Accor deal doesn't change ownership of Raffles Hotel

CapitaLand clarifies that Fairmont S'pore, Swissotel The Stamford are not part of sale

The Raffles Hotel.
The Raffles Hotel. PHOTO: ST FILE

A multibillion-dollar deal by Paris-based AccorHotels to buy out FRHI Holdings (FRHI) will make the firm the largest hotel operator in Singapore with over 4,200 rooms.

AccorHotels told The Straits Times yesterday that under the agreement, it has a "long-term management contract" for Raffles Hotel and "long-term leases" for the Fairmont and Swissotel brands here.

FRHI operates 115 hotels and resorts under the Raffles, Fairmont and Swissotel brands in 34 countries, with another 40 properties still under development.

But the deal does not change the ownership of the three properties here: Raffles Hotel in Beach Road, the nearby Swissotel The Stamford and Fairmont Singapore. Katara Hospitality is the owner of Raffles Hotel. 

In an announcement to the Singapore Exchange yesterday, developer CapitaLand clarified that the two hotel buildings - Fairmont Singapore and Swissotel The Stamford - are not part of the sale to AccorHotels.

The 73-storey Swissotel The Stamford and the 28-storey twin-tower Fairmont Singapore are part of the integrated development Raffles City Singapore.

CapitaLand said the entire Raffles City Singapore, which includes a shopping mall, an office tower, the two hotels and a convention centre, is jointly owned by CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT).

The developer added that the two hotels and convention centre are on a long-term lease to RC Hotels, in which FRHI and CapitaLand have a stake.

The sale of FRHI to AccorHotels will "not change the current ownership structure as the operations of the hotels will continue to be managed by RC Hotels, while the hotel buildings remain jointly owned by CCT and CMT", CapitaLand added.

The buyout of FRHI Holdings by AccorHotels is the second major hotel acquisition deal in as many months, with more expected as the industry consolidates.

Marriott International agreed to buy Starwood Hotels & Resorts Worldwide for US$12 billion

(S$17 billion) last month, underlining a strategy to seek market share through acquisitions.

With 42 properties in North America, FRHI would also give the Paris-based hotel operator a presence in the United States.

FRHI is jointly owned by the Qatar Investment Authority (QIA), Kingdom Holding Company of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System company.

Under the buyout agreement, QIA and Kingdom Holding Company of Saudi Arabia will receive US$840 million in cash and 46.7 million in new Accor shares. QIA will own 10.5 per cent of Accor, and Saudi Prince al-Waleed bin Talal's Kingdom Holding will own 5.8 per cent, according to Accor.

A version of this article appeared in the print edition of The Straits Times on December 12, 2015, with the headline 'Accor deal doesn't change ownership of Raffles Hotel'. Subscribe