The national joint venture between Malaysia and Singapore, M+S, will sell the luxury hotel component of the signature Duo mixed-use project for $475 million to Hoi Hup Realty in one of the year's biggest transactions for a standalone hotel in the region.
M+S said yesterday that it agreed to sell all the shares of its wholly owned subsidiary Ophir-Rochor Hotel, which owns Andaz Singapore, to the Singapore property developer.
The proposed sale consideration of $475 million for the 342-room Andaz works out to about $1.39 million per key.
This marks the highest total price for a standalone hotel transaction in Singapore, and the third-highest in Asia this year, according to M+S.
But the price per key is still below Westin Singapore's price tag of $1.5 million for each room when the Marina Bay hotel was sold in 2013 to Japan-based property developer Daisho Group.
The five-star Andaz Singapore, managed by Hyatt Hotels Corporation, opened its doors in late 2017 and was the first Andaz hotel in South-east Asia.
The hotel occupies the top 15 floors of the 39-storey Duo Tower and features a rooftop venue, an observation deck, an array of restaurants and bars, and premium meeting facilities.
The Andaz sale is subject to customary closing conditions. JLL is the appointed adviser for the transaction.
Hoi Hup Realty chairman Wong Swee Chun said yesterday: "We are attracted to the rarity of this high-quality luxury hotel offering, as well as its historic significance, being one of the landmark projects by M+S.
"We are especially excited by the strategic location of the hotel, with Andaz Singapore occupying a key node in the transformative Beach Roach and Ophir Road corridor."
M+S chief executive Kemmy Tan said the record price of $475 million reflects the hotel's potential for growth in tandem with the evolution of the Bugis district as an extension of the existing Central Business District.
"The proposed transaction will allow us to maximise returns to our shareholders, while handing over the reins to a very established and exciting developer in Hoi Hup to take the asset forward," she added.
Duo Tower is part of the two-tower, mixed-use Duo development in Beach Road by M+S, which is a 60-40 joint venture between Malaysian sovereign wealth fund Khazanah Nasional and Singapore investment firm Temasek.
Aside from Andaz, Duo Tower also comprises 570,000 sq ft of prime Grade A commercial space on Levels 4 to 23, and a 56,000 sq ft retail component, Duo Galleria, on Level 1 and Basement 3.
The other tower, Duo Residences, has 49 storeys and houses 660 units.
In July, M+S confirmed it was selling Duo's office and retail areas for $1.575 billion, or $2,570 per sq ft of net lettable area, to Allianz Real Estate and Hong Kong private equity firm Gaw Capital Partners.
The Duo development sits on a site with a 99-year leasehold tenure that started from July 1, 2011.
M+S will continue to own and manage Marina One in Marina Bay, which comprises 1.88 million sq ft of prime Grade A office space, 140,000 sq ft of retail space, and 1,042 luxury apartments.