Diploma to sell East Perth hotel

Property developer Diploma Group has entered into a heads of terms for the sale of its Quest apartment hotel on Adelaide Terrace.

Diploma’s wholly owned 20-storey development in East Perth has been preleased to Quest on a long-term basis and, when completed in May, will add 130 rooms to the short-term accommodation market.

The agreement is subject to due diligence and other conditions, which the company expects to be finalised by the end of next month.

“We are pleased to have entered into this heads of terms at this stage of construction,” Diploma chairman Nick Di Latte said.

“It is expected that once the transaction is complete the proceeds from the sale will strengthen Diploma’s cash position to fund ongoing working capital requirements and new opportunities.”

Diploma shares were 7.1 per cent higher to 1.5 cents each at 11:10am.