Sofitel Wentworth sale heralds new round of Asian investment

The sale of the Liberal Party’s preferred hotel in Sydney, the Sofitel Wentworth , to the Singaporean Frasers property group, for $202.7 million, is the start of the next wave of Asian investment into the hotel and tourism sector, according to agents.
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The deal, which is said to be used as a seed assets for a new real estate investment trust, augurs well for the sale of the Sheraton on the Park, also  recently put on the market. Located in Elizabeth Street, opposite Hyde Park, the Sheraton is worth about $250 million.

The seller of the two hotels is LaSalle Investment Management. Accor Asia will remain as the manager of the Sofitel Wentworth.

Wayne Bunz, senior director of CBRE Hotels Australia, said he is in due diligence for about $70 million of hotels in Sydney, with interest being shown by Asian investors.

”Hotels offer a solid, long term yield and these investors are long term holders of assets,” Mr Bunz said.

”At the end of the manager’s lease the hotel owners can look at redeveloping the properties into apartments.”

Across Sydney there has been a rash of big ticket hotel sales including the Four Seasons Sydney Hotel, to Korea’s Mirae Asset Global Investments for $340 million, while the NSW government has also ear-marked the former “Sandstone” Department of Lands building, and Department of Education building on Bridge Street for sale to a hotel or tourism-style operator.

In the past six months more than $150 million in cash has also changed hands in Melbourne hotels, which experts said was an indication of a busy year ahead.

In the largest deal, the private Chinese investor Fu Wah International Group has made its first significant foray into local property with the purchase of Melbourne’s landmark Park Hyatt hotel.

It was believed the price paid was about $135 million, but the agents and buyer declined to comment.

The five-star hotel is near Melbourne’s Parliament House, at 1 St Andrews Place, and was developed in 1999 by Lustig & Moar at a cost of $150 million. The sale involves both the 240-room Park Hyatt and a commercial car park next door.

Mr Bunz, and Anton Eilers, executive director of CBRE China, brokered the off-market transaction between Singapore’s GIC and Fu Wah International Group, which is due to settle this week.

In another deal, also due to settle soon, was the Hong Kong-based hospitality company Ovolo Group, which bought the Melbourne-based Oaks on Lonsdale serviced apartments complex for about $70 million.

”Hotels have been keenly sought after. Late last year, the private Chinese investor Fu Wah International Group made its first major foray into local property with the purchase of Melbourne’s landmark five-star Park Hyatt hotel,” Mr Bunz said.

It was believed the price paid was about $135 million, but the agents and buyer declined to comment.

The hotel, at 1 St Andrews Place, near Melbourne’s Parliament House, and was developed in 1999 by Lustig & Moar at a cost of $150 million. The sale involved both the 240-room Park Hyatt and a commercial car park next door

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