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Starwood city hotel sale could yield $450m
BEN WILMOT THE AUSTRALIAN APRIL 17, 2014 12:00AM
Starwood city hotel sale could yield $450m
The Sheraton on the Park in Sydney’s CBD. Source: News Corp Australia
THE US giant Starwood Hotels & Resorts is likely to tap JLL’s Hotels & Hospitality Group to sell its remaining Australian property — Sydney’s $400 million-plus Sheraton on the Park — as the company shifts to a global “asset-light” approach.
The pricing — which could reach $450m — is likely to be partly determined by Starwood’s desire to take on a long-term management contract and a likely overhaul of the property, which last had a major revamp in 2003. The sale, flagged by The Australian, is expected to be one of Australia’s biggest hotel deals.
The move comes as the race for the city’s Sofitel Hotel, being sold by LaSalle Investment Management, comes to a head, with parties competing to buy the hotel for about $195m.
Contenders for that landmark 436-room, heritage-listed hotel have included Singapore hotel owner CDL, Korea’s Millennium Group and Indonesian private equity player Sunardi Loekman.
US hotel owner Host Hotels & Resorts, Inc, is now heading the pack of buyers.
The sale will show the lift in hotel prices in Sydney as the property sold just three years earlier for about $130m.
The US-listed Starwood Hotels & Resorts told analysts in February that it would pursue real estate asset sales around the world. At that time, Starwood chief financial officer Vasant Prabhu said there were more buyers, including private equity firms, seeking to deploy larger amounts of capital into hotel portfolios.
In 2009, Indonesia’s Rajawali Group, which has extensive hotel and resort interests, came close to buying the five-star Sydney hotel for more than $250m.
Sheraton on the Park managing director Sean Hunt has not commented on the future of the 557-room Sydney hotel fronting Elizabeth Street, which the company has owned for more than two decades.
However, in a recent statement, the hotel company said that as part of its “ongoing asset-light strategy Starwood Hotels & Resorts Worldwide continues to explore opportunities to sell its owned real estate at the right time, on the right terms, to the right owners creating value for our shareholders”.
“A potential sale of our Sheraton property in Sydney, Sheraton On The Park, is consistent with that strategy,” the company said. Starwood said that it “will look for a long-term partner who shares our vision for the asset they purchase to be a brand-enhancing property”.
“We intend to continue operating this iconic hotel under a long-term management agreement for many years to come,” the company said.
A developer's keen eye for the lie of the land
Published on Apr 22, 2014 1:27 AM
CDL owner Kwek Leng Beng says he wants the "Hong Leong Group to be recognised as a major Singapore company, one that has spread its wings to the far corners of the world, doing Singapore proud". -- ST PHOTO: MARK CHEONG
By Lee Su Shyan Money Editor
MOST Singaporeans know of listed City Developments and its many condominiums around town but few probably realise just how long the owner Kwek Leng Beng has been at the top of his game.
CDL has been developing homes for the past 50 years and remains among the largest residential players here - no mean feat in a fiercely competitive sector that has seen many prominent players fall by the wayside.
One number alone tells the story of CDL's resilience and success: Nearly one in every five private homes sold last year was built by the firm and other private units of parent Hong Leong Group.
The company's ability to navigate the rough and smooth of Singapore's property market is largely down to its determination to stay ahead of its time. Long before expanding overseas was a buzzword, CDL was venturing abroad, snapping up hotels in Penang, Manila, Taipei, London and New York in the 1980s and 1990s.
The purchase of the Copthorne chain for £219 million in 1995 led to the launch of Millennium & Copthorne Hotels, which is now listed and the largest Asian-controlled hotel chain with about 120 properties across the world.
CDL was also the first company to sponsor a hospitality real estate investment trust (Reit) here; the CDL Hospitality Trusts' portfolio includes Orchard Hotel.
The firm is behind the Sail, the world's tallest residential property when it was launched in 2004 and still a landmark in the Marina Bay area. The group was also one of the first to champion green buildings, with its City Square Mall and other projects winning awards for being eco-friendly.
But while CDL has kept its title as one of the largest developers and commercial landlords in Singapore, it has a somewhat staid reputation. It remained focused on the Singapore market even as players such as CapitaLand and Keppel Land embarked on ambitious projects in China while SC Global oozed glitz and luxury with its upmarket developments.
But recent moves by CDL signal that it is ready to ramp it up.
In an interview after receiving the Real Estate Developers' Association of Singapore (Redas) Lifetime Achievement Award recently, Mr Kwek, 73, the firm's executive chairman, talked about his vision for the group. He told The Straits Times: "We need to bring fresh perspectives to a rapidly changing and increasingly competitive business landscape."
A new CEO
ONE change, and it is a big one, is to have a newly-created chief executive officer's post, and then to appoint someone from outside the firm - Australian Grant Kelley.
The 49-year-old has been given a tall order - to relook the entire operation and make the company more productive.
Mr Kwek likens the job to cutting "a document down from 50 pages to 20 without losing its essence". That refers not just to the property development business but the hotel business as well where good management can make or break the bottom line.
Mr Kwek admits: "The company needs to evolve and evolving takes place when there are new people on board."
He is confident Mr Kelley's private equity background with Apollo Global Management will enable him to lead the company in its revitalisation drive.
Overseas moves
BESIDES appointing a new CEO, the group, whose property projects have been practically all Singapore-based, is expanding overseas in a big way.
Times have changed. Once, investors would have just bought foreign shares, for example in Hong Kong-listed Sun Hung Kai, to get overseas exposure in property, but investors and analysts now prefer companies to develop property overseas for better dividends. The Singapore market is facing headwinds, analysts say, and foreign markets offer better returns.
And CDL is taking this feedback to heart.
Mr Kwek said: "We need to be less Singapore-centric in light of the current limited opportunities domestically... We want to build an international external wing." Mr Kelley, with his management and private equity experience, has the fresh outlook necessary to achieve that, Mr Kwek added.
CDL is making moves in Britain. Mr Kwek negotiated an attractive deal to buy 30 carpark spaces near Harrods in London's upscale Knightsbridge area. The aim is to get planning permission to develop an apartment block on the site. In February, CDL sealed a deal for a site in Croydon, an area that is being rejuvenated.
In China, the company should soon be able to see the results of its efforts over the past few years.
The 126-unit Eling Residences in Chongqing, and the Suzhou Hong Leong City Centre mixed development, on a 45,455 sq m site, will likely start selling in the second half of this year. Sales of Huang Huayan, a mixed-use project in Chongqing, will start next year.
On the China market, Mr Kwek said: "Urbanisation - everyone must have a home, why can't we feed into the urbanisation programme? I am confident of China but the process of getting our projects done or getting things done, take a longer time."
Closer to home, Mr Kwek is also keen on Australia, New Zealand and Japan. "We have been trying to expand overseas, starting with one platform in London, in New Zealand with property investments."
Succession planning
FAMILY members hold various roles in the diversified Hong Leong Group of more than 200 companies. The family members include Mr Kwek's nephew Vincent Yeo, 45, CEO of CDL Hospitality Trusts, and niece Patricia (Vincent's elder sister), who is group finance director at Hong Leong Investment Holdings.
Mr Kwek's son Sherman, 38, heads China operations and is also CDL's chief investment officer, and nephew Kwek Eik Sheng, 32, is the firm's newly-minted chief strategy officer. With both reporting to Mr Kelley, the question is whether this is the next step in grooming the younger generation.
Mr Kwek has worked under his own father, Hong Leong Group founder Kwek Hong Png, a man with a reputation for being a tough taskmaster.
Perhaps with that in mind, Mr Kwek said: "Of course it is difficult with children. Some may listen, depending on their character, but if they are intelligent, they will realise that they can learn many lessons.
"If a company owner has family members, some of whom are interested in working in the group, we would still need senior family members to mentor them, plus we need external people like Grant Kelley - to expose the younger ones to a much wider experience than what they can derive from within."
In any case, if anyone is asking, Mr Kwek is not ready to let go of the reins, stating for the record that he is not thinking of retiring.
He said: "I feel young at heart. I feel I can contribute to the business as well as to society. I've seen friends retire at 35 and are bored after two years of travelling around the world."
After all, aside from CDL and hotel unit M&C, Mr Kwek, from his 61st-storey penthouse office at Republic Plaza, has to oversee other Hong Leong Group entities.
These include Singapore's largest finance company Hong Leong Finance and Singapore Exchange- listed Hong Leong Asia, which makes more than two million fridges, freezers and air-conditioners a year for China and other markets.
Hong Leong Asia has an "international" bent too, with more than 80 per cent of its revenue derived from businesses outside Singapore, mostly in China. Hong Leong Asia's China Yuchai makes half a million diesel engines for trucks a year, for example. These companies are run by professional managers.
So until it is time to hang up his chairman's hat, Mr Kwek is sticking to some basic principles: "Don't over-leverage. Today I am in a very good position, many of my private companies have no borrowings, my listed ones have low borrowing, so if there is an opportunity, I have the firepower to go ahead fast."
Standard Chartered recently estimated that CDL could surprise with $3 billion worth of investments overseas.
Mr Kwek added: "I want the Hong Leong Group to be recognised as a major Singapore company, one that has spread its wings to the far corners of the world, doing Singapore proud."
sushyan@sph.com.sg
M&C finds room for acquisitions and expansion
Published on Apr 22, 2014 1:27 AM
The Grand Millennium Hotel Sulaimani opened last month. It is the third in Iraq managed by Millennium & Copthorne. -- PHOTO: MILLENNIUM & COPTHORNE HOTELS
WHILE the domestic property market takes a breather, it is all systems go at CDL's hotel arm Millennium & Copthorne (M&C).
M&C owns and manages or operates a network of 120 hotels spread over many countries spanning China, Europe and the United States.
And if any Singaporean were to venture as far afield as the oil- rich Kurdistan region of Iraq, they can expect Singapore standards of service at the Grand Millennium Hotel Sulaimani. The hotel was opened just last month - the third in Iraq managed by M&C.
M&C is the largest Asian- owned hotel group in the world with about 32,000 hotel rooms in more than 20 countries.
Even as new hotels are being added to the company's portfolio, M&C has a healthy war chest of some $800 million for acquisitions and revamps.
M&C chairman Kwek Leng Beng says: "Today, hotel capital values have gone up quite a lot but earnings have not caught up - internationally as well as in Singapore. But we continue to have a vision to buy, search.
"At the same time, we add value to our existing hotels. With the right concept, we might be able to increase rates by 30 to 50 per cent. That's as good as buying or building a hotel, which would mean a gestation period of three to four years, a duration with no income."
In recent months, M&C has made three acquisitions in global cities, investing close to $600 million in the process.
The first, the Wyndham Grand hotel in Chelsea Harbour, London, bought for £65 million (S$136 million), is a Conrad Hilton all-suite hotel. The second was the Novotel New York Times Square purchased for US$273.6 million (S$343 million). The Boscolo Palace Roma in Rome, bought for €65.5 million (S$113 million), was M&C's first hotel in Italy.
Construction of the group's first hotel in Japan, in Tokyo's Ginza district, is set to be completed by the end of the year.
In total, there are more than 30 hotels in the pipeline worldwide, with many of the future hotel openings in the Middle East.
On the capital markets front, a listing on the Singapore Exchange may be in the offing for M&C's associate, First Sponsor Capital, which develops properties in China.
LEE SU SHYAN
Sunday, May 11, 2014The newest joint venture condominium development by City Developments (CDL), Hong Realty and Hong Leong Holdings has received a strong response ahead of its launch next Saturday. More than 3,000 visitors visited the Coco Palms showflat last weekend - the first weekend of its preview, CDL said yesterday. Located in the Pasir Ris Grove estate, the 446,857 sq ft resort- themed condo is a five-minute walk from Pasir Ris MRT station and bus interchange as well as White Sands shopping mall. The 99-year-leasehold development comprises 944 condo units in 12 blocks of 12- to 16-storey buildings. Units range from one- to five- bedroom apartments and penthouses. Some of the three- and four-bedroom units will have a "dual key" feature. The sizes range from 463 sq ft for a one-bedroom unit to a 3,111 sq ft penthouse. The smallest one-bedroom unit will be priced from $498,000. In its statement, CDL credits the rapid development of business parks, leisure facilities and educational institutions in the east coast for fuelling demand for residences in the Pasir Ris area. The coast is another attraction for home buyers in the area. CDL group general manager Chia Ngiang Hong said: "We look forward to welcoming more homebuyers at the showflat preview this weekend and expect a strong take-up when sales commence on May 17." Coco Palms, set to be completed by 2019, is CDL's fifth development in the Pasir Ris Grove estate. Three joint venture projects - Livia, NV Residences and The Palette - are fully sold. The fourth project, D'Nest, was launched in March last year and is 94 per cent sold. - See more at:
http://business.asiaone.com/news/cdl-exp...9Bfct.dpuf
Pasir ris will see the biggest supply in condos TOP.
Too many condos.
CDL sees 13.1% fall in net profit for Q1
Drop mainly due to absence of gains made in same period last year
Published on May 15, 2014 1:14 AM
Joint venture projects like The Inflora contributed to the firm's property development segment. -- ST PHOTO: KUA CHEE SIONG
By Rachael Boon
PROPERTY giant City Developments (CDL) suffered a decline in first-quarter earnings, but the main reason was the absence of gains made in the same period last year.
Net profit fell 13.1 per cent to $119.7 million for the three months to March 31, while revenue dipped 5.4 per cent to $734.2 million year-on-year.
The one-off gains in the first quarter last year were from the disposal of strata units in Elite Industrial Building I, Elite Industrial Building II and Citimac Industrial Complex. If these gains were excluded, first-quarter net profit would have grown by 4 per cent.
The firm, whose executive chairman is Kwek Leng Beng, noted that it had adopted a revised financial reporting standard that became effective on Jan 1 this year.
The property development segment was the top contributor, which the firm said remained "relatively on a par with the corresponding period of last year, despite achieving lower revenue".
Profit from joint venture projects such as the 868-unit Bartley Ridge, the 396-unit The Inflora and the 508-unit Echelon contributed to the segment, along with higher contribution from Bartley Residences.
The rental properties segment saw much lower earnings owing to the absence of the gains from the first quarter last year.
The group's office portfolio recorded "healthy occupancy of about 95.8 per cent", compared with the national average of 90 per cent, CDL said.
The South Beach mixed development is progressing in construction, and the firm expects the 654-room South Beach Hotel to open next year.
Revenue contribution from subsidiary Millennium & Copthorne Hotels (M&C) rose when it was translated into the Singapore dollar, due to the strong pound sterling. CDL, which has a 59 per cent interest in M&C, reported a 5.9 per cent rise in revenue. However, the firm noted the pre-tax profit achieved was lower, as social and political uncertainties in parts of Asia affected trading profits.
M&C expects to complete the acquisition of the Novotel Times Square in New York next month and the Boscolo Palace Roma in Rome in the third quarter.
Earnings per share was 13.2 cents for the quarter down from 15.1 cents previously, while net asset value per share was $8.63 as at March 31, up from $8.50 as at Dec 31. CDL shares closed two cents higher at $10.08 yesterday.
rachaelb@sph.com.sg
(11-05-2014, 11:27 AM)opmi Wrote: [ -> ]Pasir ris will see the biggest supply in condos TOP.
Too many condos.
Not to mention its at the far end of the island. Amazingly people are paying more than $1000 psf for the condos there. Perhaps the attraction of P Ubin? The hdbs there are spacious mostly the 5 roomers and above. So for less money one can choose to buy a HDB with bigger floor area.
If indeed City is eyeing Leighton's property assets, then FCL's eventual successful bid for ALZ may turn out to be a bargain... Capland ???
Stockland eyes Leighton assets
STAFF REPORTER JULY 29, 2014 7:30AM
Leighton Holdings' $7 billion residential and real estate portfolio has drawn the attention of Stockland and Singapore's City Developments, The Australian Financial Review reports.
According to the newspaper, both companies have looked closely at the Leighton Properties business, for which bids are due on Thursday.
The process is being run by Bank of America-Merrill Lynch with estimates landing on a $500 million sale price.
The news comes just a day after Leighton unveiled a 20 per cent fall in first-half profit and said its strategic review into potential asset sales was progressing.
Leighton Properties' assets include Kings Square in Western Australia, 567 Collins Street in Melbourne and 177 Pacific Highway in Sydney, the AFR reports.
CDL, Stockland in $7b Leighton race
Exclusive
531 words
29 Jul 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Stockland and Singapore's largest listed developer are vying for Leighton Properties' $7 billion residential and commercial real estate portfolio.
Stockland and City Developments Ltd have each run the ruler over the entire Leighton Properties business, which is expected to sell for up to $500 million.
Bids on the portfolio are due on Thursday following a process run by Bank of America-Merrill Lynch on behalf of Leighton, which is now firmly controlled by Hochtief.
Stockland is leading the domestic charge for the assets, which include office towers such as Kings Square in Western Australia, 567 Collins Street in Melbourne and 177 Pacific Highway in Sydney, as well as residential projects like Green Square, Sydney, The Uniting Church's $450 million Wesley Upper Lonsdale Street project in Melbourne and the Boggo Road project in Brisbane.
Stockland chief executive Mark Steinert was in Brisbane last week talking up the company's planned investment and its desire to deploy capital quickly.
"We have about $3.3 billion invested in the state at the moment and we intend to invest at least another $3 billion over the next 5 to 6 years and the quicker we can get that on the ground the better," he told a Property Council of Australia function.
City Developments, which could not be contacted for comment, is controlled by multi billionaire Kwek Leng Beng.
According to Forbes Mr Kwek and his family are worth $US7.8 billion ($8.3 billion)and are in the middle of an overseas expansion phase.
His London-listed Millennium & Copthorne Hotels spent close to $385 million to acquire the Chelsea Harbour Hotel in London and the Novotel in New York's Times Square.
City Developments built the world's largest vertical garden,in Singapore. The company has also developed more than 34,000 homes and is one of Singapore's largest landlords with more than 700,000 square metres of office, industrial, retail and hotel space globally.
A move by Mr Kwek would again place Stockland in a position where it takes on a Singapore-based real estate giant as it has had to do with Frasers Centrepoint after making a $2.5 billion bid for Australand Property Group earlier this year.
Reporting financial results on Monday, Leighton's commercial and residential division – which includes both Leighton Properties and its shareholding in Devine – saw revenue for the first six months of this year at $511 million.
That was well up on the $282 million reported in the previous corresponding period.
The business's revenue equates to 4 per cent of Leighton Holdings group revenue and delivered a $9 million profit.
In a separate process being run by Goldman Sachs, Leighton Holdings' 50.6 per cent stake in listed developer Devine is due to be sold as part of a full sale of the company originally founded by local developer and now Metro Property Group chairman David Devine.
Several Japanese housing companies such as Sekisui House have ruled out their interest.
Shares in Leighton Holdings closed down 2.4 per cent to $22.10 on Monday following a 20 per cent fall in first-half profit.
Fairfax Media Management Pty Limited
Document AFNR000020140728ea7t00026
SINGAPORE: City Developments (CDL), Singapore’s second-largest property developer, said on Thursday (Aug 14) its second-quarter net profit fell 32.8 per cent from a year ago, mainly due to divestment gains in 2013.
Net profit for the three months ended Jun 30 was S$137.9 million, down from a restated S$205.1 million during the same period last year.
Property development was the main contributor to earnings, despite the “challenging Singapore market which was affected by several rounds of Government property cooling measures”, CDL said.
Hotel operations, primarily from Millennium & Copthorne Hotels, were the next highest contributor. Earnings were affected by factors including geopolitical events, higher hotel operating costs, an ongoing refurbishment programme and higher depreciation of the refurbished hotel assets, CDL said.
The Singapore property market is experiencing “challenging headwinds”, said CDL’s Executive Chairman Kwek Leng Beng. “We will accelerate our overseas expansion initiatives to supplement existing operations. CDL is looking actively in Japan and Australia and we hope to establish our platforms in these markets by the end of the year. We are also actively seeking to develop funds management products.”
CDL has declared an interim dividend of 4 cents per share.
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