The iconic Raffles Hotel is being sold.
Fairmont Raffles Hotel International (FRHI) announced yesterday that an in-principle agreement has been inked which will sell the hotel to a consortium led by former Credit Suisse investment banker Mark Pawley.
FRHI added: 'Completion is expected to take place at the end of May 2008.'The hotel will continue to be managed by Raffles Resorts and Hotels, owned by FRHI, under a long-term management contract.
The transaction price as well as details on the members of the consortium were not disclosed.
The head of the consortium, Mr. Pawley, was involved with the $1.7 billion sale of the entire Raffles Holdings' hotel portfolio, including Raffles Hotel in Singapore, to US-based private equity firm Colony Capital in 2005 while he was head of Asian Real Estate, Gaming and Lodging business at Credit Suisse Investment Banking in Asia.
The Raffles hotel portfolio was later merged with Fairmont Hotels & Resorts to create FRHI.
Saudi Prince Alwaleed bin Talal's Kingdom Hotels International now holds majority of FRHI, with Colony holding the remaining 40%.
A report in The Business Times yesterday said that a preliminary agreement had been reached on the sale of Raffles Hotel and the adjoining shopping centre, with a price tag somewhere in the 'mid-$600 million range'. It was said that the buyer was most likely a family trust, linked to a European family. It was suggested yesterday that the trust might likely be a member of the consortium.
Raffles Hotel, Singapore is the latest among the assets sold by FRHI/Colony from the Raffles Hotels' portfolio.
Raffles Hotel Le Royal in Phnom Penh, Raffles Grand Hotel d'Angkor in Siem Reap and Swissotel Sydney were sold last year, while Swissotel Merchant Court in Singapore was sold in late 2006 to a fund managed by LaSalle Investment Management.
In its statement yesterday, FRHI also said: 'As part of FRHI's ongoing business strategy to build a brand-focused global hotel company, FRHI continues to pursue opportunities to monetise its hotel real estate investments.
'These asset sales are purely real estate transactions that provide an opportunity to realise the value of our very successful investments and provide us access to significant capital for future growth of our management companies.'
'Similar to FRHI's past real estate transactions, any hotels that are sold will continue to be part of the company's hotel collection and will be managed under long-term management contracts.'
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