Sydney Shangri-La Hotel sells to Hong Kong Shangri-La Asia group for record $352 million
Another landmark Australian CBD hotel has been acquired by an Asian property group, with Hong Kong-listed Shangri-La Asia paying $352 million to fully own the Sydney’s Shangri-La Hotel in The Rocks.
The acquisition of the leasehold property follows the Malaysia-listed Starhill Real Estate Investment Trust, paying $415 million earlier this month for a portfolio of three five-star Marriott hotels – the Sydney Harbour Marriott, the Brisbane Marriott and the Melbourne Marriott.
Asian buyers have accounted for 93% of all hotel sales this year.
The transaction, which is due to be completed by no later than July 31 consists of $330 million for the hotel and $22.4 million for for its net current assets (mostly cash).
Audited results for the year ending March 31 show the hotel made an after tax profit of $3.25 million.
Shangri-La Asia is owned by the billionaire Kuok family, which has interests in property, manufacturing and media via a substantial shareholding in the South China Morning Post and a stake in Hong Kong television group Television Broadcasts Limited (TVB).
Shangri-La Asia has managed the hotel for the Government Investment Corporation of Singapore since 2003.
The price paid for the Shangri-La Sydney is well above the $249 million paid for the Sydney Harbour Marriott Hotel at Circular Quay – both hotels have 563 rooms – with the sale price surprising the Sydney hotel market, reported the Australian Financial Review.
The 36-storey Shangri-La Sydney stands on Cumberland Street in The Rocks, with spectacular views across the harbour taking in the Sydney Harbour Bridge and Opera House.
The sale price equates to $626,000 per room.
The hotel stands on land that is owned by the Sydney Harbour Foreshore Authority, which sold a 99-year leasehold over the site in 1988.
Sydney hotel occupancy rates are forecast to rise to 88% by the end 2014, a rise of only 2% from current levels, according to the Deloitte Access Economics Tourism & Hotel Outlook report.
Shangri-La Asian operates 16 hotels globally with a collective 5,600 rooms.
Shangri-La Hotels are in Vancouver, New Delhi, Oman, Manila, Abu Dhabi (two hotels), Dubai (two hotels), Putrajaya and Kuala Lumpur (in Malaysia), Taipei and Tainan (in Taiwan); and Beijing, Changzhou.
