[SINGAPORE] A strategic review is underway for Acrophyte Hospitality Trust, formerly known as ARA US Hospitality Trust, as a potential transaction involving its stapled securities is on the table – but not guaranteed.
On Friday (May 30), the managers said they were evaluating a “range of strategic options” for the hospitality stapled group. This is in light of its potential capital expenditure needs in relation to the ongoing asset enhancement requirements of its existing portfolio.
“In connection with their evaluation, the managers are also in discussions with the sponsor in respect of a potential transaction involving the stapled securities,” they said.
Despite being in the process of reviewing options, the managers emphasised that “there is no certainty that any transaction will materialise” from the ongoing review or discussions.
Seven more hotels in Acrophyte’s portfolio are slated for asset enhancement initiatives in 2025, after six hotels completed such initiatives in 2024.
Work on two Marriott-branded hotels will commence in June, and that on five Hyatt-branded ones, in November.
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The hospitality stapled group comprises Acrophyte Hospitality Property Trust and Acrophyte Hospitality Management Trust.
In a Q1 2025 business update, it said revenue declined 7.7 per cent to US$33.5 million from US$36.2 million in the year-ago period amid an 8.3 per cent year-on-year downsizing of its portfolio.
Its Q1 operating profit was 12.8 per cent lower at US$9.3 million, from US$10.7 million in the previous corresponding period.
Acrophyte’s move follows a similar strategic review by Frasers Hospitality Trust’s (FHT), announced in April.
In May, FHT’s sponsor Frasers Property renewed its bid to privatise the stapled group at S$0.71 per stapled security, following an unsuccessful attempt in 2022. FHT comprises Frasers Hospitality Reit and Frasers Hospitality Business Trust.
Acrophyte was renamed from ARA US Hospitality Trust after the manager changed hands to come under Acrophyte AM, a unit of Acrophyte, which largely consists of the businesses of former listco Chip Eng Seng.
The entities are all ultimately controlled by Gordon and Celine Tang, who are well known in property and construction circles.
Stapled securities of Acrophyte ended on Thursday 9.4 per cent or US$0.025 higher at US$0.29, before the announcement.
