Property developer Far East Orchard (FEOrchard) signed a memorandum of understanding with Australia-based hotel operator Toga Pty (Toga Group) on Wednesday which will explore the setting up of a proposed joint venture.
Under the agreement, the proposed joint venture will serve as a hotel management and ownership platform in Australia.
Plans are also in the pipeline for the proposed joint venture to acquire two hotels and three serviced apartments in Australia, with a total inventory of more than 700 units located in Sydney, Adelaide, Brisbane and Darwin.
The Toga Group is one of the largest hospitality operators in Australia, with hospitality management contracts to operate about 6,700 rooms across 50 hotels and serviced apartments in Australia, New Zealand, Germany and Denmark.
FEOrchard, a unit of Singapore’s largest private developer Far East Organization, will subscribe for shares in the proposed joint venture company.
CEO and managing director of FEOrchard, Lucas Chow, said in a statement: “We continue to source for opportunities which will allow Far East Orchard to expand our footprint beyond Singapore and to manage third party hospitality assets”.
FEOrchard is currently evaluating the proposed joint venture and the transactions pursuant to it, including its structure and shareholding interest.
Separately, the company said in November that it was exploring plans to buy The Straits Trading Company’s entire hospitality management business and stakes in the company’s hotel assets.
Should both transactions proceed, Mr Chow said Far East Orchard will be able to tap on the expanded regional portfolio of more than 80 hotels and services residences under nine distinctive brands in the value to upscale market segments.
Source : Channel NewsAsia – 13 Dec 2012