Singapore trust pockets $109M in Sydney hotel divestment
CapitaLand Ascott Trust (CLAS) has sold two suburban hotels in Sydney making $109 million in the process.
The Singapore trust offloaded the 196-room Courtyard by Marriott Sydney-North Ryde and the 194-room Novotel Sydney Paramatta – a 2674sqm site.
Both hotels are ripe for renovation.
The hotels were sold to Chinese-owned Silversea Investments, which currently has a portfolio of three suburban hotels, not including its recent acquisitions.
CapitaLand has offloaded the properties at around 5 per cent above book value, with the sale to be completed late next year.
CBRE agents Michael Simpson and Vasso Zographou were behind the sale. Simpson said the Paramatta property was important for the growth in Greater Western Sydney.
Of the Marriott property he said, “the Courtyard by Marriott North Ryde will continue to service the ever-expanding Macquarie Business Park which provides a decentralised corporate solution to current work trends.”
On explaining the sale, CLAS Management chief executive Serena Teo said, “CLAS remains focused on assets that offer better yields and will further uplift the value for our portfolio. As additional capital will be required to upgrade these two mature properties, the divestment will enable us to redeploy the proceeds into more optimal uses such as but not limited to paying down debt and funding our other asset enhancement initiatives.
“The exit yield is also at an attractive level that compares favourably against the current cost of borrowing in Australia.”
CLAS has been on a diversification spree recently, offloading four serviced residences in regional France on an exit yield of about 4 per cent. Funds from the sale will go towards the acquisition of three prime lodging assets in London, Dublin and Jakarta.
Despite its most recent divestment, Australia remains a key market.
“Post-divestment, our remaining seven serviced residences and hotels under management contracts will enable us to capture the travel demand while our five serviced residences under master leases will continue to provide us with stable income,” she said.
CLAS still holds 12 serviced residences and hotels in Brisbane, Melbourne, Perth and Sydney.
Jonathan Jackson, 7th November 2023
