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Colonial sells Australian Marriotts to Starhill REIT for $415 million

Sold: the Sydney Harbour Marriott Hotel (left)

By JAMES WILKINSON

Colonial has sold its three Australian Marriott Hotels to Kuala Lumpur-based Starhill REIT for AUD$415 million.

The properties – Sydney Harbour Marriott, Melbourne Marriott and Brisbane Marriott – will continue to be operated as Marriott hotels and the Managing Director of YTL Corporation Berhad and Chief Executive Officer of Pintar Projek Sdn Bhd, Dr Francis Yeoh Sock Ping, said the acquisition was a strategic one for his company.

“The acquisition of this new portfolio of hospitality assets will, upon completion, enlarge the Trust’s portfolio to approximately RM3.00 billion from RM1.58 billion currently,” he said.

“Thereafter, more than half of Starhill REIT’s property value will be constituted by its hotel assets in Australia and Japan, making this the largest portfolio of overseas property investments of any Malaysian REIT.

“The acquisition represents a yield accretive opportunity for the Trust, generating two income streams, firstly, stable fixed lease rentals arising from its existing property portfolio and, secondly, variable income from the three Marriott hotels, increasing the potential for distribution per unit growth and variations.

“It will also allow Starhill REIT to participate in the vibrant real estate market in Australia and explore further geographical diversification of the Trust’s asset base,” he said.

The sale comes just weeks after Marriott’s second Sydney property on College Street was rebranded under the Pullman banner following Accor’s purchase of Mirvac’s hotels and resorts division.

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