AP COVID Hospitality Bulletin Asia Pacific - August 2021
Transactions that matter.
1. Travelodge Australia Hotel Portfolio
- Partners Group, a leading global private markets firm, has, on behalf of its clients, agreed to acquire a portfolio of eleven Travelodge hotels in Australia with a Gross Asset Value of AUD620 million (USD464.5 million), from Mirvac and NRMA. Partners Group will acquire the portfolio in partnership with Singaporean sovereign wealth fund GIC and Australian hospitality operator Salter Brothers.
- The portfolio, which is the largest of its kind to transact in Australia, is diversified across key metropolitan centers, including Sydney, Melbourne, and Brisbane, and consists of over 2,000 rooms. Acquiring the portfolio will provide an opportunity to capitalize on the long-term relative value of Australia's hospitality sector. The portfolio is also set to benefit from a nationwide campaign launched this year that aims to increase domestic tourism. Partners Group and its acquisition partners will work on a transformational value creation plan that aims to improve the utilization of the hotels through initiatives including rebranding, select upscaling, and widening their visibility through the expansion of loyalty and rewards programs across a wider distribution channel.
2. Manathai Portfolio
- KSL Capital Partners-backed Outrigger has come back to the Thai market with a bang. Picking up three properties in Phuket, Phang Nga and Koh Samui, the owner-operator did not waste time rebranding the properties.
- While a price was not announced rumor has it to be in the range of THB1-1.5 billion, for a range of US$80-120k per key.
- Manathai Hotels & Resorts was launched in November 2014 and faced some challenging and turbulent times in the Thai tourism market over its close to seven years in operation. Fully tourism oriented, the pandemic called for a reset in the groups business.
- At the same time, Outrigger had seen its portfolio in Thailand decrease over time. This is a welcome move back to the region after ending its operation at Laguna Phuket and Phi Phi Island.
- This latest transaction is a sign of a continuing trend of consolidation in the hotel operator scene. In the current environment, smaller, asset-heavy owner-operators may be seeking a lifeline.
3. 18 Sung Wong Toi Road, Kowloon
- Warburg Pincus-backed Weave Living has committed to the acquisition of a 99-room co-living property in the area of Hong Kong's Kowloon City and Kai Tak neighborhoods.
- The property was previously operated by Ootopia, which is backed by Hong Kong-based fund real estate manager Arch Capital and Singapore-based hotel management firm Wanderwonder Hospitality and opened in 2019. Prior to that, the property was known as Bridal Tea House, owned and operated by a Hong Kong family business.
- Evidently, the Hong Kong co-living market continues to evolve and deep pockets seem to put Weave ahead of the pack in this competitive environment. Further distress among fund-backed operators may see more opportunities come to market in the near term.
COVID News that matter.
Vaccination Leaderboard: where is your country ranked at?
Updates on key countries:
- The Summer Olympic Games are in full swing while Japan sees a rise in cases from the delta variant at around 10,000 daily around 2,000 of which were recorded in Tokyo.
- Japan expanded on Monday 2 August a COVID-19 state of emergency covering the capital and Okinawa to include Osaka and three prefectures near Tokyo due to a recent spike in coronavirus cases amid fears of a medical system collapse during the Olympics.
- Chiba, Kanagawa, Saitama and Osaka prefectures were added to areas under the emergency through Aug. 31. The emergency period in Tokyo and Okinawa was also extended to the end of the month from the initially planned Aug. 22.
- Establishments serving alcohol or offering karaoke in the six prefectures under the emergency are asked to close during the period, with the government providing money for compliance. Those not serving alcohol are requested to close at 8 p.m.
- Meanwhile, athletes compete in hopes for winning a gold medal with some exciting events and upsets so far. We find this a welcome distraction in the absence of travel opportunities.
- RE: Phuket Tourism Sandbox model: by end of July, the Phuket sandbox registered 12,395 arrivals in July with 292,832 room nights booked until the end of September. 113 foreign visitors joined the Samui Plus program, comprising mostly Europeans with some visitors from US and Hong Kong. While Koh Samui had registered 50 new cases, only one was associated with tourists. Over in Phuket, authorities reported 36 new cases on 1 August, two of which were from tourists.
- Meanwhile the nation as a whole registered more than 18,000 new cases for three consecutive days and the daily death toll was 147 on 2 August. Hospital infrastructure and related resources are coming under severe strains.
- Amid a national surge in cases, Phuket will ban travel from the rest of the country from Aug. 3-16 to try to stop coronavirus cases from spreading to the resort island. Overseas visitors will be largely unaffected.
- The second half of July saw Singapore battling a new wave of COVID-19 cases. New infections peaked on 20 July at 195, and after initially easing off have remained persistent at 120 to 130 new cases daily over 10 days.
- The recent upsurge in infections can principally traced to two clusters, the largest being at the Jurong Fishery Port, which is linked to more than 1,072 cases. The second-largest cluster is linked to various KTVs, which has 251 cases. The Ministry of Health had also announced 10 new clusters, including a community hospital and a dormitory.
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