Tuan Sing to buy over Aussie hotel associate

TUAN Sing Holdings on Wednesday said that it would buy the 50 per cent stake in Australia's Grand Hotel Group (GHG) belonging to joint venture partner Morgan Stanley, for A$126.04 million (S$147.38 million) .

If the deal goes through, Tuan Sing, which already owns half of GHG, will have full control over the Australian group, which owns two five-star hotels in Australia - Grand Hyatt Melbourne and Hyatt Regency Perth.

The transaction is expected to be completed before the end of the year, after all necessary approvals and consents from the relevant regulatory authorities and consortium banks have been obtained.

A wholly owned subsidiary, Tuan Sing Real Estate Pty Ltd, and a private trust, Tuan Sing Real Estate Trust, have been established in Australia and Singapore, respectively.

Net property income for Grand Hyatt Melbourne came to A$24.1 million, while it was A$19 million for Hyatt Regency Perth.

For the seven months ended July 2014, GHG's net property income rose 2 per cent to A$23.7 million.

The combined revenue per available room (RevPar) of the two hotels edged up one per cent year on year, which led to a rise in GHG's net profit to A$6.3 million.

At the end of July 2014, the unaudited net asset value of GHG was A$276.6 million.

William Liem, chief executive officer of Tuan Sing, said that following the acquisition, the Australian portfolio would be about 35 per cent of the group's total property value. "Through a combination of strategic plans we have in place, we intend to make GHG more efficient and therefore more profitable over time.

"We have spent more than A$70 million to renovate, upgrade and increase usable space at the two hotels over the past few years, and we are confident of reaping the benefits from these asset enhancements going forward."

Tuan Sing shares closed up half a cent at 40.5 Singapore cents.