Industry Update
Press Release23 March 2020

HVS Asia Pacific Hospitality Newsletter - Week Ending 20 March 2020

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Quest Macquarie Park Sold for AUD46 Million

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The Quest Macquarie Park, owned by Australia-based Tuggeranong Valley Rugby Union and Sports Club Limited ("Vikings Group"), has been sold to Singapore-based Ascott Residence Trust ("ART") for AUD46 million. Situated at 71 Epping Road, Macquarie Park in Sydney, the property offers 111 serviced apartment-style hotel rooms comprising a mix of studios, one- and two-bedrooms apartments, with full kitchens and laundry facilities. The six-storey property also offers an array of services such as a 24-hour on-site reception, breakfast options, retail, valet dry cleaning, guest laundry, outdoor BBQ area, business administration services and conferencing, and a fitness centre. CEO of ART, Beh Siew Kim, has mentioned that the acquisition is part of ART's strategy to enhance returns for its stapled security holders while strengthening investments in developed markets. The property will be subjected to a master lease agreement and will contribute to ART's income. The annual rent under the master lease agreement provides an EBITDA yield of 5.5% and is also indexed at a 4% increase each year, subjected to periodic market review.

Craig's Royal Hotel Ballarat Sold for More Than AUD12 Million

The Craig's Royal Hotel Ballarat in Victoria has been sold to Australia-based Black Rhino Group for more than AUD12 million after more than two decades of ownership by John and Mary Finning since 1999. Situated at 10 Lydiard Street, the hotel has a rich history of hosting celebrities, royalty, prime ministers and other well-known identities since it started operation in the 1850s. The hotel has undergone several additions, modifications and renovations during its 167-year history, with its largest renovation from 2003 to 2010, which involved a multi-million-dollar redevelopment. The interior transformation included gutting and rebuilding the accommodation to create 37 boutique rooms, development of the highly acclaimed restaurant, The Gallery, and revamping of all the function rooms. The hotel presently offers a diverse collection of restaurants, bars, function rooms and lounges including the multi-award-winning The Gallery restaurant, as well as Craig's Café, the Foyer Lounge, Craig's Bar and 45 gaming machines. The group currently owns 14 hotels including the 44-key Victoria Hotel in Shepparton and the remaining 13 pubs dotted throughout suburban Melbourne.

Banyan Tree Holdings and Htoo Hospitality Annouce Joint-Venture in Myanmar

Singapore-based Banyan Tree Holdings Limited (through its wholly-owned subsidiary Banyan Tree Hotels & Resorts) and Htoo Hospitality ("Htoo"), hotel and tourism arm of Myanmar-based Htoo Group of Companies, have announced the signing of a joint venture ("JV") agreement for the formation of a hotel management business in Myanmar. The JV involves the management of 17 hotels and resorts owned by Htoo, including 15 existing properties and two in the pipeline. Under the long-term partnership, the JV envisions to become the top hotel management company in Myanmar, overseeing and managing hotels owned by third parties. In addition, the JV will include the operation of a hospitality school owned by Htoo in Yangon, Hotel and Tourism Training Centre, to elevate the local hospitality talent pool and provide more opportunities for a career in the hospitality industry. Launched in 2002, Htoo currently owns and manages hotels located across eight states and eleven destinations in Myanmar, with nine brands under four boutique collections.

Philippines Tourism Sector to Receive USD8.2 Million Fund

Due to the impact brought upon by the Covid-19 pandemic, the Philippines tourism sector is expected to receive a budget for a new domestic travel campaign, and industry staff training and preparedness on the virus, at USD8.2 million and USD1.7 million, respectively. The tourism secretary, Bernadette Romulo-Puyat, has announced these initiatives after noting that foreign arrivals nosedived by 42% to 418,128 in February compared to an increase of 10% in January. Hotel occupancy rates in Boracay and Bohol plunged by 40% while other prime destinations such as Cebu and Manila are also reeling from reduced occupancy. Former tourism secretary, Mina Gabor, has proposed the formation of a Philippine Department of Tourism ("DoT") crisis communication committee to handle emergencies such as the Covid-19 epidemic, with continuous training provided for its members. On the other hand, tourism consultant, Jerome de la Fuente, has proposed a funding mechanism that can take on the form of double deduction on expenses for tourism-related training, tax holidays, soft loans, and the like to help tourism companies to tide through the slump.

About HVS

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