That Hilton logo is likely to come down sometime in May
Singapore-listed real estate conglomerate UOL Group continued to expand its hospitality holdings last week with the announcement of an agreement to purchase the Hilton Melbourne South Wharf hotel in Melbourne, Australia for A$230 million ($175 million).
UOL, which is the parent company of the Pan Pacific and Parkroyal hotel chains, is purchasing the 396 room property at 2 Convention Centre Place, next to the Yarra river, from HHR Conventions Pty Ltd, according to an announcement on Friday to the Singapore stock exchange.
The seller is a joint venture between New York Stock Exchange-listed real estate investment trust Host Hotels and Resorts, Inc and Australian developer Plenary.
The agreement marks the latest in a series of hotel acquisitions by Singaporean investors in Melbourne as the island financial hub’s investors continue to favor Australian opportunities.
Get Ready for the Pan Pacific Melbourne
UOL Group chairman Wee Cho Yaw has picked up another Aussie asset
UOL is purchasing the 30,688 square metre (330,000 square foot) property with the intention of rebranding it as part of the Pan Pacific Hotels chain. The group opened its first Pan Pacific in Australia, the Pan Pacific Perth, in 2011, and also has Parkroyal properties in Sydney and Melbourne.
The Hilton property has 91 years remaining on a 99-year leasehold, and the parties expect to close the transaction by May 31st of this year.
In a statement, UOL indicated that the acquisition is part of the group’s plans to expand its hotel property and management portfolios in the Oceania region.
“The Property will allow the Group to have a bigger presence in the city of Melbourne in addition to its Parkroyal Melbourne Airport,” the statement said. Adding that, “…the Acquisition may also allow the Group the opportunity to enhance the collective operating efficiency of the Group’s current hotels in Australia, through economies of scale and greater brand awareness of Pan Pacific and Parkroyal.”
Host Hotels bought a 75 percent stake in the Hilton Melbourne South Wharf Hotel from Plenary Group in a 2011 debt and equity deal which valued the property at $150 million. The two companies put the property on the market again in late 2015. Host Hotels and Resorts is the largest real estate investment trust in the US, and the Melbourne property was the Fortune 500 and S&P 500 REIT’s only asset in Australia.
Singaporean Investors Stay on the Hunt
UOL’s purchase of the Hilton Melbourne South Wharf is the latest in a string of Singaporean hospitality investments in Australia.
Property developer and investor Sing Holdings announced to the Singapore stock exchange in mid-October that it has purchased the Travelodge Docklands from Singaporean billionaire Michael Kum for A$107 million. The Travelodge acquisition followed just over one month after Singapore-listed Frasers Hospitality Trust announced an agreement to purchase the Novotel Melbourne for A$237 million.
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