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Monday, September 15, 2008

Far East may sell Malaysian assets to REIT next year

FAR East Consortium International Ltd, a Hong Kong-listed hotel and property group, may sell Malaysian assets valued at over RM1 billion to a real estate investment trust (REIT) next year.

Sources said that pending favourable market conditions for a listing, the group is looking to buy more hotel and shopping complexes to be injected into the trust.

"They are getting the properties ready for listing ... but it will not be listed under current market conditions," a source said.

It is understood that due diligence on a majority of the properties that will be placed under the trust has been conducted.

"There is no rush to list the REIT. They are looking for more properties to be added to the REIT. Listing could be next year," the source told Business Times.

Far East has also delayed the listing of its planned REIT in Hong Kong, comprising seven hotels, to raise HK$4 billion (RM1.8 billion).

Despite a more favourable listing environment for REITs in Malaysia, announced during the tabling of Budget 2009, it is believed that Far East is still undecided whether it will list on Bursa Malaysia or Singapore Exchange.

Representatives of the company could not be reached for comment.

It was reported that Far East would include its properties and possibly even one property owned by Malaysia Land Properties Sdn Bhd (Mayland).

Far East and Mayland have a common shareholder in Tan Sri David Chiu Tat-cheong. Chiu is the deputy chairman of Far East.

Far East may sell Malaysian properties such as the four-star Dorsett Regency in Bukit Bintang, Kuala Lumpur, the five-star Sheraton Subang and the Grand Dorsett Labuan Hotel (previously known as Sheraton Labuan).

The recently completed Maytower Hotel Serviced Apartments and its new hotel in Johor Baru will also be part of the trust.

The existing hotels are said to be valued at about RM500 million.

Mayland's Hartamas Shopping Centre in Kuala Lumpur, which may be included into the REIT, could add another RM400 million to the size of the property trust.

By New Straits Times (by Vasantha Ganesan)

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