Hong Kong's Gaw Capital acquires Singapore hotel for $203 million

A Hong Kong real estate private equity group is acquiring Singapore's Big Hotel for $203 million, according to The Straits Times. 

A Land Register search conducted by the paper found that investment holding company GCH (one of the directors of which is Gaw Capital president and managing partner Kenneth Gaw) had lodged a purchaser's caveat last month on the Big Hotel at a price of $203 million. 

The 308-room, 16-story property has apparently been on the market since shortly after it opened in May 2013, according to Mingtiandi. Local developer Andy Ong, who converted the 94,657-square-foot property from an office block, first began inviting expressions of interest from potential buyers through Colliers in July 2013. Then in September 2014, JLL posted its own notice that it had been appointed as the exclusive agent to market the freehold property on a sale-and-leaseback basis. In late September, GCH filed a purchaser’s caveat with Singapore’s Land Register to purchase the property.

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When contacted, Gaw Capital told the Straits Times that it was "a bit too early for us to talk about this project, especially now (as) the transaction has not been closed yet."

Robert McIntosh, executive director, CBRE Hotels Asia-Pacific, told the paper that hotels in Singapore, in the medium term, can still offer a good buying opportunity.

Gaw Capital has had a busy year: In July, an investor consortium advised and managed by the investment company purchased the InterContinental Hotel Hong Kong for $938 million. In June, the company bought a portfolio of real estate projects in Vietnam from Indochina Land Holdings 2 Ltd. for $106 million, including the Indochina Plaza in Hanoi, Hyatt Regency Danang and two additional land development projects in Danang and Ho Chi Minh City. Earlier this month, Gaw reportedly acquired an office building in Seattle for $49.5 million, after it led the $711 million purchase of Seattle’s Columbia Center in August.

Going back further, the father of Gaw Capital partners Goodwin, Kenneth and Christina Gaw acquired a stake in Myanmar’s Strand Hotel in 1992 that the family eventually expanded to a 50-percent holding. Over the years, the company has built a hospitality portfolio of 18 properties in Asia and the U.S., including properties under its own Hotel G brand in San Francisco, Bangkok, Hong Kong and, in China, the cities of Shenzhen and Beijing.

Singapore's hotels
Earlier this year, real estate and property management firm CBRE reported that midscale and economy hotels appear to be doing better than their higher-end peers in Singapore, a famously upscale and expensive city for hotels. The new data reverses a trend seen in previous quarters.

Occupancy rates for midscale hotels rose 2.8 percent in the first six months of 2015 to hit 83.8 percent and occupancy rates at economy hotels rose 1.2 percent to 82 percent. Conversely, occupancy rates among luxury hotels dropped 5.2 percent to 80.6 percent across the city-state.