Frasers Centrepoint Limited (“FCL”) has added the iconic Sofitel Sydney Wentworth, the city’s first international hotel and one of the most recognised five-star hotels in Australia, to its portfolio of assets, thus expanding its footprint. The Sofitel Sydney Wentworth has been bought for AUD202.7 million by Frasers Hospitality Investments Melbourne Pte Ltd, a wholly owned subsidiary of FCL.
It is FCL’s fifth hospitality asset in Australia since it started operating in Australia in 2008. “This hotel will come under our asset management division together with the other hospitality assets that we own in Sydney, Perth, Melbourne and Brisbane,” said Mr Choe Peng Sum, CEO, Frasers Hospitality.
Sofitel Sydney Wentworth enjoys occupancy above 85%, thanks to a robust Australian hospitality market as well as the hotel’s blue-ribbon location in the “core precinct” of Sydney’s central business district, and great heritage. It was also recently refurbished. “We are looking forward to working with the asset management division of Frasers Hospitality. Frasers Hospitality has, over the last 16 years, established itself as an experienced manager of hospitality assets globally,” says Mr Michael Issenberg, Chairman and CEO, Accor Asia Pacific.
It will continue to be run by Accor Asia Pacific under the Sofitel brand. “We bought this asset because it fits FCL’s investment criteria perfectly. We look for properties in the central business district of key gateway cities that are iconic and we are still bullish on Australia,” said Mr Choe.
In its Tourism and Hotel Market Outlook Q1 2014, consulting and financial advisory firm Deloitte forecasts that average room rates throughout Australia will grow at 3.4% per year over the next three years. RevPAR, or revenues per available room, are projected to grow 4.5% in the same period. Sydney’s prospects are even brighter. “Sydney’s occupancy – already the nation’s highest – is likely to push further into record territory, increasing to 88.8% by year end December 2016,” says the report.
Sofitel Sydney Wentworth is surrounded by premium-quality commercial office buildings with the highest-profile domestic and international tenants from the finance, legal and government sectors. It is also within walking distance to other Sydney landmarks such as the Opera House, Sydney Harbour Bridge, The Rocks, Hyde Park, Pitt Street Mall and Darling Harbour. “Of all our assets in Australia, this is the jewel in the crown,” said Mr Choe.
Mr Craig Collins, CEO Australasia, JLL Hotels & Hospitality Group, who managed the purchase process, said: “A five-star Sydney hotel is an excellent addition to an international portfolio for FCL.”
Frasers Hospitality started with two properties with 400 rooms in 1998. By March 2014, this had burgeoned to 92 properties with 15,500 rooms, a compound annual growth rate of 22%. Mr Choe says Frasers Hospitality is on track to double its inventory to 30,000 rooms over the next five years.