Far East Hospitality Trust

Far East Hospitality Trust: Far East Organization is launching the Scotts Medical Center, which is slated to open its doors at Pacific Plaza next year, and will join a number of other buildings in the Orchard vicinity with private clinics, such as Paragon, Mount Elizabeth Medical Centre, Ngee Ann City and Lucky Plaza. The upcoming medical centre will cover floors 6 – 12 of Pacific Plaza, offering 44 medical suites spanning a total lettable area of 36k sf ft. Renovation works are slated for completion in 1Q13. The medical suites will range in size from 545 - 1,493 sf, but can be combined to accommodate bigger clinical practices. The Business Times understands that FEO could be looking to charge ~$15 psf for rental. This compares with $10-$12 psf at Lucky Plaza. Far East is said to be trying for a mix of different specialties, including aesthetics and traditional chinese medicine. This medical centre is one asset that FEH Trust could fit into its acquisition pipeline, once rentals stabilize. FEH Trust trades at 6.1% FY13e yield, 1.05x P/B.