Far East Consortium Ponders Over Separate Listings For Assets

Construction giant Far East Consortium International Limited is considering the idea of a potential spinoff and separating their listings from some of their hospitality projects in Australia, Singapore, the UK, and Malaysia. This is a move that the company hopes will create a new revenue stream while also strengthening their prospects for expansion.

No details of the plan were explained, however, their six hotels currently operating in Malaysia, as well as the two in London and one in Singapore would probably be included in the spinoff. This is the company’s recent acquisition of Oakwood Premier OUE Singapore.

Far East Consortium is expected to integrate Australia’s resort developments. They are a 25 percent joint venture partner in the Destination Brisbane Consortium that 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 crystallise 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.”

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

In Singapore, the REIT sector has become an attractive location for those seeking capital investment. Last month, an all-time high was reached by the amount of capital raised through real estate listings.

Furthermore, this year’s Far East Consortium was very quick to acquire assets. The company has also hosted $3.7 billion in trust IPOs over the past three years, in addition to buying the Oakwood Premier OUE Singapore hotel. A total of 7,500 rooms and 15 other properties are currently owned and operated by 28 hotels.