Far East Consortium mulling S$500m Singapore Reit IPO

Singapore

FAR EAST Consortium International Ltd, the Hong Kong developer, is considering a real estate investment trust listing in Singapore that could raise as much as S$500 million, people with knowledge of the matter said.

Hong Kong-based Far East Consortium is working with advisers on the potential sale of trust units backed mainly by hotels under the Dorsett brand, the people said. The initial public offering could take place as early as the first half of 2020, according to two of the people, who asked not to be identified because the details are private.

In a Hong Kong stock exchange filing on Thursday, the company confirmed it is considering a "potential spinoff and separate listing of certain hospitality properties" on an overseas securities exchange. The assets are in Australia, Singapore, Malaysia and the United KIngdom, it said. Singapore's Reit sector has attracted a wave of capital raising as well as mergers and acquisitions this year. Capital raising by listed real estate trusts hit a record last month, and consolidation is gathering pace with the latest deal to emerge on Thursday, involving Frasers Logistics & Industrial Trust and Frasers Commercial Trust.

Far East Consortium has been snapping up assets this year, most recently buying OUE Ltd's hotel and serviced apartment site in Singapore for S$289 million in September. Far East shares were up 1.2 per cent on Thursday.

Singapore has hosted US$3.7 billion of property trust IPOs over the past three years, according to data compiled by Bloomberg. An index of Reits listed in the city has risen more than 18 per cent this year, outpacing the 4.5 per cent gain in the benchmark Straits Times Index.

Far East Consortium owned 28 operating hotels with about 7,500 rooms at the end of March, with a further 15 properties in the development pipeline, according to its full-year results announcement. Most of them are concentrated in Hong Kong, with the rest spread across mainland China, Malaysia, Singapore, Australia and Europe. BLOOMBERG

READ MORE: ThaiBev said to be eyeing mega-listing of its regional beer assets in Singapore