Australia's iProsperity Group sells Sydney hotel for $54M

New hotel room supply in Sydney, Australia has driven declines in both occupancy, despite the increase in demand and hotel performance, according to a report from Horwath HTL Australia. 
Sydney, Australia Image: kitkatty007 / Pixabay

iProsperity Group, an Australian advisory for high-net-worth Asian investors, has sold its Park Regis Hotel in Sydney’s City Centre to the Yeh Group for $54.18 million.
The sale price represents a 23-percent increase on the original purchase price in less than two years.
The 122-room hotel takes up 10 floors of the 45-level mixed-use tower at 27 Park St, Sydney.
“We identified a clear strategic opportunity to buy the Park Regis in 2016,” said iPG Group CEO Michael Gu in a statement. “We predicted income would grow due to market dynamics. This prediction has been realized with favorable net income growth during our ownership.”
Recent refurbishments as well as increased sales and marketing efficiencies, stemming from StayWell Holdings management, are set to underpin higher average rates at the Sydney hotel.
In its recent Q1 2018 hotel market analysis report, iPG predicted that buoyancy in the hotel sector will continue for the remainder of the year, with Sydney to experience the highest activity levels and strongest ADRs. In the report, Gu noted Australia received 8.3 million international tourists year-over-year as of March. “This upward trend is showing no sign of abating and is resulting in a hotel buying frenzy in the absence of development opportunities.”
The deal is expected to close on October 31, and positions iPG to continue its growth trajectory toward $10 billion in assets under management by 2020.
The sale was handled by Gus Moors and Karen Wales of Colliers International. When the sale was first announced, Wales said in February Sydney's hotel market has seen strong performance in recent months. "The city boasted an occupancy above 88 percent in 2017, with average rate growth of 7 percent year on year. This is the largest increase since Sydney hosted the Olympics in 2000," she said. 

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