In a major step towards the much-anticipated listing of Far East Hospitality Trust, which is expected to own about $2 billion of assets, Orchard Parade Holdings (OPH) yesterday unveiled plans to sell leasehold interests in three assets to the proposed trust for at least $702 million.
OPH is 58.87 per cent owned by Far East Organization.
On June 12, the trust received a letter of eligibility from the Singapore Exchange for the listing of up to about 1.785 billion stapled securities.
The three assets OPH is proposing to sell to the trust are Orchard Parade Hotel, Albert Court Village Hotel in the Selegie area and Central Square Village Residences at Havelock Road. Leasehold interests for 50, 75 and 80 years respectively in these assets will be sold to the trust.
Talk in the market is that the trust could own a total of around $2 billion of assets. Besides the three properties that OPH is proposing to sell to the trust, other assets in the Far East portfolio (excluding OPH) which could make their way to the trust could include The Elizabeth, Landmark Village, Changi Village and Oasia (in the Novena area) hotels, as well as serviced residences such as Riverside Village Residences (in the Singapore River locale) and Hougang Village Residences (next to Hougang 1 mall).
It is thought that Far East's more upmarket serviced residences such as Orchard Parksuites and Orchard Scotts are unlikely to be included at the IPO stage as their yields may not be sufficiently high.
The Fullerton Hotel Singapore and The Fullerton Bay Hotel - which are owned by Sino Group, the Hong Kong-based sister company of Far East, will not be part of the proposed trust's portfolio, BT understands.
The trust will be a stapled group comprising a real estate investment trust (Reit) and a business trust. Last year, Gerald Lee, formerly from the Ascott group, became chief executive of FEO Hospitality Asset Management Pte Ltd, the proposed Reit manager.
Goldman Sachs, DBS and HSBC are the bankers for the proposed IPO of the trust.