West Perth-based Westralia Property Trust will sell the Kalgoorlie Broadwater Resort to a subsidiary of wholesale property syndicate operator Primewest Management for $10.1 million.
The proceeds of the sale, to Primewest (Lot 4 Davidson Street Kalgoorlie Pty Ltd), will be partly used to retire debt of $5 million with the balance directed to other Trust investment opportunities, Westralia announced today.
The Primewest subsidiary changed its name earlier this month.
Primewest director David Schwartz said Broadwater Hospitality Ltd would continue to hold the lease of the region's only five star hotel.
It represents the group's first foray into the hospitality property sector.
Westralia has foreshadowed plans to sell off their tourism assets, including part shares in Como's Broadwater Pagoda Hotel as part of a future portfolio restructure.
The full text of a Westralia announcement is pasted below
Westralia Property Management Limited as Responsible Entity for the Westralia Property Trust announces that it has entered into an unconditional contract for the sale of the Kalgoorlie Broadwater Resort Hotel to Primewest No. 171 Pty Ltd.
The Kalgoorlie Broadwater Resort Hotel is located in Kalgoorlie, Western Australia, was constructed in 2003 and comprises 92 rooms.
The sale price of $10.15 million will generate a loss of $2 million after allowing for selling costs.
The sale is due to settle on 31 August 2007. The proceeds will be partly used to retire debt of $5 million with the balance directed to other Trust investment opportunities.
The sale completes the first stage of the restructuring of the Trust initiated by the Directors of Westralia Property Management Limited.
As a result of this process, the Trust now has a strong balance sheet. The Directors of Westralia Property Management Limited are reconsidering the Trust's portfolio of assets and plan to announce a new strategic vision in the near future.
