Stamford Land confirms sale of Sydney hotel for A$210.5m
Wong Pei Ting
STAMFORD Land Corporation on Friday (Sep 23) confirmed the sale of its upscale hotel in Sydney’s central business district to JDH Capital, a private principal investment company, for A$210.5 million (about S$197.3 million).
The mainboard-listed company said it has entered into a valid binding agreement for the sale and purchase of Sir Stamford at Circular Quay, its 10-storey freehold property located at 93-97 Macquarie Street.
The update came a month after the company announced the grant of a put option by JDH Capital and its entry into an option agreement with the purchaser.
Sir Stamford at Circular Quay, which was built in 1990, is a hotel with 105 bedrooms that overlooks Sydney Harbour and Sydney Harbour Bridge.
Before the sale announcement, Stamford Land had said in December last year and January this year that it would commit about S$68-73 million to redevelop the property.
The redevelopment, which is expected to cost more than A$380 million spread over the course of 3 years starting October 2023, came after it received an approval from the Sydney Council to convert the property into residential units.
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In August, Stamford Land said the proposed disposal will benefit the group as the net cash it stands to receive from the sale, compared to the net cash receivable from the redevelopment of the property as a residential complex, is more than 76 per cent.
The sale price is A$120.5 million higher than the latest valuation of the property as at Mar 31 as well, it noted.
The group also stated that the net profit receivable from the proposed disposal is more than 20 per cent higher than the net profit receivable in the event of redevelopment.
Besides, the company will be able to avoid any redevelopment risk for the 4 years that the development is expected to take, it said, pointing out that such a risk has substantially increased since last year with escalating labour and material cost.
Net proceeds from the sale will be used for future acquisitions and investments, and the paying down of loans to mitigate the impact of rising interest rates, it said.
Stamford Land closed up 2.7 per cent at S$0.385 on Friday.
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