Far East Hospitality Trust (Far East H-Trust) (SGX:Q5T) has entered into a sale and purchase agreement with The Straits Trading Company Limited to acquire Rendezvous Grand Hotel Singapore and Rendezvous Gallery for S$264.3 million. This is Far East H-Trust’s first acquisition since its initial public offering in August 2012.
|Rendezvous Grand Hotel and Rendezvous Gallery to be Acquired by Far East H-Trust|
Rendezvous Grand Hotel Singapore and Rendezvous Gallery are located in the heart of Singapore’s commercial and cultural district at 9 Bras Basah Road. The hotel, which is in close proximity to the central business district and Orchard Road, serves both business and leisure travellers.
The properties are located within walking distance to the Dhoby Ghaut, City Hall and Bras Basah MRT stations and the future Bencoolen MRT station, the Property underwent a major refurbishment programme of its guest rooms and public areas between 2011 and 2012.
The refurbishment programme also created the new retail wing, Rendezvous Gallery, which has three levels of retail space dedicated to food and beverage outlets with a net floor area of 2,295 square metres.
Mr Gerald Lee, Chief Executive Officer of FEO Hospitality Asset Management Pte. Ltd., said “We are pleased that Straits Trading Company elected to divest this attractive hotel to us. This acquisition will further strengthen our portfolio of quality hospitality assets in Singapore. It will enable us to benefit from greater economies of scale and broaden our earnings base, as well as favorably enhance our portfolio exposure to the growing hospitality market.”
This acquisition is expected to be yield accretive and will be financed by the proposed issue of new stapled securities in Far East H-Trust to Straits Trading Company as well as additional debt facilities. Far East H-Trust however has provided no further details on what these debt facilities may be.
Far East Hospitality Real Estate Investment Trust (“Far East H-REIT”) will acquire a leasehold interest of 70 years in the Property, while Serene Land Pte Ltd, a member of the Sponsor will acquire the reversionary interest for the remaining leasehold period of approximately 10 years.
The REIT is expected to hold and EGM in due course to iron out further details of the master lease for the property.