Diploma books $42m from hotel sale

Property developer Diploma Group expects to reap $42 million from the sale of its Quest apartment hotel on Adelaide Terrace, after finalising a deal that was announced in February.

Diploma said today it had executed a binding contract for the sale of its wholly owned 20-storey development in East Perth with an unnamed buyer, with the sale expected to settle around July.

The news sent Diploma shares surging, up 27 per cent to 1.4 cents each at 10:45am.

The development has been pre-leased to Quest on a long-term basis and will add 130 rooms to the short-term accommodation market when construction wraps up in May.

Diploma chief executive Nick Di Latte said he was pleased to have finalised due diligence with the buyer and executed a sale contract.

“As previously mentioned, the sale proceeds on completion will place the group in a strengthened position to fund ongoing working capital requirements and at the same time reducing project specific debt,” he said.