Lasalle Investment Management (LIM) has entered the Singapore hotels sector in a big way. The investment manager has quietly acquired the Swissotel Merchant Court from Colony Capital in January and another un-named hotel more recently, it has emerged.
In December 2006, LIM acquired a hotel development site on Bencoolen Street for $73 million - making three hotel acquisitions here in less than six months.
David Edwards, regional investment strategist at LIM, said that it has ‘technically’ acquired its third hotel here but declined to give details until the deal is finalised. He also declined to say what it paid for the Swissotel Merchant Court at Clarke Quay.
Mr Edwards did say that LIM ‘likes the hotel segment in Singapore’, and in general, the ‘limited service hotel segment in Asia’.
‘This is a segment we are looking to develop in partnership. We are very keen on developing this partnership arrangement,’ he added.
Mr Edwards did not specify who this partner is. However for the Bencoolen Street site, LIM will be partnering the Accor Group, which owns the Sofitel, Novotel, Ibis and Mercure hotel brands.
Mr Edwards said: ‘We have been a long term investor in hotels so we are very familiar with the sector and it fits in nicely with the Singapore growth story.’
The Swissotel Merchant Court was part of the 41 properties in the Raffles Hotels and Resorts chain acquired by Colony Capital in 2005 for $1.45 billion from CapitaLand’s Raffles Holdings.
It is not known if Colony Capital is selling any more of its hotels here, but an industry source who did not want to be named said: ‘I am surprised they have started selling so soon.’ The same source priced the Swissotel Merchant court at between $300 million and $400 million.
Mr Edwards was speaking at a press briefing for LIM’s Investment Strategy Annual, where he also said: ‘Investors can continue to earn relatively attractive returns in real estate by adapting to an expanded universe.’
About 60 per cent of LIM’s investments in the Asia Pacific are in Japan, with another 3 per cent based in China.
Source: The Business Times, 03 March 2007
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