Far East Orchard looks to sell Rendezvous Hotel Perth Central for A$18.5 million
HOTEL operator and property developer Far East Orchard (FEOR) announced on Monday (May 6) that its subsidiaries are selling Rendezvous Hotel Perth Central and its business for A$18.5 million (S$16.5 million).
The sale option has been entered between Far East Hospitality Properties (Australia) (FEHPA) and Rendezvous Hotels (Australia) (RHA) with the buyers from Chesterfield Property Group and Mountstreet Operations.
“The sale price was arrived at after arm’s length negotiations and on a willing-buyer and willing-seller basis, after taking into consideration the prevailing market conditions and the valuation,” said FEOR.
The option agreement may be exercised by the buyers between May 6 and Aug 30, with an option fee of A$50,000 payable to FEHPA and RHA, which will be set off against the deposit, FEOR added.
FEOR said the disposal of the hotel is “in the interest of the group”. It said the disposal will enable the group to realise the value of the hotel, and in turn, improve capital allocation and optimise returns for the company’s shareholders.
“The improved liquidity would also allow the group to take advantage of any opportunities that present itself in the near future”.
Another reason for the sale would be the gain on disposal to the group, where the net sale proceeds and book value, estimated at A$6.7 million, will be recognised in the group’s consolidated statement of comprehensive income for the financial year ending Dec 31, 2024, it said.
The hotel is a 103-room freehold property located at 24 Mount Street in Perth, Australia. It is owned by FEHPA and leased to RHA.
Shares of Far East Orchard closed flat at S$1.02 on Monday.
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