HK real estate equity group to buy Big Hotel for $203m

A Hong Kong real estate private equity group is acquiring Big Hotel in Singapore for $203 million, The Straits Times has learnt.

Gaw Capital Partners is known for restoring iconic hotels such as the Hollywood Roosevelt in Los Angeles, and the Victorian-style hotel, The Strand, in Yangon.

Co-founder Kenneth Gaw is one of three directors listed at GCH, based on an Accounting and Corporate Regulatory Authority search. GCH is an investment holding company acquiring the 16-storey, 308-room hotel at 200 Middle Road. The other two directors are Mr Alan Lee Kam Hung and Mr Lee Wei Hsiung.


Gaw Capital Partners, which is set to buy the 16-storey Big Hotel (photo), is known for restoring iconic hotels such as the Hollywood Roosevelt in Los Angeles, and the Victorian-style hotel, The Strand, in Yangon, Myanmar. PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

CHANCE TO ADD VALUE

In particular, there are opportunities to take hotels that are underperforming and add value by repositioning them with some capital expenditure and good marketing.

MR ROBERT MCINTOSH, executive director, CBRE Hotels Asia-Pacific

A Land Register search shows GCH had lodged a purchaser's caveat on Sept 18 on the Big Hotel at a price of $203 million.

When contacted, Gaw Capital said it was "a bit too early for us to talk about this project, especially now (as) the transaction has not been closed yet".

Mr Robert McIntosh, executive director, CBRE Hotels Asia-Pacific, told The Straits Times that hotels in Singapore, in the medium term, can still offer a good buying opportunity.

"In particular, there are opportunities to take hotels that are underperforming and add value by repositioning them with some capital expenditure and good marketing," he noted.

According to the 2015 CBRE Asia-Pacific Investor Intentions survey, the outlook for hotel investment in the region remains positive with hotels seeing stronger interest.

"However, investment appetite is shifting towards prime core assets in view of the uncertain global economic recovery," according to CBRE's first-half report for this year on Asia-Pacific hotels. "Investors will focus on large and mature markets (including)... Singapore."

But CBRE cautioned that while the fall in visitor numbers has slowed and arrivals to Singapore are starting to recover, the country still faces headwinds as the Singdollar continues to appreciate and there is a steady supply of hotels in the pipeline.

Gaw Capital has developed "a strong loyalty from its investors by consistently achieving returns in excess of 20 per cent," Mr Marcus Neill, director of business development for Asia capital markets at CBRE in Hong Kong, told Bloomberg in an earlier report.

"They can articulate a proposition to foreign investors, and know how to operate locally, and are exceptionally good at timing the market," Mr Neill said.

Since its inception in 2005, Gaw Capital has raised equity of US$5.22 billion (S$7.3 billion) and has assets of US$10.61 billion under management as of the second quarter of this year.

In recent months, Gaw Capital unveiled a slew of projects, including the purchase of the 76-storey Columbia Centre, Seattle's tallest tower, for about US$700 million.

A group led by Gaw Capital recently acquired the InterContinental Hotels Group's Hong Kong flagship for US$938 million, a deal expected to close in the second half of this year.

A version of this article appeared in the print edition of The Straits Times on October 22, 2015, with the headline 'HK real estate equity group to buy Big Hotel for $203m'. Print Edition | Subscribe