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The divestment is in line with the strategy of the group to “extract value from its non-core hotel assets, streamline its portfolio and recycle capital following the onset of the COVID-19 pandemic”.
City Developments Limited (CDL), via its fully-owned hotel unit Millennium & Copthorne Hotels (M&C), has agreed to sell Copthorne Orchid Hotel & Resort Penang in Malaysia to Bursa Malaysia-listed Ivory Properties for RM75 million (S$25 million).
In a release issued on Monday (14 December), CDL said the divestment is in line with the strategy of the group to “extract value from its non-core hotel assets, streamline its portfolio and recycle capital following the onset of the COVID-19 pandemic”.
CDL expects a pre-tax gain of S$9.2 million from the sale of the 318-room Penang hotel in 2021.
“It will bring to three the number of non-core hotel asset disposals (of which one transaction has been completed) since the start of 2020, with a combined sales value of S$104.8 million and pre-tax divestment gains for CDL of S$50.3 million, of which S$23.9 million will be recognised in 2021,” it said.
In Q3 2020, M&C has exercised a put option to sell Copthorne Hotel Birmingham in the UK for £17.2 million (S$30.8 million). The sale will be completed in Q3 next year and result to a pre-tax gain of S$14.7 million.
It follows the sale of Millennium Cincinnati in the US for US$36 million (S$49 million), which was completed in February and resulted to a pre-tax gain of S$26.4 million.
Looking ahead, M&C expects “to complete one to two more disposals between now and the end of 2022”.
“It is currently evaluating other unsolicited offers for its non-core assets. These offers may be subject to re-zoning and regulatory approval for change of use from hospitality,” said CDL.
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