Interest High in Mirvac Sale

A list of about 20 groups, including LaSalle Investment Management and private equity giant Blackstone, are conducting due diligence on the Mirvac Group’s $450 million hotel empire, with bids to close next week, according to The Australian.

Among the parties to have obtained documents about the portfolio and entered into a confidentiality agreement with the listed property trust are French-based hotel chain Accor, US-based Marriott Hotels and Resorts, Singapore’s Grand Chancellor owner Hotel Grand Central, US-based Wyndham Hotels and Resorts and the Thai-based owner of Oaks Hotels and Resorts, Minor International.

The Australian revealed Blackstone’s interest in the portfolio last week, with LaSalle Investments the latest potential buyer. Toga Group (Medina Apartment Hotels and Travelodge operator), Amalgamated Holdings (Rydges Hotels and Resorts) and Mantra have also expressed interest.

Mirvac’s managing director Nick Collishaw said the company’s preferred outcome from the process was a straight cash sale.

Mr Collishaw said an information memorandum had been issued to “see what groups are out there” and he expected the proceeds of the sale would be more than $350 million, the value of the assets in the Mirvac balance sheet, because of the strong level of interest.

Included in the sale are management rights for almost 6000 hotel rooms in 41 Australian hotels and three in New Zealand, a business estimated to be worth between $100 million and $150 million.

Mirvac’s hotel package includes its 49% stake in the Mirvac Wholesale Hotel Trust, which owns seven four- to five-star properties in Sydney, Brisbane and Melbourne. The group would also offload the Sebel hotels in Newcastle in NSW and Mandurah in Western Australia, which are held on its balance sheet. But it would retain The Como Hotel in Melbourne as a redevelopment site, according to The Australian.

Also in the offering is the 49% stake in Mirvac’s Tucker Box Hotel Group, made up of 13 Travelodge hotels.

The Australian revealed in June that Mirvac Group had appointed Lazard to review its hotel arm.

Revenue per room for Mirvac’s hotel business increased 8.3% for the 12 months to June 30, with earnings before interest and tax at $11.5 million.

Mirvac is being advised by Moelis & Co and Investec and they are thought to be considering management deals to ensure Mirvac retains an interest in the 46 assets, which include Sea Temple, Quay West Suites, Sebel and Citigate.

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