TUAN Sing Holdings is a step closer to disposing of the Grand Hotel Group portfolio worth an estimated $615.8 million – but the company said no buyers have emerged yet.
The company has taken the second step to gain shareholders’ approval to sell four hotel properties, namely the Hyatt Regency Adelaide, Park Hyatt Canberra, Grand Hyatt Melbourne and Hyatt Regency Perth held by its 50%-owned jointly-controlled entity.
But since announcing its intentions to sell in April this year, Tuan Sing said no buyers have been identified and no sales prices have been offered for any and all of the hotel properties.
Hyatt Regency Adelaide is a leasehold title with 367 rooms, Park Hyatt Canberra also leasehold with 249 hotel rooms. The Grand Hyatt Melbourne and Hyatt Regency Perth are being offered on freehold titles with 548 rooms and 367 rooms, respectively.
The prized asset in the portfolio is the Grand Hyatt Melbourne last valued at $210 million before the takeover by the Tuan Sing and Morgan Stanley joint venture.
Tuan Sing said the hotel properties are currently valued at $615.8 million as at December 31 2007, which is above the $550 million book value Grand Hotel Group had in November 2006.
If Tuan Sing manages to fetch more than $615 million for the assets, the company will almost double its investment with Morgan Stanley.
The joint venture partners completed the $350 million takeover of GHG in early 2007.
And the company is also firm that it will not accept offer prices less than the NAV.
Tuan Sing said the rationale will unlock the fair value gains on the hotel properties.
“By obtaining a mandate from the shareholders to dispose of the hotel properties, the company will be able to seize opportunities to realise attractive returns for its shareholders in an expedient manner as and when opportunities arise.
“The proceeds from the proposed disposal, if it comes to fruition, will enhance the company’s balance sheets and enable the company to be better positioned to seize new investment opportunities as and when arise,” Tuan Sing concluded.
Australian Property Journal