Hotelier contributed this article to NextInsight
HOTEL GRAND CENTRAL yesterday (June 30) announced the sale of its 3-star Hotel Grand Chancellor in Little India for $248m to an unnamed third party.
The sale price translates into a hefty $756,000 per room.
HOTEL GRAND CENTRAL yesterday (June 30) announced the sale of its 3-star Hotel Grand Chancellor in Little India for $248m to an unnamed third party.
The sale price translates into a hefty $756,000 per room.
The 328-room leasehold hotel, which opened in 2010 in Belilios Road, was worth $201m based on a valuation done in Sept 2012.
Hotel Grand Central has stated that, on a pro-forma basis, the sale would have resulted in its NAV (as at 31 Dec 2013) rising to $922.8m -- or S$1.55 a share -- from $855.8m.
The stock price closed up 4 cents yesterday to reach $1.28, translating into a market cap of S$796 million.
The stock price closed up 4 cents yesterday to reach $1.28, translating into a market cap of S$796 million.
The hotel sale is subject to shareholders' approval at an EGM.
I think the management of Hotel Grand Central has once again demonstrated its ability to enhance shareholders' value.
I think the management of Hotel Grand Central has once again demonstrated its ability to enhance shareholders' value.
Part of the money for constructing the hotel in Little India came from its property disposal in New Zealand when property prices and the New Zealand dollar were high.
The value of the land (freehold and leasehold) on which the two new hotels are sited is $216m.
Together with $130m development cost, the cost of each of the 752 rooms of the two new hotels will be $477,000, against the $756,000 fetched by the hotel in Little India.
More importantly, the company will be flush with cash from the sale of the hotel in Little India despite the ongoing construction at Orchard Road.
Of the $130m development cost, around $100m is outstanding. As at 31 Mar 2014, the company had $152m in cash and had borrowings of $156m.
Together with $130m development cost, the cost of each of the 752 rooms of the two new hotels will be $477,000, against the $756,000 fetched by the hotel in Little India.
More importantly, the company will be flush with cash from the sale of the hotel in Little India despite the ongoing construction at Orchard Road.
Of the $130m development cost, around $100m is outstanding. As at 31 Mar 2014, the company had $152m in cash and had borrowings of $156m.
After the sale of the hotel in Little India is completed on 15 Jan 2015, Hotel Grand Central should have around $150m net cash and 3,432 rooms when the two Orchard Road hotels are completed.
In addition, it has invested in 270,000 sq ft of commercial properties in Australia and new Zealand with high rental yields.
Previous stories:
HOTEL GRAND CENTRAL: RNAV could rise to $1.84 on 2 new hotels
In addition, it has invested in 270,000 sq ft of commercial properties in Australia and new Zealand with high rental yields.
Previous stories:
@ AGM of Bonvests and Hotel Grand Central: Discovering opposites
HOTEL GRAND CENTRAL: RNAV could rise to $1.84 on 2 new hotels