Crowne Plaza Perth snapped up by Singapore
A Singapore-based high net worth investment company has bought the 4.5 star Crowne Plaza Perth hotel overlooking the Swan River for $50 million.
It’s a deal that’s expected to put a rocket up the city’s struggling hospitality sector.
The company has obviously shrugged off Perth’s plunging room rates - average Perth hotel room rates fell 12 per cent last year to $170 a night and hotel analysts STR have recorded the Perth hotel occupancy rate in February at 77.7 per cent compared with 82.6 per cent a year ago.
But private Singapore company I-Power Management Pte Ltd has taken a long term view.
It is also ignoring the number of new hotels coming on to the market with the new Ritz-Carlton Hotel at Elizabeth Quay due to open in 2019 and the modular-built Tribe Hotel to be operated by Mantra Group, the 241-room DoubleTree by Hilton at Elizabeth Quay and the new five-star 350 room Westin Hotel in the CBD, all opening this year.
The firm zeroed in on the 191-room hotel on Terrace Road, operated by UK giant Intercontinental Hotels Group (IHG). The hotel was sold off-market by Hong Kong-backed Avant Hotels Australia.
The deal was negotiated by JLL Hotels & Hospitality director Mark Durran.
He said it was a good deal on price per room basis.
With very few luxury hotels available to purchase in Sydney and Melbourne, counter-cyclical investors are searching further afield for value opportunities," Mr Durran told the Australian Financial Review.
Singapore has been focusing closely on Perth. Singapore hotel tycoon Michael Kum's M&L Hospitality bought the last major hotel in Perth, the 256-room Novotel Langley Hotel on Adelaide Terrace for $80 million. That was sold by fund manager Alceon
Mr Durran forecast Brisbane would be the next hotel market that would attract investor interest.
The sale comes despite the warning from the Deloitte Access Economics' Tourism and Hotel Market Outlook report that Perth and Brisbane hotels will be squeezed by the "double-pinch of increased competition from new entrants and with relatively moderate demand growth".
by Leon Gettler, March 24th 2017
