The pandemic may have slowed tourism in Australia, however Baring Private Equity Asia believes now is the time to jump in, acquiring Sydney’s Hilton Hotel for $530m.
The price tag for the 570 room hotel equates to $930,000 per room and eclipses other recent sales including the KKR’s acquisition of the Sofitel Sydney Wentworth for $315 million in October last year which was struck at a per-room rate of $722,000.
The deal is subject to a number of conditions, which if satisfied will see BPEA take ownership of one of Sydney’s premium hotels, acquiring it from Chinese-backed Bright Ruby, which paid $442 million in 2015.
Hilton Worldwide sold the property to Bright Ruby while retaining a 50 year management agreement to continue to run the property. Bright Ruby had hoped for a $600m deal on the property which was marketed via JLL.
In Australia, Bright Ruby had also owned 231 Elizabeth Street Sydney having acquired it from Investa for $201m in 2013 and selling it to Charter Hall for $342m in 2017. Bright Ruby also sold 10 Barrack Street Sydney to AEW Capital for $138m in the same year.
The sale of the asset also follows a string of Chinese backed developers selling out of Australian real estate holdings.
BPEA is a subsidiary of global investment giant EQT Partners who paid $10.4 billion for the business as part of plans to expand its investment footprint in the Asia Pacific.
In 2018, BPEA Real Estate raised US$1 Billion for its second Asian Real Estate Fund which was unable to deploy much of its capital during the pandemic. In November last year, the BEPA Fund acquired a prime Osaka Hotel and engaged IHG Hotels & Resorts to launch its world-renowned Holiday Inn Express concept.
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