AP COVID Hospitality Bulletin Asia Pacific - September 2022

New AP Article Bangkok Dispatch: 4 ways to make deals coming out of the pandemic

Thailand is finally on its way to recovery, and the latest article features a brief introduction of the current situation and provides suggestions for independent hotel owners in response to the post-pandemic recovery. Click here for the full article!

Deals that matter.

The luxury hospitality group, Aman, has secured USD 900 million of investment from Saudi Arabia’s Public Investment Fund (PIF) and London-based real estate investment fund Cain International to accelerate its global expansion of hotels and branded residences. The newly injected investment would then bring the valuation of Aman to over USD 3 billion, and it would be used for the construction of the pipeline and the development and acquisition of the new sites for its Aman and Janu properties.

Transactions that matter.

1. lyf Ginza Tokyo

• Singapore-based Capital Land’s wholly owned lodging arm, The Ascott Limited, announced the acquisition of a freehold property in Ginza, Tokyo via the Ascott Serviced Residence Global Fund (ASRGF), which is in collaboration with the Qatar Investment Authority. The property will be refurbished into a lyf property as the debut of lyf in the city. While the details of the transaction are not disclosed, this marks ASRGF’s fourth acquisition in 2022, deploying close to S$400 million.
• Launched in 2016, the co-living brand by The Ascott, lyf, has been expanding its footprint in Asia Pacific and Europe. Earlier in June 2022, lyf acquired the first lyf-branded property in Australia through the ASRGF, and the 197-unit co-living property is set to open in 2024. Other acquisitions by ASRGF in 2022 include Somerset Hangzhou Bay Ningbo in China and Citadines Canal Amsterdam in the Netherlands.

2. Sir Stamford Circular Quay

• Singapore tycoon CK Ow’s Stamford Land Corporation has agreed to sell the 105-key Sir Stamford Circular Quay to JDH Capital at AUD 210.5 million (USD 143 million) or AUD 2 million (USD 1.4 million) per room. The property is located in the prime CBD location in Sydney, just minutes away from the Sydney Opera House and opposite the Royal Botanical Gardens.
• The property is set to be redeveloped into luxury apartments announced by the new owner. Prior to the sale, Stamford Land had already received preliminary approval to convert the hotel into residential buildings, and the second phase is likely to be approved in early 2023. The total redevelopment cost is estimated at more than AUD 380 million within 3 years.
• In 2021, it was reported that Stamford Land intended to sell the whole portfolio of 6 Stamford hotels across New Zealand and Australia at over 1 billion, but then the focus was changed to the redevelopment of Sir Stamford Circular Quay Sydney and Stamford Plaza Brisbane afterwards. The disposal of this property would bring a gain of S$80 million (USD 57.6 million) to Stamford Land.

3. Wanda Realm Beijing

• Located in the fringe area of Beijing city, the 308-key Wanda Realm Beijing was taken over by China-based Beijing Yingxie Property Investment at RMB 550 million (USD 80 million) or RMB 1.79 million (USD 259,000) per key. Opened in 2009, the property is at the centre of Beijing’s CRD (Culture & Recreation District) in Shijingshan District. There is no announcement of a potential change of the brand, and it is likely to be managed by Wanda after the sale.
• The property was part of the portfolio of 73 hotels that R&F Property acquired from Wanda in 2017. In June 2022, it was reported that R&F Property has started to actively look for opportunities to divest these assets, and the hotels for sale are mainly located in tier-three and tier-four cities in China. Before this transaction, R&F Property has successfully offloaded the 305-key Westin Fuzhou Minjiang at RMB 430 million (USD 62 million) or RMB 1.4 million (USD 203,000) per room in H1 2022.

4. Grand Hyatt Seoul

• Seoul Mirama Co., Ltd. (SMC) recently signed a memorandum of understanding (MOU) for the sale of the 615-key Grand Hyatt Seoul with Blue Cove Asset Management. Located minutes away from Itaewon Station, the sale is reported to be over KRW 1 trillion (USD 728 million). Grand Hyatt Seoul has a wide array of facilities, including 12 F&B outlets, a pool and spa, a business centre and meeting facilities catering for up to 2,000 participants.
• In late 2019, the property was sold to a joint consortium between Hong Kong-based PAG and Korea-based Inmark Asset Management by Hyatt Corporation at reportedly KRW 560 billion (USD 482 million). The adjacent parking lot has been sold for KRW200 billion by SMC in 2021, and it will be developed as a mixed-used facility.

Deal watch

The Westin Tashee, Taiwan

Together with the 27-hole golf course and staff accommodation, the 205-key The Westin Tashee in Taoyuan is for sale at an undisclosed asking price by the owner, Zhen-Zhi Huang. Opened in 2016, the property was converted from an independent hotel, and it was one of the first internationally branded resorts in Taiwan. Despite the lack of inbound travellers in Taiwan, the property is popular among domestic travellers, and the occupancy rate was over 90% during the summer of 2022. Additionally, this is the only resort that comes with a golf course in Taiwan. As a result, the sale price is projected between TWD 8 billion (USD 260 million) to over 10 billion (USD 320 million) considering the redevelopment cost of circa TWD 6 billion in 2017.

News that matter.

Korea

• Reopening its border to foreign visitors in April 2022, Korea starts to see the return of travellers after two years of closed borders. In July, Korea welcomed around 264,000 foreign visitors to the country, recording a 16% month-on-month growth. To attract more visitors to Korea, the government introduced visa waivers for designated countries and regions, including Taiwan, Macau and Japan in August, and the effective time has been extended to October as the policy almost doubled the number of visitors from these regions compared with the previous month.

Malaysia

• After five months of reopening to international travellers, Malaysia is seeing the rapid recovery of tourism in the nation. During January to July, Malaysia recorded more than 3.21 million tourist arrivals with a total revenue of RM 9.35 billion. The Ministry of Tourism, Arts and Culture of Malaysia also adjusted the target of tourist arrivals in 2022 to 9.2 million with tourism receipts of RM 26.8 billion, as the initial target has been achieved.
• The authority also aims to boost domestic tourism with more stimulus packages under the Accommodation Cluster of Tourism Recovery Plan 2022 (PRE2.0). Eligible Malaysians would be able to redeem free vouchers for a discount on accommodation in the country, which is expected to facilitate the recovery of the Malaysian tourism industry.

Thailand

• Having recorded over 40 million visitor arrivals in 2019, Thailand is seeing the return of travellers after lifting of travel restrictions. It is reported that more than 4 million visitor arrivals were recorded in the first eight months of 2022, and the government projects a total of 7.5 million visitor arrivals in the second half of 2022. This would mark a target of 10 million travellers in 2022 – approximately 25% of the pre-COVID figures.
• Other key indicators, such as tourism receipts, are also showing signs of recovery. The government expects to earn 400 million baht from tourist spending in the second half, and investors in the tourism business are slowly returning to Thailand, both local and overseas investors. Additionally, the government extends the period of visa-on-arrival in order to attract more travellers.

Reopening Status in Asia Pacific

While the majority of the Asia Pacific is fully open for inbound travellers and on its way to recovery, Greater China still requires quarantine and self-isolation to inbound travellers, ranging from 7 to 10 days. Addtionally, Japan is just slowly reopening, and it is expected to fully reopen to travellers in October this year.

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