Frasers’ Sofitel Sydney Wentworth Hotel put into trust for $224m
The company, controlled by Thai tycoon Charoen Sirivadhanabhakdi, last month sold a major Melbourne office tower, 357 Collins Street, into its commercial property trust for $222.5m.
That was the biggest trade in Melbourne’s office market this year and the Sydney move was the second-largest hotel sale in the city this year, after Bright Ruby’s $442m purchase of the Hilton.
It could be further trumped with the impending sale of the Westin Sydney, on which parties put in final bids last Friday. Frasers Hospitality Trust’s purchase of the five-star hotel, which has 436 rooms, was its first move since listing last year. The Singapore-listed trust struck a deal to acquire a 75-year leasehold interest in the property.
“Sydney was one of the strongest performing hospitality markets in Australia in 2014 and the outlook remains positive in 2015. The acquisition of Sofitel Sydney Wentworth is a rare opportunity to acquire a prime asset in a tightly held market,” the chief executive of the REIT manager, Ms Eu Chin Fen, said.
The trust’s portfolio will jump from about $S1.66 billion ($1.6bn) to about $S1.9bn after the deal.
“The addition complements our existing Fraser Suites Sydney and the Novotel Rockford Darling Harbour,” Ms Eu said. “All three properties are located in strategic catchment areas in Sydney and enable us to benefit from the strong hospitality market in Sydney.”
Frasers Centrepoint bought the hotel for $202.7m from LaSalle Investment Management a year ago and analysts had tipped that it would end up in the hotel real estate investment trust.
The hotel was independently valued by Savills and JLL as part of the latest deal, with the rise reflecting the strength of the market. Last year, hotels in Sydney registered revenue per available room growth of 4.2 per cent, making it one of the strongest markets in Australia. The Sofitel had occupancy levels of 87.6 per cent and RevPAR of $193.70.
The hotel will continue to be operated by Accor under its luxury Sofitel brand.
Source: The Australian - 12th May 2015
