SC Capital acquires Myanmar hotel – Exclusive

SC Capita Partners’ latest investment from its fourth opportunity fund – a hotel apartments property in Yangon – marks its fourth commitment to the frontier market.  

SC Capital Partners, the Singapore-based private equity real estate firm, has made another investment in Myanmar with the acquisition of a hotel property for around $46 million.

PERE understands that the acquisition reflected a net unlevered initial yield of 11 percent. The hotel with long-stay apartments is located near Yangon’s central business district.

The hotel apartments’ property has been acquired via SC Capital’s fourth and largest fund in its flagship pan-Asia opportunity series. The Real Estate Asia Capital Partners (RECAP) IV fund closed on $850 million in late 2014 and the capital raised has since been deployed in a total of 13 investments across the region. So far, around $360 million of the fund’s total corpus has been committed.

SC Capital Partners has been an active investor in the frontier market of Myanmar, having made three prior property investments via the $530 million Real Estate Capital Asia Partners (RECAP) III. The firm has in the past acquired a 250-room hotel with a 50-year government lease, and a 110-unit residential development project in Yangon.

However, its most innovative deal in the former capital city of Myanmar – a cruise liner to be converted into a hotel – has run into rough weather. In March 2014 the firm acquired a large UK cruise liner called Saga Ruby with an initial equity commitment of $35 million. The plan was for the cruise liner to be sailed to Phuket in Thailand where it would be transformed into a 360-room luxury hotel and then sailed to Yangon after completion. But,early last year the firm decided to halt its plans for the floating hotel due to rising costs associated with the mooring of the liner. The liner is currently berthed in Thailand.