Singapore’s Jaleel Family Buy Hotels in Perth, Melbourne for $70M

Asian investors are shrugging off concerns about the impact of Middle East turmoil on tourism and continue to invest in Australian hotels, with Singapore’s Jaleel family picking up a pair of hospitality assets in Melbourne and Perth for a total of A$103.5 million ($70.3 million).

JD Properties, an investment firm backed by the Jaleel family, who made their fortune in Singapore worker accommodation and other real estate, has settled on the purchase of the Pensione Hotel in Perth for A$28.3 million, while a hotel investment firm controlled by the same clan has picked up the Hotel Indigo in Melbourne for A$75 million, according to brokers involved in the deals.

Australia’s array of tourist spots and events, coupled with a shortage of new supply, are pushing vacancy lower and room revenues higher, according to Mark Durran, a broker at HTL Property, who advised on JD Properties’ Perth purchase, sees the boom driving more hotel transactions this year. 

“Despite all the noise and headwinds we hear about on a daily basis, hotels continue to transact with domestic and cross-border capital. In the last 12 months, the cross-border Asian money coming into Australia has increased significantly,” Durran told Mingtiandi on Friday.

Visitors Boost Revenue

JD Properties is part of an investment empire built by Mohamed Abdul Jaleel, an Indian immigrant to Singapore, who built MES Group into a $78 million per year company after starting his career washing cars and working as a construction watchman.

An early entrant into Singapore’s worker housing sector, Jaleel expanded MES’ portfolio to an estimated 25,000 beds, according to Singapore’s National Library Board. Jaleel has also invested in logistics and offices, in addition to hotels and worker housing.  

With Australia seen as a safe haven for capital, overseas buyers are “ignoring the noise” and focusing on fundamentals, Durran said, noting that the country typically records around A$2 billion of transactions in the sector annually. Western Australia and Queensland, which rely heavily on resource industries which require accommodation for contract workers, have experienced the strongest growth in revenue per available room (RevPar) and yield.

“In those two markets, the fundamentals are solid, there’s RevPar growth and then that translates into good yields coming out of hotels. You can get seven, eight, nine-percent-plus type yields in these markets depending on the type of hotel and location,” Durran said, noting that Perth has also had strong international arrivals in recent months.

The Pensione Hotel is located about 12 kilometres (7.2 miles) from Perth’s airport, with the deal marking the fourth major hotel deal in the city this year. JD Properties, which manages the Jaleel family trust’s property investments, closed the transaction in April at a yield of about 8.75 percent, Durran said, purchasing the 98-room property at 70 Pier Street from a private syndicate which included Naos Asset Management chairman Warwick Evans. 

Family Business

High Street Holdings, the asset management and acquisition arm of JD Properties, has acquired the Hotel Indigo in Melbourne, according to a recent LinkedIn post by property consultants Napier & Blakeley.

“This acquisition highlights continued confidence in Melbourne’s hotel sector and the growing demand for high-quality, experience-driven assets,” Napier & Blakeley said in the post. The Sydney-based consultant advised on the due diligence phase.

The asset is a 216-room boutique hotel located on a 1,782 square metre (19,200 square feet) corner site at Flinders Lane and Spencer Street near Melbourne’s Southern Cross Station, about 23 kilometres from the city airport.

The seller, private equity real estate firm Pro-Invest Group, did not respond to a request for comment. High Street and JD Properties did not respond to a request for comment on either of the transactions, which came after the Jaleels bought the George Hotel in Brisbane’s financial centre for A$34 million at the end of last year, which brought the family’s Australian hotel portfolio to an estimated A$150 million.

The family first invested in Australian hotels in 2021, according to High Street’s website, and in July 2022 bought the Peppers Perth Kings Square in Perth, before rebranding it to the Rydges Perth Kings Square. High Street partners Daniel Yip, Giuliano Esposito and David Marriott left JLL’s hospitality group in 2021 to help found the firm, according to the website.

Big Buyers 

The Jaleel family acquisitions come as Asian investors have made some of Australia’s biggest hotel deals this year. 

In March Sydney-based Wentworth Capital and Sun Hung Kai & Company of Hong Kong purchased the Novotel Sydney Darling Harbour and the contiguous Ibis Sydney Darling Harbour from the Abu Dhabi Investment Authority for A$390 million, giving them 781 rooms in the popular tourist area. 

Taiwanese billionaire Lin Chen-hai in May bought the Paradise Centre and Novotel Surfers Paradise on Queensland’s Gold Coast from Abu Dhabi Investment Corp and Challenger Life for $346.5 million, described by brokers as the largest purchase of a combined hotel and retail complex in the Australian state. 

Among Asian investors in Australian hotels, Singaporeans are showing the most interest, Durran said, with Thai and Indonesian groups also looking at hospitality assets in the country. 

“The buyers are generally experienced players, they have portfolios they are adding to and they have the confidence to buy,” Durran said. “They are high conviction buyers, they are selective, they know what they want and when it comes up, they go hard and transact.”