HVS Asia Pacific Hospitality Newsletter - Week Ending 7 June 2019
Singapore-based mainboard-listed real estate developer, City Development Limited ("CDL")has announced an offer to buy UK-based listed hospitality company, Millenium & Copthorne Hotels ("M&C"), for a total of GBP2.23 billion (SGD3.9 billion). The offer represents a 37 per cent premium to M&C's closing price of GBP500 per share on 6 June 2019. CDL owns approximately 65.2 per cent of M&C currently and has stated that the offer is final and will not be increased. Once completed, the move will bring the operator of Millennium, Grand Millennium, Copthrone and Kingsgate hotels back into the fold of billionaire Kwek Leng Beng's property empire. Previously in 2017, CDL offered to take M&C private in a deal valued at GBP1.8 billion but the transaction did not materialize as the minimum acceptance condition of more than 50 per cent of M&C's shares was not satisfied. M&C has a portfolio of more than 140 hotels in over 26 countries.
Singapore and Busan have signed a one-year Memorandum of Understanding ("MoU") to promote trade, business and tourism flows between the two destinations. The MoU is a six-party collaboration which includes Changi Airport Group, Busan Metropolitan City ("BMC"), Korea Airports Corporation ("KAC"), Korea-based low-cost carriers Eastar Jet and Jeju Air, and Singapore-based regional airline SilkAir Private Limited ("SilkAir"). The deal follows the allocation of traffic rights to Eastar Jet, Jeju Air and SilkAir to operate flights on the Singapore-Busan route. SilkAir commenced a four-times weekly service to Busan from 1 May 2019, while Jeju Air will launch a new service with similar frequency on 4 July 2019. Eastar Jet is expected to connect the cities in the coming months. The MoU aims to improve air connectivity between the two destinations and promote the respective airline's product offerings.
Australian Real Estate Company, Johnson Property Group ("Johnson"), is developing Trinity Point, a new community and resort destination on Lake Macquire, New South Wales, Australia. Located an hour and half from Sydney's central business district, the AUD388 million mix-used development spans 23 hectares of prime waterfront land and will offer 189 residential lots and medium-density housing, 250 luxury residential apartments, a 188-berth marina, 120-seatrestaurant and bar with additional outdoor dining, café, and a 65-key Pullman Hotel. Currently, the Trinity Point has just opened the Marina while the restaurant is expected to be completed by the end of the year. Work on the luxury residences will begin next month. Once completed, Trinity Point will be one of NSW's largest mixed-use development. An expected completion date for the entire development has not been announced.
Pier One Sydney Harbour Hotel will complete a five-year transformation with an additional AUD10 million investment in a design refurbishment of all rooms and suites. Commencing in June, the refurbishment is expected to be completed in September 2019. In February 2014, US-based multinational hospitality company, Marriot International ("Marriott"), added the 189-key Pier One Sydney Harbour Hotel to its Autograph Collection, and has since undertaken a series of major renovations including the entry lobby, bars, restaurants and conferencing facilities. Situated in Walsh Bay, the hotel is within walking distance from The Rocks historic precinct and Sydney Central Business District. The hotel has steadily grown its ADR throughout its transformation to a five-star property.
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