Far East Orchard mulls over joint venture business in Australia

The JV company will own Toga's hospitality unit.

According to a release, Far East Orchard Limited has signed a non-binding memorandum of understanding (MOU) with Toga Pty Limited (“Toga Group”) to explore the establishment of a Joint Venture (JV) Company in Australia which will own the hospitality management business of the Toga Group and hospitality assets in Australia (“Proposed Joint Venture”).

Under the MOU, FEOrchard will subscribe for shares in the JV Company which will hold the hospitality management business of the Toga Group.

The JV Company will also explore the acquisition from the Toga Accommodation Fund (“TAF”) of 100% interest in two hotels and three serviced apartments in Australia.

These five properties, with a total inventory of more than 700 units, are located in Sydney, Adelaide, Brisbane and Darwin.

Established in 1963, the Toga Group is one of the largest hospitality operators in Australia with hospitality management contracts to operate approximately 6,700 rooms across 50 hotels and serviced apartments in Australia, New Zealand, Germany and Denmark.

The Toga Group’s hospitality management business operates under four strong and prominent brands strategically positioned in the value and mid-market segments, of which, the “Medina”, “Adina” and “Vibe” brands are wholly-owned and the “Travelodge” brand is licensed.

The TAF, of which Toga Group owns 20%, is an unlisted property fund that invests in serviced apartments and hotel assets in Australia and Europe operated by the Toga Group.