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Far East Hospitality makes first hotel acquisitions in Europe

August 5, 2014 Hotel News No Comments Email Email

Far East Orchard Limited‘s (FEOrchard) hospitality arm, Far East Hospitality Holdings Pte Ltd (Far East Hospitality) has today, acquired 50% interests in a portfolio of property companies which own four hotel properties in Europe.

This is a move that will boost income and expands FEOrchard‘s footprint in the hospitality ownership business into the European market.

Together with its joint venture partner Toga Group, Far East Hospitality will jointly acquire interests in a portfolio of companies from Toga Accommodation Fund (TAF) (TAF Property Companies). In addition, Far East Hospitality will purchase a 50% interest in a separate portfolio of companies from Toga Group (Toga Property Companies). TAF Property Companies holds three hotels, namely Adina Apartment Hotel Berlin http://www.footstepsinasia.com/Checkpoint Charlie, Adina Apartment Hotel Frankfurt Neue Oper, and Adina Apartment Hotel Copenhagen. Toga Property Companies hold one hotel, the Adina Apartment Hotel Berlin Hauptbahnhof. The four hotels, located in Berlin and Frankfurt, Germany and Copenhagen, Denmark, have been independently valued with an aggregate valuation of approximately €107.1 million.

The hotels are currently operating under an umbrella brand of ‗Adina Apartment Hotels‘ by Toga Far East Hotels (TFE Hotels), the joint venture between Far East Hospitality and Toga Group. TFE Hotels is one of the largest hospitality management platforms in Australia.

In 2013, international tourist arrivals globally grew by 5% to reach a record 1.1 million. Europe benefited the most from this growth, receiving 29 million more arrivals than in 2012, a 5% gain. Russia and China were Europe‘s largest source markets in 2013.1

Commenting on the acquisitions, Mr Lucas Chow, FEOrchard‘s Group Chief Executive Officer and Managing Director, said: ―We are delighted that FEOrchard has made its first asset acquisitions in Europe, continuing our expansion plans from the string of hospitality transactions in Australia last year. We believe that this transaction sends a strong signal of our capability to rapidly seize opportunities and leverage on the synergies offered by our joint venture partner, Toga Group.‖

The purchases of the European hotels came hot on the heels of the joint venture TFE Hotels‘ recent acquisitions of two office buildings in Sydney and Brisbane for hotel conversion in the last two months – (1) A 13-level office property (280 George Street) in the Sydney central business district in June; and (2) A heritage-listed building in Brisbane‘s CBD (171 George Street) last month. TFE Hotels continues to actively pursue growth opportunities across Australia through both the hospitality management and ownership businesses.

Chief Executive Officer for Far East Hospitality, Mr Arthur Kiong, said: ―The acquisition of these four hotels in Germany and Denmark will further strengthen our foothold in Europe and sets the platform for us to pursue more opportunities for the Group in the future. We are optimistic of Europe‘s ability to attract tourist arrivals globally as Europe remains the world‘s largest tourism region. Our European properties will stand to benefit from the growing optimism of the recovering European economy. Together with the recent property acquisitions in Australia by our joint venture, TFE Hotels, Far East Hospitality is on a trail to create new growth platforms to transition into a leading regional player. These acquisitions in Europe and Australia mark our strong partnership with our joint venture partner, Toga Group, as we celebrate our one year anniversary this month and we believe there will be more of such opportunities ahead.‖

Through these acquisitions, Far East Hospitality continues to create a strong foundation for new growth platforms to transition the company into a leading regional player with strong recognition for its umbrella of hotels and serviced residences brands.

The hospitality business is and will continue to contribute a steady flow of recurring income to Far East Orchard Limited, creating meaningful value to shareholders.

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