Singapore-listed stapled security Far East Hospitality Trust (FEHT) (SGX:Q5T) announced on 22 September that it will be developing an 850-room hotel project on the resort island of Sentosa with sponsor Far East Organization (FEO).
The project is expected to cost SGD443.8 million and FEHT will hold 30% stake in the joint venture. The trust's share of the development will be funded by debt.
Development of the property came about after a March 2014 decision by the authorities to award FEO with the tender for the site located along Sentosa's Artillery Avenue.
The property will consist of two hotels - Outpost Hotel Sentosa and Village Hotel Sentosa. The latter is described as a family-oriented resort while the former is positioned as a more up-scale and stylish product.
The 60-year leasehold development will be FEHT's second investment since listing in August 2012.
FEHT highlighted several upcoming attractions on Sentosa, such as the Madame Tussaud's wax museum, as places of interest that will continue to draw visitors onto the resort island. "The hotels are well-positioned to benefit from Sentosa's continuous rejuvenation", said FEHT in an official statement on the proposed development.
Units of FEHT closed the trading day to end slightly lower by about half a percent on the Singapore Exchange at SGD0.81.