Singapore-based Chip Eng Seng is claiming its another stake in Australia's hotel market. The construction and property group has acquired an Adelaide hotel managed by AccorHotels Group in a A$43-million acquisition.
According to Chip Eng Seng, the group purchased the six-story, 245-guestroom Mercure & Ibis Styles Grosvenor Hotel, an Adelaide CBD hotel, with internal sources and external borrowings. However, the hotel buy is not expected to significantly impact the group's net tangible assets and earnings per share in the financial year 2017.
AccorHotels Group put the Mercure & Ibis Styles hotel up for sale in mid-September 2017 after appointing JLL to market the property. It was offered with Accor management in place or with vacant possession to potentially generate strong cash flow and a redevelopment opportunity. “The property occupies a freehold site of about 3,794 square meters offering an array of potential redevelopment options. With recent improvement in Adelaide’s hotel trading performance and the hotel’s central location, it is well-positioned to capitalize on the future momentum of the city’s ongoing growth as the local tourism market goes from strength to strength,” Mark Durran, MD at JLL Hotels & Hospitality, said in a statement.
This new acquisition is the construction group's second in the region within the last six months. On Nov. 2, 2017, Chip Eng Seng bought Perth's The Sebel Mandurah—an 84-guestroom hotel also managed by Accor—in an A$15-million deal.