In one of the largest ever single hotel asset deals in Singapore, Pan Pacific Hotels Group sold the Parkroyal on Kitchener Road for S$525 million ($389.03 million). The sale price also marks the second-largest hotel asset transaction in Asia Pacific this year so far.
The hotel, located in the heart of the Little India district, was acquired by Midtown Properties Pte. Ltd., part of Worldwide Hotels Group.
According to reports, Pan Pacific Hotels, which is the wholly-owned subsidiary of Singapore-based UOL Group, said it had entered into a sale and purchase agreement to sell the hotel at a 24% premium of its latest valuation of S$423 million ($313.45 million) as of December 31, 2022.
Reports also suggested that the sale and purchase agreement will see the disposal of 5 million ordinary shares of the hotel, accounting for its entire issued and paid-up share capital. The sale is expected to be completed on October 31.
The 542-key, freehold hotel underwent a $21-million-dollar refurbishment in 2020, which saw the addition of several facilities and amenities to enhance the guest experience. As part of the enhancements, the lobby was refreshed, self-check-in kiosks were installed, and modern technological equipment was added to the seven meeting spaces.
Built in the 1980s, the 21-story hotel is close to the City Square Mall, Mustafa Centre and Farrer Park MRT station.
Reportedly, Worldwide Hotels may operate the hotel outside its current brand portfolio, which includes Hotel Boss, Value Hotel, Hotel Mi, V Hotel, Venue Hotel and Hotel 81.
JLL advised Pan Pacific Hotels in the transaction. The sale of Parkroyal on Kitchener Road is the first major agent-brokered hotel transaction in Singapore after the pandemic and follows JLL’s sale of the SHREIT portfolio in Vietnam and Indonesia.
This deal is significant for the market, JLL said in a release, following the sales of Andaz Singapore and the Oakwood Premier OUE since 2019. Both sales were brokered by JLL.
“Investors responded very favorably to the marketing campaign for the Parkroyal on Kitchener Road due to the hotel’s coveted freehold land status and exciting potential for rebranding and redevelopment. We are proud to have advised on this major sale which brought together our strategic advisory and on-the-ground transactional expertise to ensure a seamless and efficient sale process for our client,” said Julien Naouri, senior vice president, investment sales, Asia Pacific, JLL Hotels & Hospitality Group.