Frasers Hospitality Trust Financial Statements Announcement For the financial period from 20 June 2014 (Date of Constitution) to 31 December 2014

Transcription

1 Frasers Hospitality Trust Financial Statements Announcement For the financial period from 20 June 2014 (Date of Constitution) to 31 December 2014 Frasers Hospitality Trust ( ) is a stapled group comprising Frasers Hospitality Real Estate Investment Trust ( FH-REIT ) and Frasers Hospitality Business Trust ( FH-BT ). is 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 to the foregoing. was listed on the Mainboard of the Singapore Exchange on 14 July 2014 (the "Listing Date"). FH-REIT and FH-BT are managed by Frasers Hospitality Asset Management Pte. Ltd. (the REIT Manager ) and Frasers Hospitality Trust Management Pte. Ltd. (the Trustee- Manager ), respectively. FH-REIT was constituted by a trust deed dated 12 June 2014 entered into between the REIT Manager and The Trust Company (Asia) Limited (as Trustee of FH-REIT) (the REIT Trustee ). FH-BT was constituted by a trust deed dated 20 June 2014 and is presently dormant. The units in FH-REIT and FH-BT are stapled together as stapled securities in ( Stapled Securities ) under the terms of a stapling deed dated 20 June 2014 entered into between the REIT Manager, the REIT Trustee and the Trustee-Manager. Each Stapled Security comprises one unit in FH-REIT and one unit in FH-BT and cannot be traded separately. Initial Portfolio The initial portfolio of (the Initial Portfolio ) comprises 12 properties, six hotels (the Hotels ) and six serviced residences (the Serviced Residences, and together with the Hotels, the Properties ), 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. Hotels InterContinental Singapore Novotel Rockford Darling Harbour Park International London Best Western Cromwell London ANA Crowne Plaza Kobe The Westin Kuala Lumpur Total Market Segment Luxury Mid-scale Mid-scale Mid-scale Upper Upscale Upper Upscale Number of Rooms ,928 Serviced Residences Market Segment Number of Units Fraser Suites Singapore Upper Upscale 255 Fraser Suites Sydney Upper Upscale 201 Fraser Place Canary Wharf Upper Upscale 108 Fraser Suites Queens Gate Upper Upscale 105 Fraser Suites Glasgow Upper Upscale 98 Fraser Suites Edinburgh Upper Upscale 75 Total 842 Distribution Policy Distributions from comprises distributions from FH-REIT and FH-BT. FH-REIT s distribution policy is to distribute 100.0% of FH-REIT s Distributable Income for the period from the Listing Date to 30 September 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. FH-REIT s first distribution after the Listing Date will be for the period from the Listing Date to 31 March 2015 and will be paid on or before 29 June FH-BT was dormant as at the Listing Date and no distributions will be made during the period that FH-BT remains dormant. In the event that FH-BT becomes active and profitable, FH-BT s 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 Board of Directors of the Trustee-Manager. 1 Page 1

2 1 (a) (i) Consolidated Statement of Total Return for the period from 20 June 2014 to 31 December 2014 Frasers Hospitality Trust was constituted on 20 June 2014 and was inactive since the date of constitution till 13 July The Consolidated Statement of Total Return primarily comprises operational results for Frasers Hospitality Trust commencing from its date of listing on 14 July Master lease rental Gross Revenue Property tax Property insurance Property management fee Other property expenses Property Operating Expenses Net Property Income REIT Manager's management fee Other management fee Trustees' fee Other expenses Note S$'000 Total return before foreign exchange differences, fair value changes and taxation (1,063) Foreign exchange gain, net 1,202 Net change in fair value of investment properties (d) 40,320 Net change in fair value of derivative financial instruments (e) 9,511 Realised gain on derivative financial instruments (f) 536 Total return for the Period before tax 14 Jul 2014 to 31 Dec 2014 (a) 50,181 (4,046) (410) (2,790) (1,089) (8,335) (3,424) (725) (201) (5,400) Other expenses in relation to Initial Public Offering ("IPO") (27,263) Other income 254 Finance income 85 Amortisation of debt upfront costs Interest expense (719) (5,516) Taxation (2,387) Total return for the Period after tax 50,181 41,846 50,506 48,119 1 Page 2

3 1 (a) (ii) Consolidated Distribution Statement Reconciliation of total return to income available distribution Total return for the period after tax (Non-taxable) / non-tax deductible items and other items and other adjustments: Amortisation of debt upfront costs Foreign exchange gain, net Goodwill on acquisition of subsidiaries written off Issuance costs not deductible Net change in fair value of investment properties Net change in fair value of derivative financial instruments Other management fee payable in Stapled Securities Property management fee payable in Stapled Securities REIT Manager's management fee payable in Stapled Securities Realised gain on derivative financial instruments Stamp duties on acquisition of investment properties Trustee's fee Other adjustments Foreign-sourced income from the entities in Japan yet to be distributed to Net effect of (non-taxable) / non-tax deductible items and other adjustments Income available for distribution to Stapled Securities holders for Note (g) (h) (i) (j) 14 Jul 2014 to 31 Dec 2014 (a) S$'000 48, (1,217) 4,296 1,930 (40,320) (9,511) 587 2,790 3,424 (536) 25, (4) (5,515) (17,901) 30,218 (a) (d) (e) (f) (g) (h) (i) (j) No comparative consolidated statement of total return and consolidated distribution statement are provided as was constituted on 20 June 2014 and listed on SGX-ST on 14 July Accordingly, the results of are for the period from 14 July 2014 to 31 December There was no activity from the date of constitution, 20 June 2014 to 13 July Other expenses include an impairment loss on goodwill of approximately S$4.3 million which arose from the acquisition of the entities that held ANA Crowne Plaza Kobe. The expenses comprise stamp duties paid in relation to the acquisition of the United Kingdom and Australia properties of approximately S$25 million and one-off non-capitalisable issuance costs including initial public listing fee, registry fee, advertisements, design & printing of prospectus and roadshow expenses etc. The net change in fair value of investment properties relates to the net fair value gains arising from the measurement of the Group's investment properties at fair value based on valuations performed by independent valuers as at 31 December This relates to unrealised gains arising from fair valuation of cross currency swap and foreign currency forward contracts. This relates to realised gain arising from the settlement of foreign currency forward contracts. This relates to one-off non-capitalisable issuance costs incurred at listing. MIT Manager's management fee are payable in Stapled Securities. Serviced residences management fee and trademark licence fee are payable in Stapled Securities. Foreign-sourced income from Japan will be remitted after completion of statutory audit and tax filing. This revenue is expected to be received once every year in May/June to be included for distribution for each financial year ending 30 September. Hence, Japan's results have been excluded from the computation of 's Distributable Income ("DI"). 1 Page 3

4 1 (i) Statements of Financial Position FH-REIT FH-BT Note 31 Dec 2014 (a) 31 Dec 2014 (a) 31 Dec 2014 (a) S$'000 S$'000 S$'000 Non-current assets Investment properties 1,660,108 1,660,108 - Deferred tax assets Derivative financial instruments 10,350 10,350 1,670,706 1,670,706 - Current assets Trade and other receivables 56,323 56,323 - Prepayments 1,667 1,667 - Derivative financial instruments Cash and bank balances 76,083 76, , , Total assets 1,804,781 1,804, Current liabilities Trade and other payables (d) 26,517 26,512 5 Deferred income Derivative financial instruments Income tax payables 1,453 1,453 - Borrowings 44,599 44,599-73,329 73,324 5 Non-current liabilities Borrowings (net of transaction costs) 670, ,282 - Rental Deposits 14,751 14,751 - Deferred income 8,778 8,778 - Deferred tax liabilities 4,769 4, , ,580 - Total Liabilities 771, ,904 5 Net assets attributable to Stapled Securities holders 1,032,872 1,032,867 5 Stapled Securities holders' funds Stapled Securities in issue 1,049,513 1,049, Issue costs (21,238) (21,238) - Retained earnings 48,119 48,124 (5) Hedging reserves Foreign currency translation reserve (44,316) (44,316) - Stapled Securities holders' funds 1,032,872 1,032,867 5 (a) No comparative balance sheet are provided as was listed on SGX-ST on 14 July (d) Derivative financial instruments relate to fair value of cross currency swap and interest rate swaps entered to hedge FH- REIT's borrowings. This mainly relates to VAT receivable on acquisition of 5 UK investment properties of approximaly GBP 21 million (equivalent to S$44 million) and rental income receivable from master lessees. This mainly relates to trade payables, accrued interest expense payable to banks, provision of witholding tax, accruals of professional fees, accruals of property management fee and IPO issuance costs paid on behalf by Sponsor prior to constitution of. 1 Page 4

5 1 b (ii) Aggregate Amount of Borrowings (as at 31 December 2014) Secured S$'000 Unsecured S$'000 Amount repayable in one year or less, or on demand -.44,599 (1). Amount repayable after one year *.35,625 (2)..634,657 (3). * net of transaction costs Details of borrowings and collateral: (1) (2) Short term unsecured facilities drawn from a revolving credit facility of S$50million. The S$ million secured borrowings were drawn under the MYR95 million Senior Bond and the interest rate on these borrowings is 4.9% p.a. The Senior Bond will mature 5 years from 14 July 2014 and is secured by the property, The Westin Kuala Lumpur. (3) The S$ million unsecured borrowings were drawn from (i) S$615 million of Term Loan Facilities with staggered loan maturities of three-year and five-year terms and (ii) the JPY2.35 billion Kobe Excellence TMK series 1 Bonds maturing 5 years from 14 July Page 5

6 1 Consolidated Cash Flow Statement (14 July 2014 to 31 December 2014) CASH FLOWS FROM OPERATING ACTIVITIES Total return before income tax Adjustments for: Amortisation of debt upfront costs 719 Finance costs 5,516 Finance income (85) Goodwill on acquisition of subsidiaries written off 4,296 Net change in fair value of derivative financial instruments (9,511) Net change in fair value of change in investment properties (40,320) Other management fee payable in Stapled Securities 587 Property management fee payable in Stapled Securities 2,790 REIT Manager's management fee payable in Stapled Securities 3,424 Unrealised gain on foreign exchange, net (1,276) Other expenses in relation to IPO 27,263 Cash generated from operations before working capital changes 43,909 Changes in working capital: Prepayments Trade and other receivables Trade and other payables Rental deposits Deferred income Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition costs (25,333) Acquisition of investment properties (1,526,004) Additions to investment properties (1,574) Acquisition of subsidiaries (107,883) Net cash used in investing activities (1,660,794) CASH FLOWS FROM FINANCING ACTIVITIES Finance cost paid Interest income received Issuance of new Stapled Securities upon IPO Issue expenses Proceeds from borrowings, net of debt upfront costs Net cash generated from financing activities Note (a) S$'000 50,506 (1,667) (55,538) (24,322) 14,677 8,878 (14,063) (5,442) 85 1,049,513 (13,683) 719,673 1,750,146 Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial Period Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial Period 75, ,083 For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the Balance Sheet date: Cash and cash equivalent comprise: Cash and bank balances 72,387 Fixed deposits 3,696 Cash and cash equivalents 76,083 (a) No comparative consolidated cash flow statement are provided as was listed on SGX-ST on 14 July On listing date, 1,192,627,999 stapled securities in were issued at S$0.88 each to the public, cornerstone investor, Sponsor, TCC in part satisfaction of the purchase consideration of properties. The amount of S$368 million was proceeds received from cornerstone investors and the public. 1 Page 6

7 1 (d) (i) Consolidated Statement of Changes in Stapled Securities Holders' Funds Stapled Securities holders' transactions Balance at beginning of the period Issuance of new Stapled Securities upon initial public listing Issue costs Balance at end of the period Retained earnings Balance at beginning of the period Profit for the period Balance at end of the period Hedging reserve Balance at beginning of the period Movement for the period Balance at end of the period Foreign currency translation reserve Balance at beginning of the period Movement for the period Balance at end of the period 14 Jul 2014 to 31 Dec 2014 (a) S$'000-1,049,513 (21,238) 1,028,275-48,119 48, (44,316) (44,316) 1,032,872 (a) No comparative figures are provided as was listed on SGX-ST on 14 July (d) (ii) Details of Changes in Issued and Issuable Units Issued Stapled Securities at date of constitution Issue of new Stapled Securities at the date of prospectus - 30 June 2014 Issue of new Stapled Securities on listing date Total issued units Issuable Stapled Securities As payment of REIT Manager's management fee As payment of other management fee As payment of property management fee Total issued and issuable Stapled Securities Note 14 Jul 2014 to 31 Dec 2014 (a) No. of Units 1 1,192,627,999 1,192,628,000 3,876, ,552 3,158,666 1,200,327,668 (a) No comparative figures are provided as was listed on SGX-ST on 14 July This represents 100% of the REIT Manager's management fee and property management fee payable in Stapled Securities. This represents 100% of the MIT Manager's management fee payable in Stapled Securities Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by the auditor. Where the figures have been audited or reviewed, the auditor's report (including any qualifications or emphasis of matter). Not applicable. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied. has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current reporting period as disclosed in the prospectus dated 30 June 2014 (the "Prospectus"). If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. Not applicable. 1 Page 7

8 6 Earnings per Stapled Security unit ("EPU") and Distribution per Stapled Security unit ("DPU") for the financial period ended 31 December 2014 (DPU for this period is for illustrative purpose only) Note 14 Jul 2014 to 31 Dec 2014 (a) Weighted average number of Stapled Securities in issue Total return for the Period after tax (S$'000) Profit Per Unit based on weighted average number of Stapled Securities in issue (cents) 1,192,628,000 48, Total number of issued and issuable Stapled Securities at end of Period Distribution to Stapled Securities holders (S$'000) DPU based on the total number of Stapled Securities entitled to distribution (cents) (DPU for this period is for illustrative purpose only) 1,200,327,668 30, (a) No comparative figures are provided as was listed on SGX-ST on 14 July (i) (ii) The weighted average number of units is weighted for the period from Listing Date to 31 December The diluted EPS is the same as basic EPS as no dilutive instruments were in issue during the reported period. The computation of DPU for the period from Listing Date to 31 December 2014 is based on the number of units entitled to distribution, being: The number of units in issue as at 31 December 2014 of 1,192,628,000; and The estimated number of units to be issued to the Asset Manager, MIT Manager and Property Manager as consideration for Asset Manager's management fee, MIT Manager management fee and property management fee payable for the period from 14 July 2014 to 31 December 2014 is 7,699,668.** ** As provided for in the Trust Deed dated 12 June 2014 constituting FH-REIT (the "Trust Deed"), the price of a unit issued shall be computed based on the volume weighted average price of a unit or Stapled Security for the last ten business days immediately preceding the relevant business day of the issue of such units or Stapled Securities. Therefore, the actual number of units to be issued may deviate from the above illustrative number of units. The computation of DPU for the period from 14 July 2014 to 31 December 2014 is performed for illustrative purpose only. makes distributions on a semi-annual basis and the first distribution is for the period from 14 July 2014, being the Listing Date, to 31 March 2015 and payable within 90 days from the end of the said period. 7 Group net asset value ("NAV") per unit based on existing units in issue and to be issued as at 31 December 2014 Number of Stapled Securities unit issued and issuable at end of period entitled to distribution Net asset value (S$'000) Net asset value per unit (cents) Note 14 Jul 2014 to 31 Dec 2014 (a) 1,200,327,668 1,032, (a) No comparative figures are provided as was listed on SGX-ST on 14 July (i) The number of units in issue as at 31 December 2014 of 1,192,628,000; and (ii) The number of Stapled Securities used for computation of actual NAV per Stapled Securities as at 31 December 2014 is 1,200,327,668 comprising: The estimated number of units to be issued to the Asset Manager, MIT Manager and Property Manager as consideration for Asset Manager's management fee, MIT Manager management fee and property management fee payable for the period from 14 July 2014 to 31 December 2014 is 7,699,668.** ** As provided for in the Trust Deed dated 12 June 2014 constituting FH-REIT (the "Trust Deed"), the price of a unit issued shall be computed based on the volume weighted average price of a unit or Stapled Security for the last ten business days immediately preceding the relevant business day of the issue of such units or Stapled Securities. Therefore, the actual number of units to be issued may deviate from the above illustrative number of units. 8 A review of the performance for the period from 14 July 2014 to 31 December 2014 Please refer to Section 9 for a review of 's actual results for the period from 14 July 2014 to 31 December 2014 against the forecast as disclosed in the Prospectus. was a dormant private trust during the period from 20 June 2014 to 13 July The acquisition of the portfolio of was only completed on the Listing Date. Consequently, the actual income derived from the Properties for the current period was from the Listing Date to 31 December Page 8

9 9 9 (a) Variance between the forecast and actual results Statement of Net Income and Distribution (Actual vs Forecast) Gross revenue (S$'000) Net property income Income available for distribution (S$'000) Income available for distribution per unit (cents) (DPU for this period is for illustrative purpose only) 14 Jul 2014 to 31 Dec 2014 (a) Note Actual Forecast Inc / (Dec) % 50,181 50,231 (0.10)% 41,846 40, % 30,218 33,915 (10.90)% (10.99)% (a) The acquisition of the portfolio of FH-REIT was completed on Listing Date which was the day it was officially listed on the SGX-GT. The forecast figures are extracted from the Prospectus and pro-rated to 171 days for the period from 14 July 2014 to 31 December 2014, except for non-recurring items such as stamp duties and one-off non-capitalised issuance costs incurred at listing. The Group did not utilise income top up from InterContinental Singapore and Fraser Suites Singapore during the financial period and consequently the amounts have been excluded from the forecast above. Foreign-sourced income from Japan will be remitted after completion of statutory audit and tax filing. This revenue is expected to be received once every year in May/June to be included for distribution for each financial year ending 30 September. The actual figures above do not include any income from Japan. If Japan's results are included, actual income available for distribution would be S$35.7 million and the income available for distribution per unit would be 2.97 cents for the financial period. 9 A review of the performance (Actual vs Forecast) Operational Performance During the financial period under review, met its Gross Revenue ("GR") forecast of S$50.2 million and exceeded its Net Property Income ("NPI") forecast of S$40.9 million by 2.3% due to lower than expected owner s expenses. This, together with lower interest expense for the period, translated to higher Distributable Income ("DI"). Nevertheless, as foreign-sourced income from Japan will be received once a year in May/June and included in the distribution for the financial period ending 30 September, we have excluded the results of the Japan property and the adjusted DI for this period was S$30.2 million. GR from the Singapore properties was in line with forecast. InterContinental Singapore s performance mirrored the performance of hotels in the luxury sector¹ which registered growth even as the supply of hotel rooms increased in Singapore. The hotel enjoyed higher occupancies during its peak season from September to November 2014 and achieved higher average rates during Formula One in September Fraser Suites Singapore turned in a softer performance in line with the weakening trend in Singapore s rental market largely impacted by an increase of residential supply amidst tighter foreign labour policy and lower corporate allowances for employees. Since the unfortunate Malaysia Airlines aviation incidents, performance of The Westin Kuala Lumpur was impacted along with the softening corporate and leisure market in Kuala Lumpur. GR and NPI of The Westin Kuala Lumpur were about 8% lower than forecasted at MYR13.4 million and MYR12.6 million respectively. GR of the Japan property was 6% higher at JPY674.8 million than forecast due to stronger performance during the peak season of October and November 2014 while lower than expected owner s expenses pushed NPI up 11.4% to JPY598.8 million over the forecast. Overall GR and NPI of the Australia properties, at AUD6.9 million and AUD5.3 million, were 5.0% and 8.0% higher than forecast respectively. The properties achieved higher-than-expected occupancies with peak months in October and November 2014 coinciding with key events such as National Rugby League Championships, Fiesta 2014, Christmas and New Year celebrations. Overall GR of the United Kingdom ( UK ) properties of GBP6.6 million exceeded forecast by 8.0% while NPI of GBP5.3 million exceeded forecast by 15.0%. The UK portfolio recorded strong performance after completion of asset enhancement initiatives at Fraser Place Canary Wharf and Fraser Suites Queens Gate coupled with the peak leisure season in London. Key events such as the Ryder Cup, Commonwealth Games, Homecoming and Referendum held in Scotland further boosted the performance of the UK portfolio. 1 Singapore Tourism Promotion Board, 5 January Page 9

10 10 Commentary on the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Singapore s hospitality industry is facing headwinds with increasing supply of hotel rooms. The city is expected to have 60,000 hotel rooms by the end of While hotel rates could face certain pressure, tourist arrivals to Singapore which is expected to grow between 5-7.0% 2, may help to support occupancy levels. Voted the top international meeting country for the third consecutive year 3, Singapore is expected to remain a popular corporate destination in Asia Pacific. Coupled with Singapore s Golden Jubilee SG50 celebrations 4, the new Singapore Sports Hub and the opening of the National Gallery Singapore 5, the pipeline of events is likely to showcase Singapore as an attractive tourist destination. Tourism arrivals and Malaysia s hospitality industry was affected by the Malaysia Airlines aviation incidents. The Malaysian government has launched a new MyFest 2015 campaign, expected to target 29.4 million tourist arrivals and MYR89 billion in tourist receipts with a year filled with festivals and events 6. Japan s tourism industry has been supported by the rising number of direct flights from international cities, the weakening yen and relaxed visa restrictions for South East Asian countries. Both corporate and leisure travel to Japanese cities is expected to increase. Kobe, a key satellite city, is thus well-positioned as a leisure, corporate and Meetings, Incentives, Conferences and Exhibitions ( MICE ) destination with the growth in tourism. Australia s economic growth has been affected by declining commodities demand. Nevertheless, ADR and occupancy rates for Sydney s hospitality sector is expected to rise on the back of constrained room supply against high tourist arrivals 7. Looking ahead, the redevelopment of Sydney Convention and Exhibition Center and the Darling Harbour vicinity, slated to complete in 2016, is expected to continue to boost the city s tourism statistics. Total tourism expenditure for Australia increased 4.2% to AUD101.6 billion from January to October Although growth for the Eurozone will be expectedly slower in 2015, tourist arrivals to the UK is forecasted to reach 35.1 million visits in 2015, with visitor spending of GBP22.2 billon, an increase of 2.5% in volume and 4.5% in value compared to Singapore Business Review- 2 HVS, Asia Pacific Hotel Watch The Straits Times, 27 Jun 2015, Singapore is the top international meeting destination in the world again 4 Singapore50.sg 5 Nationalgallery.sg 6 Ttgasia.com 7 JLL, Hotels and Hospitality Group, October Tourism Research Australia, October Visitbritain.com 1 Page 10

11 11 Distributions (a) (d) Current financial period Any distribution declared for the current financial period? No. Corresponding period of the immediately preceding financial year Any distribution declared for the corresponding period of the immediately preceding financial period? Not applicable. Date payable Not applicable. Books closure date Not applicable. 12 If no dividend has been declared/recommended, a statement to that effect makes distributions to Stapled Securities holders on a semi-annual basis for every six-month period ending 31 March and 30 September. The first distribution is for the period from 14 July 2014, being the Listing Date, to 31 March 2015 and will be paid on or before 29 June If the Group has obtained a general mandate from holders for Interested Party Transactions ("IPT"), the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, please make a statement to that effect. did not obtain a general mandate from Stapled Securities holders for IPTs. 14 Directors' Confirmation Confirmation by Directors pursuant to clause 705(5) of the Listing Manual of SGX-ST We confirm that to the best of our knowledge, nothing has come to the attention of the Board of Directors of Frasers Hospitality Asset Management Pte. Ltd. ("FHAMPL") (as Manager of FH-REIT) and Frasers Hospitality Trust Management Pte. Ltd. ("MPL") (as Trustee Manager of FH-BT) which may render these financial results for the period from 14 July 2014 to 31 December 2014 to be false or misleading, in any material respect. For and on behalf of the Board of Directors of Frasers Hospitality Asset Management Pte. Ltd. Frasers Hospitality Trust Management Pte. Ltd. Law Song Keng Director Choe Peng Sum Director 15 Use of proceeds The use of proceeds raised from the IPO of on the Listing Date is as follows: Per Listing Announcement Actual Difference (a) Note S$'000 S$'000 S$'000 Balance purchase consideration for the acquisition of the initial portfolio Issue-related costs General corporate and working capital purpose Total use of proceeds 338, ,163 3,714 28,368 24,379 (3,989) 1,033 1,033 - (d) 367, ,575 (275) (a) The use of proceeds disclosed in the Listing Announcement dated 14 July 2014 was translated into SGD using the exchange rate of AUD/SGD: , GBP/SGD: , JPY/SGD: and MYR/SGD: which was the assumed exchange rate as of the Listing Date. (d) In relation to Ana Crowne Plaza Kobe, FH-REIT acquired through Excellence Prosperity TMK Pte. Ltd. and a Singaporeincorporated subsidiary of FH-REIT acquired Excellence Prosperity (Japan) K.K. from Excellence Prosperity (Singapore) Pte. Ltd. on the Listing Date were based on the estimated net asset value of these entities as at 31 March However, the additional consideration was paid based on the final net asset value of the completion accounts as at 13 July The additional consideration was partially settled by the savings from issue-related costs raised during IPO. The actual amounts include issuance related costs disbursed on behalf by Frasers Centrepoint Limited and its subsidiaries (the "Sponsor") of S$9.8 million. Savings in issue-related costs pertain to lower actual professional fees paid, lower spending on prospectus production, road shows expenses and certain expenses. The savings on issue-related costs was used for partial settlement of final considerations in relation to acquisition of Ana Crowne Plaza Kobe. The difference of S$275,000 is related to unpaid invoices and accrual of unbilled invoices from professionals/suppliers. 1 Page 11

12 This announcement may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of management on future events. Any discrepancies in the tables included in this announcement between the listed amounts and total thereof are due to rounding. BY ORDER OF THE BOARD Frasers Hospitality Asset Management Pte. Ltd. (Company registration no D) As Manager of Frasers Hospitality Real Estate Investment Trust Frasers Hospitality Trust Management Pte. Ltd. (Company registration no M) As Trustee Manager of Frasers Hospitality Business Trust Piya Treruangrachada Company Secretary 29 January 2015 DBS Bank Ltd. is the Sole Global Coordinator and Issue Manager for the initial public offer of stapled securities in (the Offering ). 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. 1 Page 12