I took a quick glance at the draft IPO prospectus.
Just the structure alone, its is much better than the Ascendas Hospitality Trust where all the hotels are parked under the Hotel Reit and not under the business trust.
According to the email, the price will range from 86c (6% annualised yield) and 93c (6.5% annualised yield) for FY 12E.
The presence of reputable cornerstone investors are also very reassuring and it will be them who will dictate the pricing.
CDL H-Trust is trading at 5.7% yield and Ascott Residence Trust is trading at 7.2% yield. In this regard, my only complaint is that the yields are on the 'low side'. It will be good if Far East can leave some meat on the table by pricing the issue at the mid to lower end of 86 cents. If it prices it at 93c, i am afraid the upside is probably limited. My guess is 88c ? :-P
Anyway, with regards to this email, probably i will ask for some allocation and hope that it will be priced at the lower end. The hotels are mid-scale but well-located (mostly) within the Orchard area except for one Changi Village Hotel... :-P
Happy IPOing. I will give the chilly ratings when the final pricing is out but it will likely be either 1 or 2 chillis rating.
Subsequent update to this post
Please find a fact sheet about this IPO from OCBC.
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