Browse Directory

Hotel sell off cancelled


by Leon Gettler

Singapore based real estate investment trust (REIT) Ascendas has shelved plans to sell its $1.4 billion hotel portfolio.

The platform, which includes 11 ­hotels with 4200 rooms, with footholds in China, Singapore and Japan including Park Hotel Clarke Quay in Singapore and Novotel Beijing Sanyuan in China and seven local hotels, including the Pullman Sydney Hyde Park, and the Pullman and Mercure Melbourne Albert Park, had attracted strong investor interest.

“After evaluating the proposals, the managers have decided not to proceed, and have ceased all discussions in relation to, the transaction,” the group said in statement.

“The managers will continue to work towards growing and enhancing the portfolio of [the trust] to deliver value and sustainable returns.”

Bidders had includedprivate equity giant Blackstone.

Others lobbing bids included Starwood Capital Group, Hong Kong’s Gaw Capital Partners, Chinese billionaire Guo Guanchang’s Fosun International and a group lead by Varde Partners.

All this is happening at a time of large-scale hotel sell-offs around the world.

One that has been getting a lot of attention has been the Kum family’s M&L Hospitality portfolio, which is now going through a $2 billion sales campaign.

M&L has a 2089-room hotel portfolio.

It includes Sydney’s Sheraton Four Points and Melbourne’s Hilton DoubleTree.

It’s a portfolio that generates annual earnings of more than $100 million and accounts for more than 18 per cent of Sydney’s CBD hotel market.

M&L Hospitality’s financial advisers are investment banks UBS and Rothschild.

There has been very little news and publicity around the sales process but it has attracted global attention, simply because of the scale of the offer and the strong performance of the Australasian industry.

Investors were less than enthused when Ascendas announced the news that it had pulled the pin. Ascendas Trust units fell a whopping 13.7 per cent to 66 Singapore cents following the announcement, the biggest fall since July 2012.

 

7th April 2016