Singapore's UOL buys Hilton South Wharf for $230m
Singapore’s UOL Group has acquired the 396-room Hilton South Wharf for $230 million in the biggest hotel deal this year.
The listed developer and investor, chaired by one of Singapore’s richest men, Wee Cho Yaw, acquired the five-star business hotel from New York-listed Host Hotels & Resorts and infrastructure investor Plenary Group.
The hotel forms part of the Melbourne Convention Centre precinct, which was developed by Plenary Group. The Melbourne-based company sold a 75 per cent equity stake in the hotel to Host Hotels for $137 million in 2011.
The deal just pips Japanese company Daisho’s $220 million acquisition of the 294-room hotel component of Cbus Property’s Collins Arch mixed-use development on Collins Street – to be operated by Marriott under its W brand – and continues the big push by Asian investors into Melbourne’s hotel market.
Last year the Frasers Hospitality Trust acquired the Novotel Melbourne on Collins for $237 million, investment manager iProsperity acquired the Novotel Melbourne Glen Waverley for $73.7 million on behalf of Asian investors and listed Singaporean developer Sing Holdings bought the Travelodge Docklands for $107 million from Singapore’s Kum family.
UOL Group owns and operates a portfolio of 30 hotels, resorts and serviced suites in Asia, Oceania and North America under the Pan Pacific and PARKROYAL brands.
The Hilton South Wharf hotel will be rebranded as a Pan Pacific hotel after settlement, which is due to occur on May 31.
In a statement to the Singapore Stock Exchange, UOL said it had a established a wholly-owned unit trust to acquire the hotel from HHR Conventions Pty Ltd “for an aggregate cash consideration of $230.0 million”. A initial 7.5 per cent deposit of $17.25 million has been paid.
“The acquisition is part of the Group’s plans to expand its hotel property portfolio and hotel management businesses in the Oceania region,” UOL said in a statement.
“The Property will allow the Group to have a bigger presence in the city of Melbourne in addition to its PARKROYAL Melbourne Airport.”
UOL added that the acquisition of the Hilton South Wharf may also allow it the opportunity to “enhance the collective operating efficiency of the Group’s current hotels in Australia, through economies of scale and greater brand awareness of “Pan Pacific and PARKROYAL”.
The property was marketed by Craig Collins of JLL Hotels & Hospitality who declined to comment. It was put up for sale in late 2015 with price expectations of more than $250 million.
UOL Group’s other Australian hotels include PARKROYAL Parramatta, which recently underwent a $25 million extension to create the biggest hotel in Parramatta, with 286 rooms.
The acquisition is conditional on a number of factors including UOL Group gaining Foreign Investment Review Board approval and being able to acquire the leaseholds of at least eight of the 12 rooms, which have unrelated room owners (from Host Hotels and Plenary) under sale-and-licence back arrangements.
The 99-year leasehold over the 30,688-square-metre property runs until 2108.
