Far East Consortium Said to Consider Singapore REIT IPO

(Bloomberg) -- 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 ($365 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 earlier today, the company confirmed it is mulling a “potential spinoff and separate listing of certain hospitality properties” on an overseas securities exchange. The assets are in Australia, Singapore, Malaysia and the U.K, 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 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 development in Singapore for S$289 million in September. Far East shares rose as much as 1.2% on Thursday.

Singapore has hosted $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% this year, outpacing the 4.5% 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.

The company, led by Chief Executive Officer David Chiu, has a market value of HK$8.1 billion ($1 billion) in Hong Kong. It owns the hotels through its Dorsett Hospitality International Ltd. unit, which it took private in 2015.

A representative for Far East Consortium didn’t immediately respond to requests for comment.

--With assistance from Shawna Kwan.

To contact the reporters on this story: Ishika Mookerjee in Singapore at imookerjee@bloomberg.net;Joyce Koh in Singapore at jkoh38@bloomberg.net;Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, ;Lianting Tu at ltu4@bloomberg.net, Philip Lagerkranser, Ben Scent

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