Asian Investors Snap Up Hotels
The Australian Financial Review
07/07/2010Asian investors are continuing to dominate hotel buying in Sydney with metro Hotel Sydney Central selling last week for $39.5 million.
A Singapore-based trust purchased the hotel, which was formerly known as the Royal Gardens Hotel, beating off interest from a number of international and domestic parties.
The hotel sold after an expression of interest handled by Jones Lang LaSalle Hotels’ Mark Durran and Ross Beardsell.
The property’s former largest shareholder, the listed Transmetro Corporation, will continue to operate the hotel business for the new owner under its Metro Hotels brand. Transmetro had a stake of about 22 per cent in the property that sits on the corner of Pitt and Campbell Streets on an 848 square metre freehold site.
It features 220 guest rooms and suites together with a restaurant, bar and conference facilities for up to 200 guests. It is situated at the southern end of the Sydney CBD and is part of the city’s emerging southern precinct.
“This is the fifth major hotel in Sydney to sell in the past 12 months and all were purchased by Asian Investors. These sales represent almost $500 million of investment,” Mr Durran said.
Other major hotel transactions include the sales of the Sofitel Wentworth Sydney, Swissotel Sydney and Four Points by Sheraton. International giant LaSalle Investment Management snapped up the Sofitel Wentworth Sydney for $130 million in the largest single hotel sale of the year. Singapore magnate Michael Kum picked up both the Four Points by Sheraton and the Swissotel Sydney.
Mr Durran said: “It is clear that offshore investors are actively seeking hotel investment in Sydney because of its strong short to medium term trading outlook, benign new supply forecast, and excellent destination appeal being a gateway city.”
Transmetro and a syndicate including travel entrepreneur Ben Caplan bought Metro Hotel Sydney Central in March 2005 for about $34 million. Last month, Transmetro sold out of another hotel in Pitt Street it part owned – the Metro Hotel on Pitt, at 300 Pitt Street. It sold for $24.188 million to the Mah family, former owners of the Hydro majestic hotel in the Blue Mountains. They are yet to reveal their plans for the 115-room boutique hotel.
Transmetro and its partners had acquired the smaller hotel in 2003 for about $16.5 million
Mr Durran said that the offer of Metro Hotel Sydney Central had been a rare one in Sydney’s mid-market hotel segment. “It is one of the few new mid-market hotels, especially with so few developments coming on stream,” he said and added that the sale boded well for the medium to long term hotel investment climate.
