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F&N Considering REIT for Serviced Apartments, Charoen’s Hotels

Fraser & Neave Ltd. (FNN), the real-estate developer that was the target of a takeover battle last year, is considering setting up a real estate investment trust made up of hospitality assets.

The company is “still evaluating the feasibility of launching a hospitality REIT,” Chief Financial Officer Hui Choon Kit said in response to Bloomberg queries about its plans.

Thai tycoon Charoen Sirivadhanabhakdi won control of F&N earlier this year, after his S$13.8 billion ($10.9 billion) offer edged out a bid from Overseas Union Enterprise Ltd. F&N, whose businesses range from soft drinks to shopping malls, said in June it may consider separating its property arm from its other businesses.

F&N is assessing proposals from investment banks seeking to manage a possible initial public offering of the REIT, which may take place next year, said three people with knowledge of the matter, asking not to be identified as the information is private. The IPO could include serviced apartments that operate under the Frasers Hospitality brand and hotels owned by Charoen, the people said.

The company’s property portfolio includes residential projects, shopping malls and business parks. It also consists of Fraser Centrepoint Trust, a retail real estate investment trust, and Frasers Commercial Trust (FCOT), which holds office properties located in Singapore, Australia and Japan.

Frasers Hospitality has properties around the world, and plans to open more serviced apartments in Europe, North America, the Middle East and Asia, according to its website. Under Bangkok-based TCC Land Group, TCC Assets has hotels in Asia, Australia, Europe and North America, which include the InterContinental hotel in Singapore, Le Meridien in Bangkok and Plaza Athenee in New York, its website states.

Recent hospitality IPOs haven’t performed well. Both Far East Hospitality Trust (FEHT) and Ascendas Hospitality Trust (ASHT), which made their trading debuts in 2012, have slumped about 15 percent this year. OUE Hospitality Trust (OUEHT), which listed last month, is unchanged.

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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