Far East Consortium, a construction giant, is thinking about listing some of their projects separately in Singapore, Australia, Malaysia, and United Kingdom. This is a strategy the firm is thinking about to boost its revenues while bolstering the chance to grow even more significant.
No more information about this plan was provided, but this spinoff will most likely include the six hotels the firm owns currently being run in Malaysia, two located in London, and one more in Singapore.
The Reit Sector in Singapore has attracted a lot of mergers and capital raising in 2019. Capital raising on the part of listed firms hit a record high in November, and now consolidation seems to be gathering momentum with the latest collaboration this past Thursday between Industrial Trust Fraser and Fraser logistics.
Far East has also been on a snapping mission this year, with its most recent acquisition being OUE Ltd’s Hotel as well as service apartment site in Singapore for about S$289 million this September. The firm’s shares went up 1.2 percent this Thursday.
This marks a common trend in Singapore. It has hosted more than US$3.7 billion worth of property IPOs over the past three years. The REITs Index has gone up 18 percent in 2019, which outpaced the 4.5 percent benchmark.
The company is also looking to integrate all its resorts in Australia. The firm also owns 25 percent of the Destination Brisbane Consortium currently working on the Queen’s Wharf Brisbane alongside Chow Tai Fook and The Star Entertainment Group and is expected to cost AU$ 3.6b on completion.
In a recent filing with Hong King’s Stock Exchange, the firm stated that its board believes the intended spinoff and listing of assets separately would create an asset management system for the hospitality sector, and this would generate better income streams for the firm. The board also believes this move would unlock and boost the value of the firm’s properties and facilitate an active hotel acquisition process courtesy of the spun-off assets.
The initial stages of this process are in the pipeline. A few hours after filling with the stock exchange in Hong Kong, the firm also revealed that it is thinking of investing in real estate trust within Singapore to raise $500 million. As stated on calvinayre, the firm is currently working with different advisors to sell units under the Dorsett brand.
In the past, Far East Consortium has owned about 28 hotels with a total capacity of 7500 rooms as of March of this year, and a further 15 new properties are in the works; this is based on the firm’s full-year report. Most of the unique properties will be located in the city of Hong Kong, while the rest of the properties will be scattered across Malaysia, Mainland China, Europe, and Australia.
At its current pace, the firm is likely to begin 2020 on a fantastic note, and its revenues will be more significant than it has been in the past few years.