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Far East Consortium considering separate listings for assets

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Construction giant Far East Consortium International Limited is pondering the idea of a potential spinoff and separation of their listings of some of their hospitality projects in Australia, Singapore, the United Kingdom, and Malaysia. This is a move that the company is pondering hoping that it will create a new revenue stream while also bolstering their prospects for expansion.

far-east-consortium-considering-separate-listings-for-assets-minNo details of the plan were explained, however, the spinoff would likely include their six hotels that are currently operated in Malaysia, as well as the two in London and the one in Singapore. This is the Oakwood Premier OUE Singapore, which was recently acquired by the company.

It is expected that Far East Consortium would integrate its resort developments in Australia. They are a 25% joint venture partner in the Destination Brisbane Consortium which is currently developing the Queen’s Wharf Brisbane alongside The Star Entertainment Group and Chow Tai Fook at a cost of about 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.”

The first steps in this move may already be in the works. Hours after the filing, it was revealed that Far East Consortium is considering a real estate investment trust in Singapore that could raise as much is S$500 million ($365.44 million). According to a report, the Hong Kong-based company is already working with advisors to sell units mainly by hotels under the Dorsett brand.

The REIT sector in Singapore has become an attractive location for those looking to invest capital. Last month, the amount of capital raised through real estate listings reached an all-time high.

In addition, Far East Consortium has been very quick to acquire assets this year. Besides purchasing the Oakwood Premier OUE Singapore hotel, the company has also hosted $3.7 billion in trust IPOs over the past three years. They currently own and operate 28 hotels with a total of 7,500 rooms as well as 15 other properties.

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