Singapore-based hotel company Far East Orchard has signed a memorandum of understanding (MoU) to acquire the hospitality management business of the Straits Trading Company (STC), including its Rendezvous hotel brand.
Far East currently operates eight upper-midscale hotels in Singapore, plus a range of serviced apartments, but recently announced plans to expand its reach into the Asian and Australian markets. The deal with STC would facilitate this, adding new properties in Singapore, Australia, New Zealand and China.
The MoU also gives Far East a 50% interest in three hotels in Australia, namely the Rendezvous Studio Hotel Perth Central, Rendezvous Grand Hotel Melbourne and Rendezvous Hotel Perth, while a separate transaction will see Far East Hospitality Trust acquire the Rendezvous Grand Hotel Singapore and its retail component, Rendezvous Gallery Singapore.
Speaking to Travel Daily yesterday, Far East Hospitality Management’s CEO, Arthur Kiong, said that while the deal had not been finalised, it had the potential to significantly boost the company’s portfolio.
“We are currently evaluating the transactions, and… there can be no assurance that the proposed transactions will proceed,” Kiong said. [But] if the proposed transactions are to proceed, it will allow the hospitality management business to grow beyond Singapore and also create a platform to operate a portfolio of third party hospitality assets. This expanded portfolio will consist of more than 30 hotels and service residences under five distinct brands and more than 6,000 rooms under management with a regional footprint across Australia, New Zealand, China, Malaysia and Singapore. This will potentially increase our flexibility in offering a wider breadth of concepts to suit leisure and business travellers,” he added.
Subject to due diligence and other approvals, the definitive agreements are expected to be signed after the financial year ending 31 December 2012.
Far East currently operates the Village, Oasia and Quincy hotel brands, with a portfolio comprising eight hotels and nine serviced residences, as well as the Sri Tiara Residences in Kuala Lumpur.