China’s Bright Ruby takes shine to $450m Sydney Hilton
The Hilton deal may set a record for an Australian hotel. Picture: James Croucher Source: News Corp Australia
CHINESE investment house Bright Ruby is set to make its largest Australian property acquisition with the purchase of the opulent Hilton Hotel Sydney for more than $450 million.
The investment house has won preferred buyer status to acquire the famous Sydney five-star property in the heart of George Street in a deal which will add to its burgeoning portfolio of international hotels and office towers.
Deep-pocketed Bright Ruby rocked the region’s hotel market in 2013 when it lavished S$1.1 billion for the Grand Park Orchard Hotel in Singapore.
Bright Ruby’s founding Du family from Shandong had won the backing of a coterie of Chinese investors to help it land the deal.
Bright Ruby is an experienced player in Australia, owning two office blocks in Sydney after going on a buying spree two years ago.
It purchased 10 Barrack Street for $62.5m and 231 Elizabeth Street for $201m and later showed interest in the $500m Sydney office and retail complex at 420 George Street.
The structure of the latest deal is yet to emerge but may set a price record for an Australian hotel if it beats the recent sale of Sydney’s Sheraton on the Park.
Chinese insurer Sunshine Insurance Group paid a record $463m for Sydney’s Sheraton on the Park hotel late last year, following in the footsteps of Korean group Mirae Asset Global Investments’ $340m purchase of the Four Seasons closer to Sydney Harbour.
Sunshine Insurance Group chairman Wei Gong Zhang told The Australian recently he was interested in hotels in Australia because of the nation’s sound economy.
“Our core concept of investments is (finding) good quality assets and secondly ensuring satisfactory returns,” he said.
Chinese investors are also active at the smaller end. One group secured the Sydney Conference & Training Centre on the northern beaches for about $12m in a deal negotiated by Colliers International.
JLL Hotels & Hospitality Group chief executive Australasia, Craig Collins, is negotiating the Hilton deal but declined to comment yesterday.
The Hilton transaction clears the way for Singapore’s sovereign wealth fund GIC to get its long mooted campaign for the sale of its Westin Sydney in Martin Place underway. Price expectations approach $500m for the five-star Westin hotel.
CBRE Hotels senior director, Wayne Bunz, said Singaporean groups were leading the hotel investment charge, having invested twice as much in Australian hotel properties than the next most active capital source, Hong Kong, followed by Malaysia and China respectively.
CBRE said groups such as Dalian Wanda, Intercontinental Hotels Group and Banyan Tree were among several operators looking to expand here.
Hilton could not be reached for comment last night.
Source: The Australian - 4th March 2015
