Singapore based real estate investment trust CDL Hospitality Trusts(CDLHT) has entered into an agreement for the sale of Novotel Brisbane to ADFA Brisbane Pty Ltd, an independent third party purchaser, for A$67.9 million (approximately S$66.4 million).
The sale price is 6.9% or A$4.4 million higher than the original purchase price of A$63.5 million and represents a slight premium to the independent valuation of A$67.5 million as at 31 August 2020.
Located in Brisbane, Australia, the property is a premium 4.5-star hotel operated under the Novotel brand and comprises 296 guest rooms and suites with a gross floor area of 28,049 square metres over 15 levels, situated on a strata volumetric freehold title. Located in the central business district of the city, the property is within walking distance to the Central Station, Queen Street Mall, Eagle Street Pier and the Howard Smith Wharves precinct. The property was acquired on 18 February 2010 with a master lease which is expiring on 30 April 2021.
“As part of our proactive asset management strategy, the divestment of Novotel Brisbane allows us to recycle capital to maximise longterm value for Stapled Securityholders. With the essentially fixed rent structure of the property, we have achieved a recurring rental yield of at least 7.8% per annum during our holding period. Upon expiry of the master lease in April 2021, CDL Hospitality Trusts is likely to be exposed to the underlying trading conditions,” said Vincent Yeo, Chief Executive Officer of CDLHT’s managers.
”Hence, the divestment is an opportunity for us to exit the market as Brisbane is facing near-term challenges stemming from the COVID-19 pandemic and more hotel supply coming on-stream in the coming years. Given the current environment, the divestment represents a good result in the context of strengthening our balance sheet while managing to divest an asset in the uncertain global tourism environment at a sale price that is at a slight premium to the independent valuation,” he added.
 has entered into an agreement for the sale of Novotel Brisbane for A$67.9 million (appr. S$66.4 million).){kind=link}