Ascendas Hospitality Trust sells Pullman hotel for A$75.1m

Singapore-listed Ascendas Hospitality Trust (A-HTrust) Friday announced that it had sold the Pullman Cairns International hotel in Cairns, Australia, which it co-owns with TMG Developments, for A$75.1 million.

Photo : Ascendas Hospitality Trust website

It has sold this 321-room hotel to Shakespeare Property Group.

The sale price represents a premium of 12.1 per cent to the hotel’s latest valuation of A$67 million as of 31 March 2015, and the deal is line with A-HTrust’s strategy “to evaluate asset plans for the portfolio and, and free up or recycle capital for more productive use”, the company said.

Tan Juay Hiang, chief executive officer of the Managers, said: “The divestment of Pullman Cairns International, the only hotel in A-HTRUST’s portfolio that is not wholly owned, is consistent with our proactive approach in managing and evaluating asset plans for the portfolio. Given its location in one of the smaller cities in Australia, which is predominantly a vacation destination, Pullman Cairns International does not entirely fit into the profile of A-HTRUST’s portfolio. This was a key factor for the divestment.”

“We are pleased to arrive at the agreed consideration of A$75.1 million , which translates to a selling price of approximately A$223,000 per room key….and also represents a premium of approximately 27 per cent to the average independent valuation of Pullman Cairns International of A$59.0 million,  for the purpose of A-HTRUST’s listing in 2012,” Hiang added.

It will use part of the proceeds to repay existing debt which will provide A-HTRUST with greater financial flexibility, the company’s statement added. Up to S$2 million of the proceeds will be paid to shareholders.

After the sale, A-HTRUST continues to own six hotels in Australia.

Source: Deal Street Asia    May 15th 2015