Buyers circle $200m Sydney Sofitel
Atleast a dozen Asian private equity and developer groups are jockeying to buy the landmark Sofitel Sydney Wentworth Hotel, in a sign foreign cash is still paying attention to the Australian hospitality sector.
Singapore hotel owner CDL is among the frontrunners for the 436-room, heritage-listed hotel, along with Korea’s Millennium Group and Indonesian private equity player Sunardi Loekman. Price expectations are at least $200 million. Previously known as the Wentworth Hotel, the Sofitel was put on the market by the $US3 billion ($3.2bn) LaSalle Investment Management group last October — three years after the fund bought the Phillip Street hotel for about $130m.
Of the potential buyers, CDL is probably the most cashed up. Its hotel arm, Millennium & Copthorne Hotels, is one of the largest hotel operators and owners in the world, listing on the London Stock Exchange in 1996. Hotels under its ownership include the luxe St Regis Singapore, Millennium Hilton Bangkok and the W Singapore Sentosa Cove.
Mr Loekman is a New Zealand-based private equity investor controlling a considerable Australasian hotel portfolio including Wellington’s InterContinental, which he recently bought for about $NZ50m ($46.4m). Mr Loekman’s Colwall Property Investments also owns Auckland’s Crowne Plaza Hotel, while an affiliate company controls Rotorua’s Novotel and Ibis hotels bought for $NZ43m.
Jones Lang LaSalle Hotels and McVay Real Estate are handling the Sofitel sale.
With more than $2bn in hotel and resorts sales in Australia last year and $7bn in Asia it is clear that international capital markets are much more open to hotel investment than they once were, said Dransfield Hotels & Resorts hotel analyst Dean Dransfield yesterday.
“The types of buyers also seem much more open to development or the substantive reuse of buildings, which reflects their confidence in the outlook for the market,’’ Mr Dransfield said.
He added that the Sofitel was seen as an “opportunity site” both in terms of physical development and working with the operator.
“Sofitel has a long-term agreement over the hotel, the buyer could work with Accor to improve the positioning with capital expenditure. (But) the trick is finding a way to do that within the heritage constraints.”
The Sofitel is one of the first major hotels offered this year. Starwood is expected to soon list its Sheraton on the Park property on Elizabeth Street.
Source: The Australian - 10 April 2014
