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Novotel hotel will be sold to a consortium comprising City Developments Limited (CDL), CapitaLand and Ascott Residence Trust.
CDL Hospitality Trusts (CDLHT) has announced plans to sell Novotel Singapore Clarke Quay (NCQ) for $375.9 million, as part of the transaction to redevelop the Liang Court site and acquire the new hotel under a forward purchase agreement, for $475 million or 110% of the development cost, whichever is lower.
Located at River Valley Road, NCQ will be sold to a consortium comprising City Developments Limited (CDL), CapitaLand and Ascott Residence Trust, which intends to redevelop the site into an integrated development, with the new hotel being a part of it.
In an SGX filing, CDLHT also proposed to acquire W Singapore hotel in Sentosa Cove for $324 million.
It intends to fund its acquisition of W Hotel with internal resources, which includes proceeds from the divestment of NCQ and/or debt financing.
CDLHT believed that the proposed transactions will enable it “to further penetrate the lifestyle hotel market at different tiers or price points in Singapore amid increasing global demand for lifestyle hotels with strong identities and story-telling potential”.
This comes as the new hotel, which will fall under Marriott International’s Moxy brand, is designed to appeal to the next-generation travellers, while the W Hotel will cater to the luxury lifestyle market.
“Through the W Hotel and the new hotel, CDLHT will also benefit from continued long-term exposure to Singapore, which is the 5th most visited city in the world and attracts both leisure and business travel, given its status as an international financial centre and renowned MICE destination,” said CDLHT’s manager.
Moreover, the proposed transactions will allow CDLHT to preserve its majority Singapore portfolio weightage via the W Hotel even after divesting NCQ, it added.
“With the acquisition of the W Hotel combined with the divestment of NCQ, and prior to the acquisition of the New Hotel, CDLHT’s pro forma gearing would be lower, at 35.3%, leaving it with ample debt headroom amounting to $512.7 million, assuming a 45% gearing limit for CDLHT as a whole,” revealed the managers.
CDLHT owns six hotels with 2,718 rooms in Singapore, which are valued at over $1.6 billion. Once the proposed transactions are completed, CDLHT will have seven hotels with 3,000 rooms in Singapore.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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