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Thursday, July 25, 2024

Thai property firm puts up two hotels in HCMC for sale

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HCMC – Thailand’s Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) plans to sell the poorly performing IBIS Saigon South Hotel and Capri by Frasers Hotel, both located in District 7, HCMC, to the UK-based LT Rubicon at some US$40 million.

The three-star IBIS Saigon South Hotel covers an area of 936 square meters and has 140 rooms with wooden floors, a restaurant and three meeting rooms. The hotel has been operational for 25 years and is priced at US$15.4 million.

Meanwhile, the four-star Capri by Frasers Hotel covers an area of 1,709 square meters with 175 rooms and serviced apartments and is valued at US$23.7 million.

The Thai firm also wants to sell the five-star Pullman Jakarta Central Park Hotel priced at US$94.3 million in Indonesia to LT Rubicon.

The total value of the three hotels amounts to US$133 million, exceeding 30% of SHREIT’s total asset value. Therefore, the company will organize an extraordinary shareholders meeting on November 2 to finalize the plan and ask the Board of Directors to negotiate with LT Rubicon.

Early this year, SHREIT received a written offer to buy 100% of the two subsidiaries that own and operate these three hotels comprising Strategic Hospitality Holding Limited and Strategic Hospitality Holding Limited 2 from LT Rubicon. The UK-based company offered a bid price of US$118 million but only 72.8% of SHREIT’s shareholders agreed, all but 2.2% for the deal to be realized. LT Rubicon then adjusted the bid price down to US$105 million.

Deepong Sahachartsiri, chief financial officer of SHREIT, said at the first extraordinary general meeting of shareholders in 2020 that the Covid-19 pandemic has negatively affected the company’s revenue, financial situation and business performance.

SHREIT’s hotels are operating at a loss. Compared to other hotels in the same segment, the three properties under the selling plan had very low occupancy rates in the first quarter of this year, seriously affecting the company’s financial situation. Selling these hotels is considered a solution for SHREIT to address financial difficulties.

In the first half of this year, SHREIT achieved more than US$1.9 million in total revenue but suffered a net loss of US$2.2 million. In the same period last year, the company achieved US$6.4 million in revenue and US$2.6 million in net profit.

By Viet Dung

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