Far East Hospitality to buy Oasia Hotel Downtown for S$210 mln

Oasia Hotel Downtown
Oasia Hotel Downtown. company's website

Far East Hospitality Real Estate Investment Trust (Far East H-REIT) on Friday said it entered into an agreement with Far East SOHO to acquire a 65-year leasehold estate in Oasia Hotel Downtown for S$210 million.

Oasia Hotel Downtown is a 314-room upscale hotel located in Singapore's central business district in the downtown Tanjong Pagar area. The Property is minutes away from Robinson Road, Shenton Way, Raffles Place, Chinatown, Marina Bay and Sentosa.

The deal value is at the lower end of two independent valuations from Knight Frank and Savills Valuation, the company said in a regulatory filing.

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The proposed acquisition would be accretive to the distribution per stapled security of Far East H-Trust for the nine-month period ended September 2017, the company said.

"The proposed acquisition of Oasia Hotel Downtown demonstrates the REIT Manager's commitment to enhance the total return to Stapled Securityholders as well as increase potential opportunities for future income and capital growth through acquisitions of quality hospitality assets," Gerald Lee, Chief Executive Officer of the REIT Manager said in a statement.

The company intends to fund the acquisition through debt facilities and Far East Hospitality Trust's distribution reinvestment plan proceeds.

Upon completion of the deal, the property will be leased to Far East SOHO for an initial term of 20 years with an option for a further 20 years under a master lease agreement.

Shares in Far East Hospitality Trust fell 0.7 percent to S$0.71 on the Singapore Exchange.

This article was first published on January 12, 2018