Hotel Grand unit sells Australia property for A$10.9m amid 'challenging' outlook

HOTEL Grand Central (HGC), through its wholly-owned unit, has sold Hotel Grand Chancellor in Australia for A$10.9 million (S$10.6 million) in cash to a third party, taking into account the challenging current and future hotel market outlook in the Palm Cove locality.

The property was last valued at A$9.30 million by Colliers International last Dec 31, based on the income method.

The sale transaction allows the group to realise its investment in this property which "had not been performing well and had a challenging outlook", it said in a regulatory filing on Thursday.

The property contributed a net loss of A$814,000 to HGC's audited net profits for the year ended Dec 31, 2020.

Upon conclusion of this sale and after deducting the sales commission of A$326,666, the group would make a net loss of A$93,645 over its book value as at Dec 31, 2020, which would be recorded in its income statement.

Further, the group would be transferring A$325,000 from its asset revaluation reserve to its retained earnings.

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The net sale proceeds will be placed into interest-bearing bank term deposits to top up the group's cash pool, pending future investment opportunities.

Hotel Grand said it is working with an architect to explore the development of an empty piece of land in Christchurch, which was purchased in 2019. The intention is to build a mixed development comprising hotel, carpark and retail/office space.

Shares of Hotel Grand closed up S$0.01 or 1 per cent to S$1.03 on Thursday.