Construction giant Far East Consortium International Limited is considering the potential spinoffs and separation of listings in Australia, Singapore, the UK and Malaysia for certain of their hospitality projects. This is a move the company is considering in the hope that a new revenue stream is created and its prospects of expansion are strengthened.
There were no details on this plan, however it is likely that the spinoff would include its six current hotels in Malaysia, the two in London and the one in Singapore. This is the company’s recently acquired Oakwood Premier OUE Singapore.
The Far East Consortium is expected to incorporate its Australian resort development. They are a partner of 25% of the Brisbane Destination Konsortium, which, together with The Star Entertainment Group and Chow Tai Fook, is currently developing Queen’s Wharf Brisbana at an expense of approximately AU$3.6 billion.
In a filing with the Hong Kong Stock Exchange, the company explained that
“The Board believes that the potential spin-off and separate listing, if it proceeds, would among others: (i) create an asset management platform for the Group dedicated to hospitality assets, which would generate a new income stream to the Group, (ii) unlock and crystallize the value of the hospitality properties of the Group, and allow the Group to recycle capital, and (iii) facilitate more active third-party hotel acquisitions using the spun-off entity.”
Even in works the first steps in this move. Hours after filing, Far East Consortiums revealed they are considering the trust that could levele up 500 million dollars (365,44 million dollars) of real estate investment in Singapore. The Hong Kong-based company works with advisors to sell mainly hotels under the Dorsett brand, according to a report.
The Singapore REIT sector has become an attractive place for investors. The amount of capital collected from immovable listings reached an all-time high last month.
Furthermore, this year, The Far East Consortium acquired assets very quickly. The company also has hosted $3.7 billion in trust IPOs for the past three years, in addition to the acquisition of the Oakwood Premier OUE Hotel in Singapore. Currently, 28 hotels with a total of 7,500 rooms and 15 other properties are owned.