Park Hotel Clarke Quay poised for sale

Price tag is at S$300m.

According to DBS, the media reported that the 336-room Park Hotel Clarke Quay is "poised for imminent sale” at about S$300m.

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The buyer is reportedly a REIT, and Ascendas Hospitality Trust is a prime candidate. Park Hotel Clarke Quay is new upscale hotel that was completed in 2009.

The hotel is strategically located near the Central Business District and is close to several tourist attractions like Chinatown, Arab Street, and the National Museum, and is within walking distance to Clarke Quay MRT Station and lively drinking hole, Clarke Quay.

The hotel has received good reviews by travelers at online travel website Tripadvisor.com. There are other hotels in the vicinity which means there will be competition for guests.There are no further details or related announcements by any REITs.  

The reported S$300m price tag implies S$900k/key, which seems high but is within expectations given the tight holdings of hotel assets in Singapore and
the lack of available hotel assets in good locations in Singapore.

Previous transactions in the vicinity included Hotel Grand Pacific, an older hotel that was sold at S$850k-S$900k/key).

Given the positive outlook for Singapore’s tourism sector in the medium term - Singapore Tourism Board is targeting to increase visitor arrivals to 17m
in 2015 -, Singapore remains one of the most desired hotel investment markets in the region. 

Assuming S$260/night RevPAR reported by Upscale hotels (Singapore Tourism Board) and 50% EBITDA margin, the price tag implies EBITDA yields of
5.25%- 5.5%.