Chip Eng Seng units grant real estate funds group options to purchase Australian hotel

TWO units of Chip Eng Seng Corp have granted entities of an Australian real estate fund management group options to purchase (OTPs) its hotel property and business in Western Australia for A$18 million (S$16.5 million).

Chip Eng Seng had purchased the assets in 2017 for A$15 million. It granted the OTPs to Acure Funds Management and MF Hospitality Management, both part of the Acure Asset Management real estate funds management group, which is headquartered in Perth.

The assets being disposed of are a strata hotel property and strata restaurant property located at 1 Marco Polo Drive in Mandurah, and the hotel business known as The Sebel Mandurah.

The properties are situated on a freehold site and have a total land area of approximately 6,712 square metres. The site houses a mixed-use strata development comprising a seven-storey strata-titled building, a waterfront restaurant and high-end residential apartments.

The deal “presents an opportunity for the group to unlock the underlying value and capitalise its investment in the sale assets without incurring significant additional capital investment”, Chip Eng Seng said in a Thursday (Dec 15) filing.

“The proposed disposal will allow the group to recycle the capital arising from the net proceeds of the sale for its working capital purposes and/or to pursue opportunities which have better upside potential,” it added.

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The option is valid up till Feb 10, 2023, unless extended to Feb 17. The option fee is A$300,000.

Shares of Chip Eng Seng closed at S$0.755 on Thursday, up 0.7 per cent or S$0.005.