Hoteliers come out swinging against declining demand
As listed travel companies respond to declining forward international travel demand by suspending guidance, hotel owners and investors yesterday came out swinging, announcing major acquisitions and refurbishments across the globe.
Singapore’s Ascott Residence Trust has bought The Quest serviced apartments complex in Sydney’s Macquarie Park for $46 million on a 5.5% yield through Savills managing director Michael Simpson.
Separately, iProsperity has expanded its portfolio, buying a $US477 million ($733.85 million) swag of seven Kimpton branded hotels in the US from Florida-based real estate investment trust Xenia Hotels and Resorts.
Purchasing on behalf of a group of wealthy investors, iProsperity has bought a total of 1124 guest rooms in the strongly performing hotel markets of Portland, Denver and Santa Barbara. The group bought the portfolio in a joint venture with Singapore’s Soilbuild.
Meanwhile, on the Australian refurbishment front, eight years after The Star opened The Darling hotel in Sydney’s Pyrmont, the gaming group has embarked on a major room renovation costing up to $25 million.
The 171-room hotel, which along with the Crown Melbourne and Crown Perth properties has won the Forbes five-star rating, has been enjoying room occupancies of more than 90% this year, with the two-bedroom penthouse suites charging $6000 to $8000 depending on the season.
However, The Star would not comment on what effect the coronavirus has had on its local bookings yesterday.
The Star’s group manager, design, Lisa Zellinger, says after eight years’ operation it is normal to do a refurbishment. “That’s the life cycle,” she says.
The Star is testing a prototype room and Zellinger says the refurbishment will take the rest of the year to complete.
The room style would be classic and timeless, she says.
Meanwhile, Ascott’s purchase of Quest Macquarie Park, which sports 111 serviced apartments, from the Tuggeranong Valley Rugby Union and Sports Club Ltd, is a play on the business market.
Savills’ Simpson says the corporate business travel market is holding up well, and the hotel is well located and has a range of corporate demand drivers.
Ascott Residence Trust chief executive Beh Siew Kim says the acquisition of the Quest is in line with the trust’s strategy to enhance returns for its stapled security holders.
Meanwhile, the wealthy Thai family group that snapped up the new Vibe Hotel in Sydney’s Darling Harbour for about $108m is also chasing a new property in Melbourne. The family is also believed to be looking at the soon to open Vibe Hotel in Melbourne CBD on Queen Street.
Additional reporting: Ben Wilmot
This article originally appeared on www.theaustralian.com.au/property.
