Starwood ponders sale of city Sheraton

US giant Starwood Hotels & ­Resorts is considering selling its last remaining Australian property asset, Sydney’s Sheraton on the Park, as well as its two Fijian hotels, as the company moves to adopt a global “asset-light” ­approach.

The US-listed Starwood ­Hotels & Resorts told analysts last month that it would pursue real estate asset sales around the world.

Starwood chief financial officer Vasant Prabhu said there were more buyers seeking to ­deploy larger amounts of capital into hotel portfolios.

“We think private equity is back. It had not been in the market before. Certainly, the sovereigns are back,” he said.

Mr Prabhu said there was ­interest in the group’s US assets and some parts of South America, as well as its Australian flagship. “We think there’s definitely a market for our hotel in Sydney,” he said.

In 2009, it was reported that Indonesia’s Rajawali Group, which has extensive hotel and resort interests, had made a play for the five-star Sheraton on the Park for more than $250m.

Yesterday, Sheraton on the Park managing director Sean Hunt would not comment on the 557-room Sydney hotel fronting Elizabeth Street, which the ­company has owned for more than two decades.

Agents said the hotelier was discussing the sale of the property along with two Sheraton-owned assets in Fiji, the Westin Denarau Island Resort and the Sheraton Fiji Resort, which would also face the chopping block.

Starwood has stressed that any sale of its assets to another party would only be agreed if the buyer signed a long-term management agreement.

Hotel analyst Dean Dransfield of Dransfield Hotels & ­Resorts said the Sheraton on the Park was a successful hotel ­because of its large number of rooms, good food and beverage outlets and the fact that it was run by its owner.

“Sheraton on the Park is ­supported by a good network of luxury Starwood hotels in Sydney, including the Four Points by Sheraton and the Westin Hotel,’’ Mr Dransfield said.

He said the Sheraton on the Park had received considerable head-office attention over the years with Starwood spending a lot of money refurbishing it. “As a consequence it’s very successful. It’s a very valuable asset,’’ he said.

Mr Dransfield said when the hotel hit the market it was likely to achieve a record price.

Meanwhile, expressions of ­interest in the Sofitel Hotel, being sold by LaSalle Investment Management, recently closed. The Sydney hotel is expected to fetch at least $200m.

Source:  The Australian - 3 April 2014