Jones Lang LaSalle arranges sale of Ibis Singapore

More than US$115mln purchase showed that investors are getting interested in economy hotels.

On behalf of LaSalle Investment Management (“LaSalle”) and Accor, Jones Lang LaSalle Hotels announced the sale of the Ibis Singapore on Bencoolen. The Ibis Singapore represents the highest single asset transaction recorded in Asia Pacific in 2010 in terms of dollars, according to Jones Lang LaSalle Hotels’ proprietary database. This transaction exceeded the recent US$115 million sale of the Sofitel Wentworth Sydney by Tourism Asset Holdings Limited in May 2010, according to a Jones Lang LaSalle report.

Jones Lang LaSalle Hotels’ (JLLH) Managing Director for Investment Sales Asia, Mike Batchelor commented, “The Ibis Bencoolen is Singapore’s first internationally branded economy hotel and when it opened in February 2009, was an immediate success and continues to be enormously popular. Following the sale of the Swissotel Merchant Court Singapore late last year which JLLH brokered, demand for quality assets in Asia and in particular Singapore remains extremely high.”

Located in the Singapore's historic Bugis cultural and civic precinct, Ibis Singapore on Bencoolen is the largest Ibis hotel outside of Europe, comprising 538 contemporary guest rooms, two retail outlets, 68 car-parks, plus two food and beverage outlets, including the renowned “Taste” restaurant. ACCOR will continue to manage the hotel under a long term agreement.

Jones Lang LaSalle Hotels’ Senior Vice President for Investment Sales, Mr. Tom Oakden added, “We are extremely pleased with the transaction given the entire marketing process was completed in under three months. The strong interest received on the asset highlights the growing focus on the economy hotel segment in Singapore and this is expected to gain momentum.”

In a recently released Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey (HISS) which highlights Asia Pacific hotel investors’ expectations, the survey noted that the value segment has also attracted investor interest.

Having been overlooked for many years, the mid-scale and budget segments are starting to capture the interest of Asia Pacific investors. Investors increasingly recognised that these assets have the capacity to deliver significant returns in a market which is under-supplied across much of the region. Interest is centred on branded, well-run product where previously this space has been dominated by smaller owner operators. With limited existing product available for acquisition, investors are increasingly looking to the mid-scale and budget segments for development opportunities.

Mr. Batchelor concluded, “As one of the few markets around the globe where the recovery is underway, hotels in Asia Pacific are again in demand. It is looking increasing like a V-shaped recovery for the investment market. The buyer and seller gap which we witnessed in 2008 and 2009 has closed and we expect the overwhelming majority of Asian owners to continue to be the most active hotel buyers in the world.”