Hotel industry and travel news from around the Asia Pacific region: Singapore’s GIC acquires a 25% equity stake in citizenM, China's booming hotel construction pipeline, Ascott Residence Trust acquires Felix Hotel and more...
Ascott Residence Trust Acquires Felix Hotel in Sydney for AUD60.6 Million
Singapore-based hospitality real estate investment trust company, Ascott Residence Trust (“Ascott Reit”), has acquired the 150-key Felix Hotel located in Mascot, Sydney, for AUD60.6 million (SGD58.8 million). Recently completed and opened in February 2018, the freehold limited-service business hotel will be rebranded as Citadines Connect Sydney Airport upon completion of the acquisition in May 2019. The 12-storey property will feature 150 guestrooms with size ranging from 18 to 40 square metres, a sky bar, a sky lounge, outdoor terrace and conferencing facilities. Citadines Connect Sydney Airport represents Ascott Reit’s debut business hotel in Australia and its first property to be managed by its sponsor, Singapore-based serviced residence owner-operator, The Ascott Limited (“Ascott”) under the new Citadines Connect brand. The new addition increases Ascott Reit’s portfolio in the nation to over 900 units across six properties.
Hotel Properties Enters Joint Venture for Hotel and Condominium Project in Osaka City, Japan
Singapore-based company investment holding company, Hotel Properties Limited (“Hotel Properties), has entered into a joint-venture with Japanese real estate firm, Tokyo Tatemono Co (“Tokyo Tatemono”) to acquire a 75 per cent stake in a new hotel and a 25 per cent co-ownership interest in up to 450 condominium units located in Dojima 2-chome, Osaka City, Japan. A total investment of approximately JPY20.85 billion (SGD257 million) will be funded through a mix of internal funds and external bank financing. Planned for development on a freehold site spanning approximately 4,828 square metres, the hotel and condominium will be developed within a 50-storey mixed-use project with a total gross floor area of 80,000 square metres. The Dojima site is situated within Umeda/Kita district, the transport and business hub of the city, and is within walking distance from Umeda as well as Osaka Station. Subject to the granting of planning approval for the redevelopment of the Dojima site, the construction of the project is expected to take about four to 4½ years.
Singapore’s GIC Acquires a 25% Equity Stake in citizenM
Singapore’s sovereign wealth fund, GIC Private Limited (“GIC”), has acquired a 25 per cent equity stake in citizenM, a Netherlands-based fully integrated hotel real estate developer and hotel operator. The investment, of an undisclosed value, takes citizenM's enterprise value to EUR2 billion (USD2.3billion). Two existing shareholders, Netherland-based APG Group (“APG”) and Netherlands-based private equity firm, KRC Capital (“KRC”), along with GIC and citizenM founder Rattan Chadha, have committed a total of EUR750 million (USD846 million) of equity for future expansion. Chief Investment Officer of GIC Real Estate, Lee Kok Sun, cited citizenM’s well-received value proposition of affordable luxury in urban markets as a reason for its investment. citizenM opened its first hotel in Amsterdam Schiphol in 2008 with an idea to disrupt the traditional hotel industry by creating a luxury hybrid hotel for today’s modern travelers. It has since grown to include 15 hotels with another 15 in the pipeline globally.
Air New Zealand to Launch New Direct Service Between Auckland and Seoul
Air New Zealand (“ANZ”) has announced plans for non-stop service between Auckland and Seoul in South Korea, starting from 23 November 2019. This will represent ANZ’s sixth destination in Asia, after Hong Kong, Shanghai, Singapore, Taipei and Tokyo. Operated by Boeing 787-9 Dreamliner aircraft, the airline will fly three times per week to Seoul's Incheon International Airport and up to five times a week during the peak holiday period from late December to mid-February. The new service, with a flight time of approximately 12 hours northbound and over 11 hours southbound, will offer a better connection as compared to the present route which takes more than 16 hours from Auckland to Seoul, and 20 hours including a seven-hour stopover for the return journey. Currently, travellers departing from Auckland have to stopover at Tokyo’s Narita International Airport and connect to another flight operated by Korean carrier, Asiana Airlines (“Asiana”), to Seoul. ANZ operate domestic flights within New Zealand and international flights to Australia, the South West Pacific, Asia, North America, South America and United Kingdom.
China Sees Booming Hotel Construction Pipeline
According to the latest report by Lodging Econometrics (LE), current hotel construction pipeline in China comprises 2,761 hotels with a total of 580,635 rooms, recording a year-on-year (y-o-y) growth of 12 per cent and 6 per cent, respectively. Currently, there are 2,044 hotels with 411,032 rooms under construction in China, up 17 per cent and 10 per cent y-o-y, respectively. 351 hotels with 76,063 rooms are scheduled to commence construction in the next 12 months, down 4 per cent and 5 per cent y-o-y while 366 hotels with 93,540 rooms are in the early planning stage. By end of 2018, 619 new hotels with 109,524 rooms have opened in China, accounting for 23 per cent of all hotels worldwide. LE expects that new hotel openings will continue to grow in the following years, with 671 new hotels (125,396 rooms) and 691 new hotels (132,108 rooms) envisaged to open in 2019 and 2020, respectively.
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