TriO is selling The Woolstore 1888 by Ovolo near Sydney’s Darling Harbour (Image: Google)
Australian hospitality group Ovolo has launched a dedicated investment and asset management arm dubbed TriO Capital to drive expansion efforts, with an initial focus on Asia Pacific.
Named after the three O’s in Ovolo, TriO is led by managing director Tim Alpe, Ovolo’s former chief operating officer for Hong Kong and Indonesia, the group said in a release. TriO’s portfolio comprises 12 assets across the eastern seaboard of Australia, Kuta Beach in Bali and Hong Kong.
By leveraging its relationship with preferred operating partner Ovolo Hotels, TriO aims to bridge the gap between equity and operator in order to safeguard the return potential of assets and remain nimble, creative and more engaged than larger asset management platforms.
“I am excited to establish TriO Capital, to optimise hospitality real estate through effective capital expenditure and strategic asset enhancements,” Alpe said. “Our experience as owners and operators means we can effectively enhance cash flows, increase the value of our investments, and deliver long-term returns for our partners, be it Ovolo branded or otherwise.”
Sydney Hotel Disposal
The reorganisation comes as TriO prepares to sell one of its boutique hotels in Sydney, The Woolstore 1888 by Ovolo, in a bid to fund the group’s continued growth. The 90-room hotel in the inner suburb of Pyrmont occupies a restored heritage building near trendy Darling Harbour.
TriO Capital managing director Tim Alpe
“The sale forms part of our strategic plan to recycle capital to further grow throughout Australia, New Zealand, and selected Asia Pacific target markets,” Alpe said.
The group has tripled its room count in the past five years, including adding a new build in Melbourne and an extensive refurbishment and rebranding in Bali.
TriO is aimed at seizing on opportunities across the region while still having “skin in the game”, according to Ovolo executive chairman Girish Jhunjhnuwala, who founded the group more than 20 years ago.
“As trading fundamentals for the industry return, we have the expertise to unlock the full value of any asset and deliver stronger yields and enhanced returns,” Jhunjhnuwala said.
Regional Deals Down
Hotel investment volume in Asia Pacific tumbled 51 percent year-on-year to $3.13 billion in the first half of 2023 as macroeconomic challenges and the rising cost of debt stubbed out dealmaking in the hospitality segment, JLL reported this week.
Japan bucked the regional trend, with investment activity in the country’s hotel sector jumping 56 percent year-on-year to $1.54 billion during the January-June period, while volume in Australia and New Zealand surged 189 percent to $820 million. But Singapore saw investment dive 95 percent to $30 million as China’s fell 76 percent to $300 million.
The region’s big-ticket hotel transactions in the first half included KKR and Gaw Capital Partners’ acquisition of the Hyatt Regency Tokyo from Odakyu Electric Railway for a reported JPY 57.1 billion ($410 million), as well as BentallGreenOak’s purchase of the Rihga Royal Hotel Osaka for around JPY 50 billion ($360 million).
The Singapore hotel market stirred to life earlier this month as Pan Pacific Hotels Group, the hospitality arm of property giant UOL Group, announced the sale of the Parkroyal on Kitchener Road in Little India for S$525 million ($389 million) in the city-state’s largest hospitality deal ever.
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