City Developments Limited (CDL), one of the largest real estate companies in Singapore, has agreed to acquire Sofitel Brisbane Central hotel, the biggest hotel in Brisbane, Australia, from Canada’s Brookfield Asset Management.
In a statement, CDL said a joint venture equally owned by its Millennium & Copthorne Hotels and M&C New Zealand hospitality subsidiaries will pay A$177.7 million (about $119 million) to acquire the 30-storey landmark 5-star hotel.
Located in Brisbane’s Central Business District, the hotel has 416 rooms, nine meeting and conference rooms that can accommodate up to 1,100 people, and is directly linked to the Central Station.
Brookfield, the alternative asset management company headquartered in Toronto, Canada, acquired the hotel in 2012 as part of its A$410-million takeover of listed hotel owner Thakral Holdings.
The asset manager put the hotel up for sale in October. It had hoped to sell the hotel for as much as A$220 million back in 2013 as part of a five-asset offering, according to an AFR report.
CDL, which is chaired by billionaire Kwek Leng Beng and 49% owned by the Hong Leong Group, said it is paying about A$427,000 per key for the Sofitel Brisbane Central hotel.
The proposed acquisition marks CDL’s entry into Brisbane’s hospitality sector although it has been actively developing projects in the city and in the country.
In 2018, it completed Ivy and Eve, an iconic 472-unit luxury residential project in Brisbane. The group’s REIT associate CDL Hospitality Trusts also owns two hotels in Australia – Mercure Perth and Ibis Perth.
“The acquisition presents an attractive opportunity for the Group to enlarge our presence in Australia and enhance our recurring income stream,” Kwek said.
He added that Brisbane is amongst the key hospitality markets in Australia that have enjoyed the strongest RevPAR recovery in 2022, significantly exceeding pre-pandemic levels.
Brisbane’s pipeline of over A$20 billion in infrastructure projects is also expected to further enhance the city’s position as a world-class sporting, tourism and business events destination.