold outside
the United States in reliance on Regulation S.
OFFERING OF 185,063,000 STAPLED SECURITIES (SUBJECT TO THE OVER-ALLOTMENT OPTION
(AS DEFINED HEREIN)) OFFERING PRICE: S$0.88 PER STAPLED SECURITY
PROSPECTUS DATED 30 JUNE 2014
(REGISTERED WITH THE MONETARY AUTHORITY
OF SINGAPORE ON 30 JUNE 2014)
This document is important. If you are in any doubt as to the action that you
should take, you should consult your legal, fnancial, tax or other professional adviser.
7.0%
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FRASERS HOSPITALITY REAL ESTATE INVESTMENT TRUST
(a real estate investment trust constituted on 12 June 2014 under the laws of the Republic of Singapore)
managed by
Frasers Hospitality Asset Management Pte. Ltd.
FRASERS HOSPITALITY TRUST
438 Alexandra Road
#21-00, Alexandra Point
Singapore 119958
Tel: (65) 6276 4882
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DISTRIBUTION YIELD FOR PROJECTION YEAR 2015
Sole Global Coordinator and Issue Manager Sponsor Joint Bookrunners and Underwriters
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The projected yield for the Projection Year 2015 is calculated based on the Offering Price and the various assumptions set out in this Prospectus. Such yield will vary accordingly for investors who
purchase Stapled Securities in the secondary market at a price different from the Offering Price.
Frasers Hospitality Trust (FHT) is the frst global hotel and serviced residence trust to be listed on the
SGX-ST, comprising FH-REIT and FH-BT.
FHT provides investors exposure to one of the largest global hospitality portfolios comprising hotels and
serviced residences, by number of rooms.
FHTs geographically diversifed Initial Portfolio consists of 12 quality assets in prime locations within key
gateway cities across Asia, Australia and the United Kingdom.
FIRST GLOBAL HOTEL AND
SERVICED RESIDENCE TRUST
TO BE LISTED IN SINGAPORE
ABOUT FRASERS HOSPITALITY TRUST
Park International London, UK
InterContinental Singapore
Co-Managers and Sub-Underwriters
COMPRISING:
FRASERS HOSPITALITY BUSINESS TRUST
(a business trust constituted on 20 June 2014 under the laws of the Republic of Singapore)
managed by
Frasers Hospitality Trust Management Pte. Ltd.