Industry Update
Press Release14 January 2019

HVS Asia Pacific Hospitality Newsletter - Week Ending 11 January 2019

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Oxley Sells Mercure and Novotel Hotels for SGD950 Million in Singapore


Singapore-based property developer, Oxley Holdings Limited ("Oxley Holdings") wholly-owned subsidiary, Oxley GEM Pte. Ltd. ("Oxley GEM"), has accepted a letter of intent ("LOI") dated 10 January 2019, for the purchase of Mercure and Novotel Hotels on Stevens at the consideration of SGD950 million, exclusive of goods and services tax. Situated on 28 and 30 Steven Roads, the 518-key Mercure Singapore and 254-key Novotel Singapore began operations in late 2017 and occupy a land area of 18,477 square metres. Based on Oxley Holding's latest corporate presentation slides in November 2018, the two hotels generate an occupancy rate of 83% with a total recurring income of SGD53 million per annum. Under the terms of LOI, upon the receipt of SGD9.5 million (1% of the consideration) as a non-refundable deposit, the purchaser will be entitled to carry out property due diligence until 15 April. The purchaser shall then pay SGD38.0 million (4% of the consideration) on 28 February, and an additional sum of SGD47.5 million (5% of the consideration) on the signing date of the sale and purchase agreement or April 15, whichever earlier.

Ascott Reit Sells Ascott Raffles Place Singapore for SGD353 Million

Singapore-based Ascott Residence Trust ("Ascott Reit") has reached an agreement with private investor Cheong Sim Lam to sell Ascott Raffles Place Singapore for SGD353 million. The sale price is 64.3% higher above the property's latest valuation of SGD215 million as at 31 December 2018. Formerly known as Asia Insurance Building, the 20-storey conserved building at 2 Finlayson Green, on a 999-year lease, is zoned commercial and has a gross floor area of 168,952 square feet with 146 serviced apartments. Cheong Sim Lam, whose family developed Hyatt Regency Singapore, International Plaza, and Pacific Mansion, is also the developer of residential projects such as Robinson Suites and the previous owner of 137 and 139 Cecil Street. Once the deal is completed in May 2019, Ascott Reit is expected to realise an estimated net gain of approximately SGD134 million. Other operational properties of Ascott Reit in Singapore includes Citadines Mount Sophia, Somerset Liang Court, and Ascott Orchard.

Vietnam Opens Van Don International Airport in Halong Bay

After two years of construction, Vietnam's first privately-owned international airport opened on 30 December 2018. Situated in the northeastern coastal province of Quang Ninh and approximately 50 kilometres away from the UNESCO World Heritage Site of Halong Bay, Van Don International Airport was jointly built by local property and Vietnam-based infrastructure company, Sun Group ("Sun Group") at a total cost of VND7.463 billion (USD321 million). As a new gateway to Halong bay, visitors will be able to reach the bay within a 90-minute drive as compared to a four-hour bus journey from Noi Ba International Airport in Hanoi. The 290-hectare new airport will be able to accommodate large commercial jets, handle up to 2.5 million passengers annually for the next two years and 5 million passengers annually by 2030. The addition of the facility is in line with the government's plan to have a total of 13 international and 15 domestic airports by 2023. Sun Group has also unveiled two other major infrastructure projects costing a total of VND13.1 trillion (USD563 million) in Quang Ninh Province: The new four-lane, 60 kilometres-long Halong-Van Don Highway and the Halong International Cruise Port.

BHMA Announces Lease Management with Bali Resort

Australia-based Flight Centre Travel Group's ("FCTG") in house Thai hotel management company BHMA Hotels and Resorts ("BHMA") has announced the opening of its first Away Resort in Bali, Indonesia. Currently called The Camakila Legian, the upscale resort will be rebranded as Away Bali Legian Camakila under a long-term leasing agreement between Camakila Hotel and BHMA. Located between Kuta and Seminyak, the 117-key property is a few steps from the beach and features two restaurants, a gym, a spa, a 120-square-metre ballroom, a lagoon pool as well as a beachfront infinity pool. The four-star hotel is BHMA's 22nd operational hotel and Away Resort & Villas' 6th property. Acquired by FCTG in July 2017, BHMS also operates X2 Cross To and X2 Vibe brands across South East Asia. According to Kent Davidson, Managing Director of BHMA, the company expansion will continue with a particular interest in key city throughout the Asia Pacific, Fiji, The Maldives and the ski fields of Japan.

China Records 650 Million Border Crossings in 2018

The National Immigration Administration has recorded a total of 650 million domestic and international travellers crossed China borders in 2018, representing a year-on-year (y-o-y) increase of 9.9%. Chinese travellers increased by 12% y-o-y to 560 million, enjoying steady growth for 15 consecutive years. The number comprised of 340 million residents from mainland China, 160 million residents from Hong Kong, 50.3 million residents from Macau and 12.3 million residents from Taiwan. International travellers made up 95.3 million border crossings, up 11.6% over 2017. The top 10 nationalities entering China were Myanmar, Vietnam, South Korea, Japan, the United States, Russia, Mongolia, Malaysia, the Philippines and Singapore.

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