SINGAPORE: City Developments Limited (CDL) said on Monday (Dec 14) its hotel arm has agreed to sell a Penang hotel for about RM75 million (S$25 million), as part of moves to streamline its portfolio amid the COVID-19 pandemic.
This will be the third non-core hotel asset that Millennium & Copthorne Hotels (M&C) has agreed to sell since the start of the year. The three assets have a combined sales value of more than S$100 million.
M&C is selling the 318-room Copthorne Orchid Hotel & Resort Penang in Malaysia to Bursa-listed Ivory Properties Group Berhad, said CDL in a press release. The sale includes the freehold land that the hotel resides on, the hotel, as well as all fixtures, fittings, equipment and tangible personal property, in respect of the hotel.
M&C operates 66 hotels under the Millennium Hotels and Resorts global brands, with another 79 under franchise and management contracts.
CDL said that M&C has been restructuring costs and redirecting marketing resources towards domestic tourism since the COVID-19 outbreak. M&C has also selectively divested non-core hotel assets while maintaining a core room inventory with presence in key gateway cities, it added.
"These efforts have already resulted in green shoots of recovery of the hospitality business from the pandemic in recent months," said CDL.
In April, M&C exercised a put option to sell Copthorne Hotel Birmingham in the United Kingdom for £17.2 million (S$30.8 million).
In February, M&C completed the sale of Millennium Cincinnati in the United States for US$36 million.
"As return on equity of such assets (from hospitality revenue and profits) is not likely to recover to pre-COVID-19 levels in the near-term, M&C is continually reviewing and fine-tuning its portfolio," said CDL.
M&C is currently evaluating other unsolicited offers for its non-core assets, and expects to complete one to two more disposals between now and the end of 2022, added CDL.