13
ANNUAL REPORT 2015
FRASERS HOSPITALITY TRUST
LETTER TO STAPLED SECURITYHOLDERS
to that of the initial portfolio. This was
mainly attributable to the acquisition
of Sofitel Sydney Wentworth in
July 2015 as well as the improved
valuation of its portfolio.
The acquisition of Sofitel Sydney
Wentworth was financed by a
combination of equity raised in a
private placement and Australian
dollar debt, to take advantage of
the relatively low cost of Australian
dollar debt during that time.
The REIT Manager achieved a good
amount of natural hedge for FH-
REIT’s foreign assets by borrowing
in Australian dollar, Japanese yen
and Malaysian ringgit. FH-REIT’s
all-in cost of borrowings for FY2015
was 2.4% per annum. FH-REIT’s
exposure to rising interest rates
in the near term remains low. As
at 30 September 2015, its loan
portfolio comprised 96% unsecured
borrowings, with 73.0% of our
borrowings on fixed rates. In fixing
those interest rates, FH-REIT entered
into interest rate swaps and a cross
currency swap to fix the borrowing
costs for the floating-rate loans
over the entire tenure of the loans.
FHT’s gearing was 38.9% as at 30
September 2015.
The REIT Manager hedges the
foreign exchange risk arising
from income from foreign
assets using suitable derivative
financial instruments on an
ongoing basis. This ensures that the
income available for distribution
will be less exposed to volatility in
exchange rates.
On an ongoing basis, the REIT
Manager continues to actively
manage the capital structure and the
financial risks of FH-REIT in order to
meet the stated objectives.
ANA Crowne Plaza Kobe
