The REIT Manager this morning clarified certain information contained in The Edge’s article entitled “Closer look at EHT’s portfolio following Nov 2 replies to SGX” published on 3 Nov 2019.


By way of background, 6 assets in EH-REIT’s 18-asset portfolio acquired at the IPO are referred to in Eagle Hospitality Trust’s prospectus dated 16 May 2019 as the ASAP6 Portfolio.

The Edge purported a deviation between:

(1) the price at which EH-REIT acquired 3 assets within the ASAP6 Portfolio from Urban Commons (the “Referenced Assets”), and

(2) the price that ASAP International Holdings (“ASAP”) originally paid for said assets (on average, 2.5 years ago in private transactions).


While ASAP’s original purchase prices for assets comprising the ASAP6 Portfolio have not been disclosed and are not known to the REIT Manager, the REIT Manager calls into question the values reported in The Edge article, which we believe reflect the mortgage amounts at the time ASAP originally acquired certain of the Referenced Assets (and not the actual purchase prices).

Salvatore Takoushian EagleREIT 819REIT manager: President & CEO Salvatore Takoushian. NextInsight file photoIn this situation, the alleged purchase prices would not reflect the equity components of these transactions, thereby underestimating ASAP’s original purchase prices.

In addition, the REIT Manager does not think that the valuation comparisons made are representative, as it does not take into consideration:

(1) a meaningful time lapse (again, approximately 2.5 years on average) since ASAP originally acquired the Referenced Assets, and

(2) the significant capital invested and reserved since ASAP’s original acquisitions.


As disclosed in the Prospectus, with respect to the Referenced Assets, approximately US$22.4 million was invested and reserved since ASAP’s original acquisitions.

Further, the REIT Manager would also like to highlight that the ASAP6 Portfolio has been valued by two independent valuers in connection with the IPO and that each of the 6 assets of the ASAP6 Portfolio were injected into EH-REIT at a discount of at least 12% to their adopted valuation as of 31 December 2018.

The REIT Manager would also like to correct the following inaccurate statement made in The Edge Article: “While it is clear that the City owns the Queen Mary, it is not clear whether Urban Commons received permission to sublet the ship to EHT for US$139.5 million. In the event of default, the ship – presumably – reverts to the City.”

This statement is incorrect in 2 primary ways:

(1) as clearly articulated in the Prospectus, EH-REIT owns the leasehold interest to Queen Mary which it acquired at the time of the IPO (EH-REIT does not lease the ship from Urban Commons, but rather EH-REIT sub-leases the Queen Mary to Urban Commons with the express consent of the City of Long Beach), and

(2) as referenced in the REIT Manager’s SGX responses on 28 October 2019 to clarify, in part, The Edge’s original article dated 23 October 2019 – in the event of a default by Urban Commons to make required repairs at the Queen Mary, EH-REIT reserves the right to cure the default and make the repairs itself at Urban Commons expense and/or to terminate the existing master lease and enter into a new master lease with a third party.



Press release here -- including comments on Business Times article and points highlighted by Board.