Listed Singapore real estate developer TEE Land has bought the four-star boutique Diamant Hotel in Potts Point, Sydney, from Paul Fischmann’s 8Hotels group for $23.2 million.
The result is something of a windfall for Mr Fischmann. The Melbourne-based hotelier paid $18.2 million for the 76-room hotel behind the famous Kings Cross Coca-Cola sign less than two years ago. He acquired it from the unlisted Arena Property Fund in April 2013.
Mr Fischmann put the hotel up for sale in July 2014, telling The Australian Financial Review it was part of a strategy to extend the group into other markets. “Sydney is a booming market at the moment and it is a good opportunity to offload this asset,” he said.
Mr Fischmann is also selling the Pensione Hotel on Spencer Street in the Melbourne central business district. The hotel forms part of a 2000-square-metre prime development site that includes the Nomads All Nations backpacker hostel owned by private investor Peter Russell. The combined site on the corner of Spencer and Flinders streets, listed through CBRE, could fetch as much as $45 million.
TEE Land, a subsidiary of the listed Singapore engineering and real estate group TEE International, has formed a joint-venture company, Potts Point Hospitality, to buy the Diamant Hotel. Its investment partners are Singaporean company Kenmooreland and Melbourne hoteliers Jan and Peter Clark of the Lancemore Group.
Potts Point Hospitality is 55 per cent held by TEE Hospitality, 10 per cent by the Clarks and 35 per cent by Kenmooreland.
The three were also joint-venture partners on the acquisition of Quality Hotel CKS Sydney Airport, which is part of the Choice Hotels franchise and was purchased in August 2014 for $23.9 million.
It is understood ASX-listed fund manager Elanor Investors Group, which owns a number of leisure assets, had run a ruler over the Diamant Hotel.
The property’s sale was negotiated by CBRE Hotels’ Wayne Bunz and Rob Cross. “Every major hotel owner and operator wants room exposure into Sydney . . . The opportunity to acquire a hotel with vacant possession makes this hotel even more appealing,” Mr Bunz said when the hotel was listed for sale.
In a statement posted on the Singapore Stock Exchange, TEE Land said it hoped to complete the acquisition on February 27 and listed the Diamant Hotel’s key attributes as its “excellent location, prospects and redevelopment potential”.
TEE Land said the acquisition was part of the group’s strategy to “build up a portfolio of recurring-income-generating assets in developed markets such as Australia and New Zealand that provide short- to mid-term accommodation”.