LaSalle seals A$203m exit for Fund III

In its second exit in Asia this year, the Chicago-based real estate investment firm has sold the Sofitel Wentworth hotel in Sydney to a Singapore-based developer.

LaSalle Investment Management has sold the five-star Sofitel Wentworth hotel in Sydney to Singapore-based developer Frasers Centrepoint for a reported A$203 million (€140 million; $190 million).

The exit comes out of LaSalle’s 2007 vintage LaSalle Asia Opportunity Fund, which bought the Sofitel Wentworth for A$130 million in 2010. The  sale is the second exit the firm has announced this year for the $3 billion opportunistic fund, following a smaller divestment of a warehouse park in Chengdu to Chinese insurer Ping An.

Frasers Centrepoint is backed by Thai billionaire Charoen Sirivadhanabhakdi and, just this month, the company also entered the running for Australian property company Australand Property Group with a A$2.59 billion bid. According to media reports, Frasers also is plotting a S$365 million (€215 million; $292 million) hospitality REIT for its assets, which could include the Sofitel Wentworth. 

LaSalle originally was reported to have put the 481-room hotel on the market at the end of 2013. “The divestment of Sofitel Wentworth comes at a time when hotels in Sydney boast some of the most attractive market fundamentals in the region, thanks to increasing inbound tourism and ongoing corporate demand,” said Marc Montanus, fund manager and international director at LaSalle, in a statement.

In the past year, the Australian market has seen some sizable hotel deals close. Sydney's Four Seasons Hotel was acquired by Korean investment giant Mirae Asset Global Investments for A$340 million in August, and  the Abu Dhabi Investment Authority made a record-breaking A$800 million purchase of Tourism Assets Holdings in September, giving the investor ownership of a portfolio of about 30 properties.

“LaSalle saw an opportunity to acquire an iconic CBD asset at an attractive income yield and was able to substantially improve its performance through a range of revenue initiatives, expense management and selective upgrades and refurbishment of the hotel,” Montanus added. “This active approach, coupled with the strong recovery we’re experiencing in the capital markets, has enabled our fund to exceed its investment objective.”

With approximately $4.8 billion in assets under management and seven offices in the Asia-Pacific region, LaSalle also operates an unlisted core-plus fund and a single-asset vehicle in Australia.