24/03/2017 - 09:25

East Perth hotel sold for $50 million

24/03/2017 - 09:25

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A Singaporean investment group has taken a long-term view on Perth's hotels sector, shrugging off plunging room rates and a massive wave of new developments to purchase the Crowne Plaza Perth for $50 million.

Avant Hotels International paid $9 million for Crowne Plaza Perth in 1990.

A Singaporean investment group has taken a long-term view on Perth's hotels sector, shrugging off plunging room rates and a massive wave of new developments to purchase the Crowne Plaza Perth for $50 million.

The 189-room, 4.5-star hotel, located on Terrace Road in East Perth, was bought by Singapore's I-Power Management, a diversified conglomerate with its roots in information technology.

JLL Hotels brokered the deal off-market on behalf of its previous owner, Hong Kong- based Avant Hotels International.

Avant recently spent $11 million refurbishing the hotel, which it bought in 1990 for $9 million.

The Crowne Plaza is operated by InterContinental Hotels Group, which also runs the Holiday Inn Perth City Centre and will operate the new Intercontinental Perth, once its conversion from being Rydges Perth is complete.

The deal is the second large hotel acquisition by a Singaporean group since October last year, following the Novotel Perth Langley being sold for $80 million.

Prior to that, the largest hotel sale in Perth in 2016 was the April sale of Quest Adelaide Terrace, which embattled Diploma Group sold for $42 million to a private investor.

The sale comes at a time when Perth room rates and occupancy are trending downwards, with data from Hotels.com released earlier this month showing a 12 per cent drop on the average price paid for a Perth hotel room in 2016, compared to the previous year.

Perth is also in the middle of a hotels building boom, with up to 4,000 new rooms in the development pipeline.

Part of that pipeline includes the ultra-luxury Ritz-Carlton hotel, under construction at Elizabeth Quay, which was offered for sale by its developer, Far East Consortium, in August last year.

The Ritz-Carlton is one of five new hotels being developed in Perth under brands associated with the world's biggest hotelier, Marriott International.

Other properties under the Marriott stable of brands include The Westin Perth, which is being built at 480 Hay Street; Aloft Perth, which will open in Rivervale at the end of May, a Courtyard by Marriott property on Wellington Street, which has planning approval; and a 42-level Sheraton hotel, proposed to replace the New Esplanade Hotel near Elizabeth Quay.

Hilton International is also backing Perth's hotels market despite the short-term uncertainty, with three DoubleTree by Hilton hotels in the works, the most advanced being its property on James Street, Northbridge, which is expected to be completed by early 2018.

Australia's largest locally-owned hotel operator, Mantra, also has big plans in Perth, following the construction of its Peppers Hotel near Kings Square last year.

Mantra is also building a Tribe Hotels property in West Perth, while it also is planning new hotels in the CBD and in East Perth.

 

 

 

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