RESORTS group Banyan Tree may spin off its hotels in South- east Asia into a real estate investment trust (Reit) after the hospitality Reit industry matures further, said executive chairman Ho Kwon Ping yesterday.
"What we think is going to happen in a few years' time is that there will be appetite for a Reit of our kind, which will be hotels that would not necessarily be in Singapore or Hong Kong but diversified and within the region," said Mr Ho, speaking on the sidelines of the firm's first- quarter results briefing at Fullerton Hotel.
"That's what we're looking towards... (these) are the type of assets we have."
He said Banyan Tree's sale and leaseback of the Angsana Velavaru resort in the Maldives to CDL Hospitality Trusts (CDLHT) in January signalled the growth of more South-east Asian hospitality Reits that include resorts.
"There's increasing appetite for a higher risk exposure now," noted Mr Ho, adding that Banyan made the deal with CDLHT as it wanted to see how large the investment appetite was for a "much more emerging-market" hospitality Reit.
The $86.8 million sale of the Maldives resort boosted Banyan Tree's first-quarter earnings. Net profit for the three months to March 31 climbed 19 per cent to $14.2 million on the back of a 17 per cent increase in revenue to $96.9 million year on year.
The company said this was due to a strong showing from its hotel investments, particularly those in Thailand. Turnover from the segment jumped 30 per cent to $70.1 million in the first quarter compared with the same period last year.
This offset a 43 per cent drop in property sales revenue to $3.6 million from the preceding year.