Tag Archives: Far East Hospitality Trust

Far East HT announces higher-than-forecast distribution

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Far East Hospitality Trust has announced a higher distribution per unit (DPU) from its earlier forecast.

At its maiden results briefing, the trust says DPU per stapled security will be 2.09 cents.

This compared to its forecast of only 2 cents during its initial public offering (IPO) in August.

The higher distribution comes on the back of a rise in income available for distribution of S$33.6 million.

Far East Hospitality Trust has earlier forecasted an income available for distribution of S$32.2 million during its IPO.

The trust manager says its hotels have performed better than forecasted.

But this is due to higher revenue from the commercial spaces, and meeting and banquet business which helped offset lower-than-expected room rates.

Looking ahead, the trust says it is also trying to attract more leisure travellers.

Income from its serviced residences were affected last year due to the cut back on corporate spending amid the global slowdown.

Gerald Lee, Chief Executive Officer, Far East Hospitality Trust, said: “We also undertook asset enhancement…to refresh our products, that enabled us to command better rates when the new products were put into the inventory after the refurbishment. At the same time, there were also opportunities in organic growth, as some of our properties were new. For example like Oasia Hotel, they had a full operating year last year.

We were able to renegotiate corporate rates at a higher levels after locking in promotional rates in the first year. Going forward, with the backing of Far East Organization as a strong sponsor, we will also be able to capitalise on potential assets that we could acquire into the Trust to help us to grow and deliver more value to the unit holders.”

The trust says it is in talks with The Straits Trading Company to acquire Rendezvous Grand Hotel Singapore.

It is currently carrying out due diligence on the deal and adds that there is no assurance that the transaction will proceed.

Source : Channel NewsAsia – 6 Feb 2013

Far East Orchard studying plans to buy Straits Trading’s hospitality arm

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Far East Orchard – a unit of Far East Organization, Singapore’s largest privately held developer by assets – said on Monday it planned to buy Straits Trading Co’s hospitality management business and stakes in the company’s hotel assets, Dow Jones Newswires reported.

Far East Orchard said it signed a non-binding memorandum of understanding with Straits Trading for the proposal, which also involves potentially acquiring 50 per cent stakes in three of Straits Trading’s hotels in Australia.

The deal, if successful, would allow Far East Orchard to expand its hospitality management business into markets like China, Australia and New Zealand, boosting its portfolio to more than 30 hotels and serviced apartments and over 6,000 rooms. The company would also gain trademark rights to the “Rendezvous” and “Marque” brands.

Far East Orchard didn’t provide a potential value or timeline for the proposal, which it is still studying. Any definitive agreement for the planned acquisitions would only be signed after the end of this year, it added.

Separately on Monday, Far East Hospitality Trust, backed by Far East Organization, said it planned to acquire leases for Straits Trading Co’s hotel and retail assets in Singapore.

Under the proposal, Far East Hospitality’s real estate investment trust would acquire leases for Rendezvous Grand Hotel and Rendezvous Gallery. The trust didn’t provide a potential value or timeline for the proposed purchase.

Source : Today – 26 Nov 2012

Far East Hospitality to tap ASEAN tourism growth

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Hotel and serviced residence owner Far East Hospitality Trust aims to tap South-east Asia’s booming tourism demand and grow its portfolio value by 50 per cent over the next two years.

Far East Hospitality expects to acquire a hotel and two serviced residences – Orchard Parksuites and Orchard Scotts Residences – from its sponsor Far East Organisation within the next 24 months, increasing its portfolio by more than S$1 billion from S$2.1 billion currently, CEO Gerald Lee said.

The trust, which owns 11 Singapore properties, raised S$717.6 million ($583.8 million) last month in its initial public offering that was the largest in the city-state this year and attracted strong interest from investors due to its yields and exposure to Singapore’s tourism industry.

“We’re seeing countries like Indonesia and the Philippines opening up and seeing healthy economic growth … that will help to drive business travel,” Mr Lee told Reuters.

Singapore real estate investment trusts have risen 27.5 per cent this year, driven by demand for stable yields and income in a broader market that saw the Straits Times Index gain 14.4 per cent.

Source : Today – 13 Sep 2012

Far East Hospitality Trust prices IPO at 93 cents per stapled security

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Far East Organization has priced its hospitality trust listing at 93 Singapore cents per stapled security, the top end of its indicative price range.

The public offer opens at 9am on Friday, and the trust manager said it believes the timing of the listing is right.

Targeting to raise about S$1.49 billion, Far East Hospitality Trust is the largest initial public offering (IPO) in Singapore this year.

The trust’s portfolio consists of seven hotels and four serviced residences in Singapore and is valued at over S$2 billion.

Gerald Lee, chief executive officer of FEO Hospitality Asset Management, said: “We continue to see a lot of emphasis by the government to create new hotel rooms in the city to cater to growing demand.

“Far East wants to participate actively in these land tenders by having a platform that allows us to actively bid for and develop new properties, to participate in the growth of Singapore as a destination.”

Handling the offer with DBS, Goldman Sachs and OCBC, HSBC said the institutional tranche of the IPO was over 30 times subscribed.

Chang Tou Chen, managing director and head of global banking (Southeast Asia) at HSBC, said: “There was very strong demand from Asia, from Europe and both from long investors as well as hedge funds. This is reflective of the quality of the IPO…the dynamics are just right and the sponsor (Far East Organization) is very well known and trusted. It is also reflective of investors having the risk appetite to invest in IPOs again.”

When it lists on August 27, the trust will be the fourth hospitality trust in Singapore.

The other three are CDL Hospitality Trusts, Ascott Residence Trust and Ascendas Hospitality Business Trust.

Ti Wee Pang, an analyst at DMG & Partners Research, said: “Compared to Ascendas Hospitality which was listed a couple of weeks back, Far East Hospitality’s assets are all located in Singapore. Ascendas’ assets are in China, Australia and Japan.

“At the same time, Far East Hospitality gives the investor community confidence in the sense that they have been hotel operators for a long period of time, and that is the reason why even though they are offering a yield of 6 to 6.5 per cent, we believe it will be well received by the investor community.”

Analysts said yields of real estate investment trusts in Singapore average 5.5 per cent.

Hospitality REITs have outperformed the Straits Times Index (STI) year-to-date – the sector is up more than 20 per cent year-to-date while the STI is only up by around 13 per cent. And analysts continue to be bullish on the sector as tourism growth appears to be holding up well amid the slowing economy.

Ti Wee Pang said: “At the moment, we are still maintaining an overweight call on the hospitality REIT sector. Although the visitor arrival rate dropped in May, going forward, especially in the second half of the year, we believe this visitor arrival rate will pick up again on the back of a couple of events – for example the Formula One race and the new attractions that will be opening.”

Source : Channel NewsAsia – 16 Aug 2012

Orchard Parade shareholders OK plans to list hospitality REIT

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Shareholders of Orchard Parade Holdings Limited (OPHL) have approved the firm’s plans to divest three properties.

This was agreed upon at an extraordinary general meeting held Wednesday, where 99.9 per cent of shareholders voted in approval.

The three properties are: Orchard Parade Hotel, Albert Court Village Hotel and Central Square Village Residences.

OPHL said in a statement that it would now proceed with plans to list Far East Hospitality Trust — which comprises a REIT and a business trust — on the Singapore Exchange.

The company will also acquire hospitality and healthcare assets from its parent company, Singapore-based developer Far East Organisation in an asset swap deal.

Shareholders also approved a special dividend and a dividend-in-kind of the company’s 14.5 per cent shareholdings in Yeo Hiap Seng Limited (YHS).

In addition, they also approved a name change of the company to “Far East Orchard Limited”.

This was to better reflect its close alignment with its substantial shareholder, and leverage on the “Far East” brand.

The approval and support for the restructuring of the company will allow OPHL to participate more actively in its property development business.

It will also see it expand into the new businesses of hospitality management and healthcare real estate, the company said in a statement.

Mr Lucas Chow, OPHL’s chief executive officer and managing director, said: “This is the start of an exciting journey for OPHL as we expand into hospitality management and healthcare real estate.

“We will now also have the ability to explore new opportunities and develop new projects. We look forward to growing the company and building a strong and sustainable business.”

The transactions are now conditional upon the successful initial public offering (IPO) and listing of Far East Hospitality Trust on the Singapore Exchange.

Far East Hospitality Trust will lodge its prospectus and make the announcements at the appropriate time.

Source : Channel NewsAsia – 11 Jul 2012