For $180 Million, Gaw Capital Sells the Hotel G to Capital’s Ascott in Singapore

Hotel G
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In compliance with corporate records submitted to local authorities, Gaw Capital Partners has concluded the sale of the Hotel G in Singapore to a company under the ownership of CapitaLand Group.

Beh Siew Kim, Hoe Kit Mak, Patricia Goh, and Edward Bin, all senior executives with Capitaland Group’s investment or lodging units, are listed as directors of a special purpose vehicle that houses the 308-key budget hostelry. According to sources familiar with the transaction, the Temasek-backed giant paid just under S$240 million ($180 million) for the property close to the Bugis area.

After Mingtiandi revealed that CapitaLand’s Ascott lodging business was conducting exclusive due diligence to purchase the 94,560 square foot (8,785 square meter) hospitality asset from a fund managed by the Hong Kong-based private equity firm, the deal finalized in less than two months.

In an interview with Mingtiandi last year, Capital and Investment, the listed fund management division of the largest real estate company in Southeast Asia, stated that it hopes to nearly double its current production from the lodging category by 2028, to S$500 million in fee income. Acquisitions are one of the main strategies the company plans to use to achieve this goal.

In 2015, Gaw Capital Partners made its first acquisition in Singapore’s hospitality industry when it paid S$203 million (about $144 million) for the Big Hotel, which was located at the intersection of Middle Road and Bencoolen Road.

The asset was first put up for sale over a year ago by the Goodwin Gaw-led group, with an asking price of S$320 million. With rising interest rates helping to pull sales of income yielding property assets in Singapore down by 29 percent in the first nine months of the year, according to MSCI, Gaw Capital hit 75 percent of that target price.

Industry observers surmised that the company might have been driven to sell the asset in order to reimburse investors for their money, given that the 16-story hotel investment has been in place for more than eight years.

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