The Ibis Singapore on Bencoolen, a WIT partner hotel in 2009 and 2010, was sold in a transaction that exceeded the recent US$115 million sale of the Sofitel Wentworth Sydney by Tourism Asset Holdings Limited in May 2010, according to Jones Lang LaSalle Hotels’ proprietary database.

The price or purchaser was not disclosed in the statement by Jones Lang LaSalle Hotels but media reports say it is a Singapore private investor and the price tag being bandied about is over S$200 million.

The hotel, owned 70% by Jones Lang LaSalle Investment Management and the rest by Accor, was put up for sale in a private tender and it is understood the whole process took just three months.

The Ibis Bencoolen was Singapore’s first internationally branded economy hotel and, from the outset, looked set to be a success in a market that has a shortage of rooms in this category. It was particularly innovative in its online marketing and distribution, with an opening “pay-what-you-want” promotion that became the talk of town. 

Jones Lang LaSalle Hotels’ (JLLH) Managing Director for Investment Sales Asia, Mike Batchelor, said the hotel was an immediate success and “continues to be popular”.

“Following the sale of the Swissotel Merchant Court Singapore late last year which JLLH brokered, demand for quality assets in Asia and in particular Singapore remains extremely high.”

At the May hotel investment forum organized by HICAP and Jones Lang LaSalle in Singapore, Batchelor had tipped that buyers were back with Asian buyers contributing up to 73% of investment flows and the main investors were Asian families and companies which accounted for 25% of the investments in 2009.

Located in the Singapore’s historic Bugis cultural and civic precinct, Ibis Singapore on Bencoolen is the largest Ibis hotel outside of Europe, with 538 rooms, two retail outlets, 68 car-parks, plus two food and beverage outlets. Accor will continue to manage the hotel under a long term agreement.

Jones Lang LaSalle Hotels’ senior vice president for investment sales, Tom Oakden, said that the strong interest received on the asset highlighted the growing focus on the economy hotel segment in Singapore and this was expected to gain momentum.”

In a recently-released Jones Lang LaSalle Hotels’ Hotel Investor Sentiment Survey (HISS) which highlights Asia Pacific hotel investors’ expectations, the survey noted that the value segment has also attracted investor interest.

Having been overlooked for many years, the mid-scale and budget segments are starting to capture the interest of Asia Pacific investors.

Investors increasingly recognised that these assets have the capacity to deliver significant returns in a market which is under-supplied across much of the region. Interest is centred on branded, well-run product where previously this space has been dominated by smaller owner operators.

With limited existing product available for acquisition, investors are increasingly looking to the mid-scale and budget segments for development opportunities.

Batchelor said, “As one of the few markets around the globe where the recovery is underway, hotels in Asia Pacific are again in demand. It is looking increasing like a V-shaped recovery for the investment market. The buyer and seller gap which we witnessed in 2008 and 2009 has closed and we expect the overwhelming majority of Asian owners to continue to be the most active hotel buyers in the world.”

Featured image credit (Wooden treasure chest loaded with golden coins): Ockra/iStock