Hotel Plaza Limited has acquired the joint venture and loan interests of the Singapore based CapitaLand group, in three South-East Asian hotel assets. Exclusive property advisor was Jones Lang LaSalle Hotels, whose Corporate Finance team created an innovative, structured solution to realise the value of these investments, made in the emerging markets of Myanmar, Vietnam and the People`s Republic of China.
The sell-off forms part of CapitaLand`s strategy to divest non-core assets to reduce debt and improve return on equity. Conversely, the offering corresponded with Hotel Plaza`s expansion plans in the region.
The portfolio of four and five star properties comprised the 359 room Yangon Equatorial in Myanmar, the 322 room Mertius Westlake in Hanoi and the 328 room Sheraton Suzhou. Together, the properties were acquired for approximately A$ 160 (US$82) million.
“The challenge facing Jones Lang LaSalle Hotels was to structure a transaction which enabled CapitaLand to maximise the capital invested in emerging markets. We were able to financially engineer a solution which met Hotel Plaza`s investment guidelines. It also retained for CapitaLand the ability to participate in the improved performance of the hotels over the next five years. A win - win solution for all parties” said Michael Cowan, Senior Vice President, Jones Lang LaSalle Hotels.
CapitaLand was formed in July 2000, the product of a merger between Pidemco Land Limited and Singapore listed DBS Land Limited. The merger created the largest listed property company in South East Asia.
Hotel Plaza Limited, a listed subsidiary of United Overseas Land Limited, has continued to expand its Asia Pacific portfolio since 1993. In recent years, the company focussed on Australia, purchasing the Parkroyal Darling Harbour, Parkroyal Parramatta, Landmark Parkroyal and the Sheraton Perth Hotel, totalling 1,404 rooms. It has also acquired hotels in Kuala Lumpur and Penang and opened its flagship, the Plaza Parkroyal in Singapore.
According to Antony Karp, Executive President, Jones Lang LaSalle Hotels “this transaction was the first of a number of structured hotel transactions underway in the region and represents the growing trend of divestment and acquisition of hotel property in Asia.”