Hotel occupancy plummets as assets are sold down
It seems hotel real estate is not so hot property as investment companies and hotel groups sell their assets down in light of COVID-19.
One deal to look out for is Singapore-based investment house, Bright Ruby’s attempt to sell its largest Australian investment, Sydney’s Hilton Hotel, for $600 million.
Bright Ruby will be looking for a circa $200 million profit after it purchased the 570-room George St hotel for $442 million in 2015.
As we have previously reported Singaporean tycoon CK Ow, has recently listed his Sir Stamford Hotel which is in high demand due to its position near the Opera House and Hyde Park.
The Macquarie St property along with several other assets in his Australian and New Zealand portfolio have a $1 billion price tag, however it is likely the 1500 room hotel will be sold separately due to developer interest.
Another factor in the sell down is the Chinese government’s crackdown on mainland companies who have entered global real estate markets.
This has had a major impact on the aggressive expansion of Chinese developers from Greenland to Starryland who bought properties in Sydney, Melbourne and the Gold Coast only to have to sell down their Australian assets.
Greenland started the Chinese property boom in the Australian market in 2013, when it converted old public infrastructure into Sydney’s five star 172-room Primus Hotel.
The company sold the hotel this year for $132 million after initially asking for $170 million.
Due to COVID and bad politics between Australia and China, the increased competition is long over.
Such has been the impact, that hotel occupancies have plummeted to lows of 15-20 per cent across Australia.
Irit Jackson, 31st August 2021
