In the case for SUntec Reit, new shareholders will get a chance
to invest in a prime property with stable returns. On top of that,
since the value of the property is subject to market fluctuations,
there is a chance that the value could go up considerably if the
returns consistently beats Analyst forecast.
Let me give you an analogy for raffles. Lets say you own a business
with a great potential for growth. However, growing that buisness
comes with associated risk which, although, you can afford , you
dont want to undertake. So whats the solution? Sell the business
away at a super good price to somebody who is experienced in
undertaking the risk!
Colony Capital already owns and manages 19000 hotel rooms in the US
alone. TO them, Buying over the raffles brand is a good way to
acheive a headstart rather than setting up their own brand of
hotels in SIngapore.
So its a win win situation for all parties involved. The buyer
gains, the company earns and the shareholders walk away richer.
