Westin Singapore hotel sold for $468m
Daisho’s acquisition of the 305-room, 99-year leasehold hotel located in Asia Square Tower 2 at Marina Bay is its maiden investment in Singapore. The purchase price translates into a hefty $1.5 million per room, possibly a new record for a hotel here.
Earlier this year, Bright Ruby Resources, a company controlled by a family from China, was reported to have paid between $1.4 million-$1.5 million per room for the freehold Grand Park Orchard Hotel, smashing the previous $1.1 million per room record.
BT understands that The Westin Singapore transaction was sealed just before Christmas. The seller is a fund managed under MGPA, a private-equity property investment advisory firm. MGPA’s original asking price was $2 million per room, or about $610 million in total.
MGPA is currently owned by asset manager BlackRock, which bought over the firm for an undisclosed sum in a deal that was completed in October.
Daisho Development Singapore director Mamoru Kohda said that Daisho decided to acquire the hotel because of its location and the group’s view on room demand in the area.
“We think that there are not enough hotel rooms here. Also, the Marina Bay area is developing very quickly and has a very strong pool of office tenants, so we will be strongly supported by a corporate clientele,” he said.
“We’ve also worked with Starwood in Malaysia and our working relationship with them was strong, so these are the reasons why we decided to buy The Westin Singapore. Daisho is a long-time asset holder, therefore we will work with Westin for a long time.”
The Westin Singapore is the first hotel property to be managed under the Westin brand after the latter left the country more than 10 years ago, in 2001. It occupies levels 32 to 46 of Asia Square Tower 2, with offices taking up the bulk of the remaining floors. It is the first hotel in Singapore to be located within an office building, and has the highest hotel lobby here, on the 32nd floor.
Lance Ourednik, general manager of The Westin Singapore, said: “The sale and ownership change does not affect the daily operation and management of the hotel. The Westin Singapore continues to fly the Westin flag and be managed by Starwood Hotels & Resorts Worldwide, Inc.”
Daisho’s purchase at a record price on a per room basis comes as the Singapore hotel sector faces headwinds such as declining room rates and new completions coming onstream.
However, market experts that BT spoke to say that the amount paid represents its expectations for strong future earnings, and a premium for a brand new hotel.
Tan Tiong Cheng, executive chairman of Knight Frank, said: “The hotel is brand new and already fitted out, so that merits a premium. Fitting out a hotel can be very expensive.”
Its location on the top floors of Asia Square Tower 2 also merits a premium, he added.
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