Adia sells off a slew of hotels in Australia
The Abu Dhabi Investment Authority (Adia), the world’s third-largest sovereign wealth fund, has sold 15 hotels in Australia to the French hotel owner and operator AccorHotels for AUD$200 million, the French hotel operator said yesterday.
A wholly owned subsidiary of Adia involved in the transaction offloaded the Ibis and Ibis Budget branded properties, which have 1,595 rooms, AccorHotels said. These were part of a portfolio of 31 properties accounting for 4,097 rooms that Adia acquired from Sydney-based Tourism Asset Holdings in 2013. At that time, the cost of the transaction was not disclosed by either side, but the portfolio was understood to be valued at about A$800m. The deal made Adia the largest hotel owner in Australia.
The hotels are operated by various Accor brands such as Pullman, Novotel, Mercure, Ibis, Ibis Styles and Ibis Budget brands.
Adia will still own the remaining 16 properties in the portfolio, including the 525-room Novotel Sydney Darling Harbour and 177-room Novotel and 212-room Pullman Sydney Olympic Park. As part of the deal, AccorHotels will convert the leases of these 16 properties into 50-year management agreements and extend the management term of one hotel to 50 years.
Most of the hotels are located on the eastern side of the country, including in Sydney, Melbourne and Canberra.
In the Asia-Pacific region, Australia and Japan are expected to remain a safe haven for hotel investors, according to a third-quarter report from the consultancy CBRE.
The average daily rate at hotels in Australia increased 1.6 per cent to reach A$185 (Dh490) for the year ending September 2016 compared to the same period the previous year, and countrywide occupancy jumped to 75.7 per cent, a growth of 1.1 per cent, according to the latest CBRE data.
The number of visitors to Australia has also increased by 11.5 per cent to 8.1 million for the year ending October compared to the previous year, according to the Australian tourism agency.
Adia remains a large investor in Australia, with interests in electricity, ports and other sectors.
In 2013, a consortium that included Tawreed Investments, another unit of Adia, leased Port Botany in south Sydney and Port Kembla in New South Wales for 99 years in an A$5.07bn deal.
Last year, a consortium including Adia agreed to invest A$10.3bn in one of Australia’s biggest utilities, the TransGrid electricity network in New South Wales.
Adia is continuing to snap up assets as it seeks to maintain returns on investments. In October, it bought a stake in SGN, a UK gas distribution company, as part of its strategy to invest some of its vast assets in infrastructure with steady earnings.
This year Adia has been increasing its focus in China, opening an office in Hong Kong in October after it closed its London office last year. It bought a 50 per cent stake in three Hong Kong luxury hotels – Grand Hyatt Hong Kong, Renaissance Harbour View and the Hyatt Regency Hong Kong – as part of a HK$18.5bn (Dh8.75bn) deal last year.
Adia remains focused on China’s and India’s long-term growth prospects, even after emerging markets were hit last year by a slowing global economy, it said in its annual review released in July.
Long-term returns declined last year amid volatility in markets, although it said the lower rates were mainly caused by statistical averaging over the long periods it uses to measure returns.
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