HVS Asia Pacific Hospitality Newsletter - Week Ending 23 November 2018
Singapore-based hospitality trust CDL Hospitality Trusts (CDLHT) has acquired 95% interest in Hotel Cerretani Florence, MGallery by Sofitel for 40.6 million at an annualized net property income yield of 4.6% for the nine months ended 30 September 2018. This marks CDLHTs first property in Italy. The 86-key 4-star hotel is conveniently located in the historic city centre of Florence and is within walking distance to major tourist attractions. The freehold property is 8-minute walk away from the main train station and a 25-minute drive from Florence International Airport. The property will be leased and operated by the current lessee based on a new management lease agreement for the next 20 years and will remain marketed under the MGallery by Sofitel brand, pursuant to an existing franchise agreement with France-based hotel group Accor Hotels Group (Accor). The lessee, part of German-based EVENT Hotels group (EVENT Hotels) will continue to hold the remaining 5% indirect stake in the property. EVENT Hotels is the largest fully integrated hotel management platform which owns, operates and manages approximately 14,100 keys in Europe. CDLHT, listed on the Singapore Exchange Securities Trading Limited, is a group comprising of CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust with assets within the Asia Pacific region and Europe valued at $2.7 billion.
Singapore-based hospitality management company, Hotel Properties Limited (HPL) has announced that its associated company, Singapore-based Leisure Ventures Pte Ltd (LVPL) is acquiring the freehold interest of a 740-acre hotel site in Tuscany, Italy for approximately EUR22.6 million (SGD35.4 million). Located less than 25 kilometres to Florence and 35 kilometres to Siena, the five-star hotel, Castello Del Nero, is surrounded by vineyards and olive groves. The 50-key hotel features two restaurants, a spa and a fully consecrated chapel. The site also includes a separate 12-apartment agro-tourism accommodation and five additional residences with consent for refurbishment into independent villas. For the purpose of the acquisition, LVPL has set up a wholly-owned subsidiary company in the United Kingdom, Leisure Ventures Europe Limited (LVEL). This acquisition will allow HPL to further diversify its hotel portfolio geographically. HPL owns hotels, resorts and shopping galleries in 13 countries across the Asia Pacific region, East Africa, South Africa, Vanuatu, United Kingdom and the United States of America.
As of 30 September 2018, China-based hotel management company Huazhu Group (Huazhu) had a total of 4,055 hotels with 409,516 rooms in operation, comprising of 698 leased hotels, 3,139 manachised hotels and 218 franchised hotels in 391 cities across China. According to its unaudited financial report ended 30 September 2018, net revenue from operations, net income and adjusted EBITDA recorded a year-on-year growth of 15.9%, 44% and 19.1%, achieving RMB2,768 million (US$403. million), RMB668 million (US$97.2 million) and RMB1,007 million (US$147 million) respectively. In the third quarter of 2018, RevPAR was RMB217, up by 7.1%year-on-year, ADR was RMB239, up by 9.8% year-on-year while average occupancy rate for all hotels in operation was 90.7%. Huazhu expects that net revenue for the fourth quarter to grow between 17% and 19% year-on-year. For the whole year of 2018, the Group anticipates the growth in net revenue to be at a high level of 18% to 22%.
Since September, travellers of all nationalities arriving from India have been given clearance to enter Myanmar by using the two overland borders of Tamu and Rih Khaw Dar. Previously, travellers from Europe and Asia will utilise the Old Silk Road that passes through China and circumvent Myanmar. It will now be possible to cross through Myanmar from India and then towards Thailand by using Thai border check points. This fall within the Act-East Policy, previously called Look-East Policy, an initiative of the Indian Government to enhance stronger economic and strategic relations with Southeast Asian countries. The opening of these land border crossings is expected to boost tourism growth in both Northeast India and Myanmar. However, according to Bertie Lawson of Myanmar-based boutique tour operator, Sampan Travel (Sampan), Myanmar will need to develop its current infrastructure and tourism amenities further in order for the nation to become a popular touristic destination.
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