Far East Hospitality Trust eyes Rendezvous Grand Hotel Singapore
Far East Hospitality Trust and Astor Properties, a member of the Far East Organization group, have entered into a non-binding memorandum of understanding (MOU) with The Straits Trading Company (STC) to acquire Rendezvous Grand Hotel Singapore and its retail component Rendezvous Gallery Singapore.
Far East H-Trust is exploring the proposed acquisition of a leasehold interest in the property, while the Far East Organization is exploring the proposed acquisition of the reversionary interest for the remaining leasehold period in the property.
Far East H-Trust has also entered into a separate non-binding MOU with the sponsor to grant a master lease of the hotel component to the Far East Organization.
The REIT manager is looking at options to finance the proposed acquisition of the property, including debt financing and/or the issuance of stapled securities in Far East H-Trust (including consideration securities). The proposed transactions are also subject to satisfactory due diligence, relevant valuations being carried out, the receipt of the requisite approvals and definitive agreements being negotiated, finalized and executed by the parties. No definitive agreements have been executed, and accordingly, there can be no assurance that the Proposed Transactions will proceed.
If the proposed transactions were to proceed, the definitive agreements will be signed after the financial year ending December 31 2012.
Gerald Lee, chief executive officer of FEO Hospitality Asset Management ,the REIT manager, said, “The proposed acquisition underscores our strategy to actively seek third party properties to grow our Trust, in addition to tapping on the strong pipeline of assets from our sponsor. Our intention is to continue to expand to realize greater economies of scale, broaden our earnings base, and make our portfolio more resilient so that Far East H-Trust remains well-positioned to deliver stable returns to its stapled securities holders.”
Rendezvous Grand Hotel Singapore is a modern 4.5 star hotel with 298 rooms located in Singapore’s commercial and cultural district at Bras Basah. Rendezvous Gallery Singapore, the hotel’s revamped retail wing, has three levels of retail space dedicated to dining.