Includes retail centre Rendezvous Gallery.
Far East Hospitality Trust (Far East H-Trust) announced that it has entered into a sale and purchase agreement with The Straits Trading Company Limited (STC) to acquire Rendezvous Grand Hotel Singapore and Rendezvous Gallery (together, the Property) for S$264.3 million. This is Far East H-Trust’s first acquisition since its initial public offering in August 2012.
The Property is 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.
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. Today, its 298 hotel rooms and suites are equipped with state-of-the-art amenities and custom-designed furniture catering to the needs of business and leisure travellers. 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 STC 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 favourably enhance our portfolio exposure to the growing hospitality market.”
This acquisition is expected to be yield accretive. Details of the expected higher distribution per stapled security, together with the relevant assumptions, will be set out in the Circular (as defined below).
The purchase consideration for the Property, together with other transaction-related expenses, will be financed by the proposed issue of new stapled securities in Far East H-Trust to STC, the Sponsor, as well as debt facilities.
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.
Far East H-REIT will also enter into a separate master lease agreement with Serene Land Pte Ltd to grant a master lease of the hotel component to Serene Land Pte Ltd for an initial term of 20 years with an option for a further 20 years (the Master Lease).
The grant of the Master Lease and the placement of new stapled securities to STC and the Sponsor are subject to the approval of stapled securityholders at an extraordinary general meeting (EGM) to be convened.
A circular is expected to be issued to stapled securityholders (the Circular) in due course, together with a notice of the EGM to be held.
Far East H-Trust to acquire Rendezvous Grand Hotel Singapore for $264.3m
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