Singapore property tycoon Ong Beng Seng is raising some cash as the hospitality investor’s primary publicly traded vehicle announced the sale of a London hotel over the weekend.
Hotel Properties Ltd, which is 55.4 percent owned by Ong, said on Saturday that a joint venture between the SGX-listed firm and a private vehicle controlled by its largest shareholder has agreed to sell the Hilton London Olympia and its operating company for £40.8 million ($53.2 million).
The 80:20 JV of HPL and Ong’s Como Holdings anticipates a gain of S$29 million ($21.3 million) from the disposal of the hotel near the Olympia Exhibition Centre at the western end of Kensington High Street, the company said Saturday in a filing with the Singapore Exchange.
The sale of the 405-key property comes as Cuscaden Peak, a consortium led by Ong and backed by units of state holding firm Temasek, prepares to acquire the real estate assets of Singapore Press Holdings for S$3.9 billion ($2.9 billion) after a takeover battle against Keppel Corp.
Two-Thirds Off
While HPL is booking a gain on the sale of the property near London’s Olympia Exhibition Centre, the deal represents a more than 64 percent mark-down on the £114.85 million that the joint venture had paid to acquire the property in August of 2017. At the stated compensation, HPL is achieving a rate of £100,740 per key for the hotel.
HPL, where Ong serves as managing director, announced the sale of the London property less than one week after the company released its annual report, which showed a loss attributable to owners of the company in 2021 of S$7.7 million ($5.64 million) on revenues of S$344 million.
While that result represented the second straight year of losses for the firm, the final figure was a marked improvement over the group’s S$177.5 million loss on revenue of S$259 million in 2020. At the end of 2021 HPL had current liabilities of S$276 million against current assets of S$287 million, with the company currently nearing completion on a pair of office projects in central London, Paddington Square and phase one of Bankside Yards.
SPH Win
While Ong’s hotel firm, which is best known for its portfolio of Hard Rock hotels and cafes, as well as the Six Senses resort chain, has been struggling, the tycoon’s joint effort with Mapletree Investments and CapitaLand to buy out the non-media business of Singapore Press Holdings was a major win.
After Keppel Corp last August announced a plan to acquire SPH’s property business and other non-media holdings, Cuscaden Holdings, a joint venture between Ong and two of Singapore’s largest real estate investment firms produced a sweeter bid in late October.
Cuscaden ultimately won control of the SPH businesses last month after SPH’s shareholders voted last month to accept the consortium’s $2.9 billion buyout offer.
Including the Hilton London Olympia, HPL owns stakes in a portfolio of 39 hotels and resorts across 15 countries, according to its annual report, including the Four Seasons Singapore and the Hilton Singapore, as well as venues operating under the Hard Rock, InterContinental and Marriott brands.
Together with wife Christina, Ong has a net worth of $1.71 billion, according to estimates by Forbes, which placed the couple at No.25 on its most recent Singapore rich list.
London Frenzy
The buyer of the London property was identified only as an unrelated party paying wholly in cash. The transaction is not expected to have any material effect on the net tangible asset value per share of the group.
HPL’s sale of the Hilton London Olympia comes at a time of furious buying and selling in the UK capital’s property market, driven largely by Asian investors.
Last week, Mingtiandi reported that Chinese state-owned developer Poly Global had sold its 5 Fleet Place office building in the City of London for £191 million ($250.6 million), with veteran Hong Kong politician James Tien emerging as the new owner.
In March, Guangzhou R&F Properties agreed to sell its Vauxhall Square mixed-use project to Hong Kong-based Far East Consortium for £95.7 million ($124.8 million), with the cash-strapped developer expecting to record a loss of more than £68.8 million ($89.9 million) on the disposal.
In February, HKEX-listed Chevalier International announced that it had agreed to purchase 30 King Street in the City of London from the BBC Pension Trust for £45.9 million, marking its second purchase of an office asset in the UK capital in less than one year.
In late January, China Vanke announced the sale of its Ryder Court office building in London’s posh West End for £132 million ($178.2 million) to M&G Real Estate, chalking up a modest gain on the disposal after holding the Grade A asset for five and a half years.
Early that month, privately held Hong Kong developer K&K Property Holdings purchased 15 Adam Street in London’s West End from Sweden’s Stockholms Enskilda Bank for £66.1 million, with that investment marking the fourth acquisition in the posh district within the past two years by the company led by Bossini heir Raymond Law and his son Kino.
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