Landmark Thailand Hotel Comes to Market

SINGAPORE-The Crown Hotel at Orchard, a 311-room luxury hotel here that last year flew the Prince Hotels flag is on the market. The owner, Forward Investment Pte Ltd, says it will sell the hotel via competitive tender–as long as the high bid is above US$196.4 million (SG$325 million). The deadline for offers is June 3.The hotel is located on one of the busiest intersections of Orchard Road, a shopping, entertainment and tourist precinct. The hotel includes four food and beverage outlets, function facilities, car parking and over 45,000 sf (4,000 sm) of retail space, including the two-level SingTel “Hello” retail shop fronting Orchard Road. The hotel was a Prince Hotels franchise under until the agreement expired in December 2004.The property was first offered for sale last August by a receiver and manager and received interest from major real estate and hotel investor groups, though offers were in the $150-million range. Ultimately, however, funds managed by Noonday Asset Management LLP and Farallon Capital Management LLC took over Forward Investment’s debt and the hotel was withdrawn from the market. According to Jones Lang LaSalle, which has the disposition assignment, the property is now being offered for sale with the “full support” of Forward Investment Pte Ltd, which includes the Sulistyo family of Indonesia. The family also controls the hotel’s management company, Crown Management International.The amount of leverage on the property was not immediately available, but JLL Hotels EVP Craig Collins says Noonday and Farallon are the only mortgage holders and Forward Investment “is committed to a sale being conducted” at or above US$196.41 million (SG$325 million). Forward Investment last year owed $250 million on the property to multiple lenders. In 2004, the hotel’s average occupancy was 88.25%, the average rental rate was US$70.67 and RevPAR was US$64.69. Year-to-date in 2005, the the hotel’s average occupancy is 87.20%, the average rental rate is US$77.43 and RevPAR was US$67.51.JLL Hotels EVP Craig Collins says the property offers “huge” upside to an incoming investor. First, Collins says the retail could be expanded. Second, he says the hotel could be upgraded and repositioned as a branded product operated by an international chain, “which should enable it to achieve a better trading profile.”JLL Hotels managing director Scott Hetherington calls the opportunity to own a substantial freehold property on Orchard Road “rare.” “Assets of this quality in Singapore are generally very tightly held,” he says. “As such, we expect to receive strong interest from local, regional and international investors.”