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FEC planning a spin-off of REIT business
Posted on Friday, 29 November 2019 07:23
Far East Consortium International (FEC) has announced plans to spin off and separately list certain hospitality properties to be formed into a real estate investment trust (REIT).
The Hong Kong-headquartered company said the assets are located in Singapore, Australia, Malaysia and the UK and, if a deal is successful, would create an asset management platform for the group to generate a new income stream.
Financial terms of the potential share sale were not disclosed; however, people close to the situation told Bloomberg FEC is hoping to raise as much as SGD 500.00 million (USD 366.10 million).
According to these sources, a listing is expected to be held in Singapore and is likely to take place in the first half of next year.
FEC is said to also be working with advisors on the sale of trust units backed by hotels under the Doresett brand.
Earlier this month, the company announced the acquisition of a hotel in Singapore.
FEC owns 28 operating hotels with around 7,500 rooms, with a further 15 properties in development, according to its full-year results announcement at the end of March 2019.
The company generated a 17.3 per cent improvement by revenue to HKD 6.80 billion (USD 868.61 million) in the year to 31st March 2019, with gross profit of HKD 3.00 billion and a gross margin of 43.9 per cent in the same timeframe.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 15 initial public offerings of lessors of non-residential buildings announced worldwide since the start of 2019.
In the biggest of these, the We Company, an online coworking and office space rental services provider, is looking to raise USD 1.00 billion in its stock market flotation.
China Merchants Commercial Real Estate, Adapteo, Lotte REIT and Lendlease Global Commercial REIT, among others, have also announced plans to go public in the year to date.
© Zephus Ltd