TA Enterprise to buy Swissotel Merchant Court

It'll pay LaSalle Asia Opportunity II SARL $260m for the hotel

(SINGAPORE) Bursa-listed TA Enterprise Berhad has agreed to buy the Swissotel Merchant Court Singapore for about $260 million from the LaSalle Asia Opportunity II SARL.

The acquisition price works out to about $546,200 per room.

The 476-room hotel is on a site with a remaining lease of about 84 years.

The hotel will continue to be managed by Swissotel, part of Fairmont Raffles Hotels International.

Jones Lang LaSalle Hotels is said to have brokered the sale.

The $260 million cash consideration for the sale comprises the agreed value for the property of $250 million and a $10 million adjusted consideration, said TA Enterprise yesterday.

In the first seven months of this year, the hotel's average occupancy rate came to 75.3 per cent and its average room rate, $214.32.

The sale comes with an Ebitda (earnings before interest, taxes, depreciation and amortisation) guarantee of $19 million per year for four years, capped at a maximum payment of $10 million.

The $19 million Ebitda reflects a 7.3 per cent yield on the sale price.

The Swissotel Merchant Court Singapore has food and beverage outlets, a swimming pool, an Amrita Spa, and meeting and conference facilities. The hotel opened in 1997.

The acquisition by TA Enterprise is subject to the approval of its shareholders, among other things.

TA Enterprise is controlled by Tony Tiah and his wife Alicia (the name TA comes from the first letters of the couple's names).

The group owns Westin Hotel Melbourne, Radisson Plaza Hotel in Sydney and the Aava Whistler Hotel in Canada.

Source: Business Times, 25 Aug 2009