Ibis Singapore on Bencoolen sold to private investor

IBIS Singapore on Bencoolen, a three-star hotel, has been sold just 18 months after it opened its doors.

Details were not disclosed but it is understood a Singapore private investor paid a figure above $200 million for it.

The hotel was put up for sale via a private tender in June by joint owners LaSalle Investment Management and French hotel group Accor.

They announced the sale yesterday, but did not disclose the price or purchaser 'due to confidentiality obligations'.

It is the largest Ibis outside Europe, with 538 rooms, two retail outlets, 68 parking spaces, and two food and beverage outlets. The hotel will continue to be managed by Accor under a long-term management contract for its economy brand Ibis.

LaSalle's international director, Mr Andrew Heithersay, said the hotel's occupancy rate is in the 'mid 90 per cent range' and the average room rate is about $140.

An industry expert, Mr David Ling, HVS Asia Pacific managing director, said: 'The room rate is higher than that for the usual economy hotels here. It is the first economy hotel of international standard here and has a contemporary design, so the transacted price would reflect the stronger income position. Generally, international-grade hotels here are expected to trade at a 6 per cent to 7 per cent yield,' he said.

The hotel sale was brokered by Jones Lang LaSalle Hotels. Its managing director of investment sales in Asia, Mr Michael Batchelor, said he could not disclose the buyer's identity but that there was interest not only from Singapore investors but also from groups in Indonesia, Malaysia, Hong Kong and Thailand.

'In 2009, many industry observers felt the market was going to go though a challenging period with the large amount of supply and dwindling arrivals,' he said. 'The complete opposite has happened 12 months on... Singapore is now one of the strongest markets in Asia.'

He said most hotels here are running at 90 per cent occupancy even after 6,000 rooms were added in the past year.

'Around the region, we are seeing a renewed interest in hotels... With hotel profitability returning, hotel values are expected to rise in the future.'

The hotel was 70 per cent-owned by LaSalle via its LaSalle Asia Opportunity Fund II and 30 per cent by Accor.

Source: Straits Times, 3 Aug 2010