TA Enterprise Berhad, which is listed with Bursa, has agreed to purchase the Swissotel Merchant Court Singapore from LaSalle Asia Opportunity II SARL for about $260 million.
The price of acquisition totals to almost $546,200 for each room.
The site of the 476-room hotel is on a lease for almost 84 years.
Swissotel will continue to manage the hotel as a division of the Fairmont Raffles Hotels International.
The sale negotiations is said to be handled by Jones Lang LaSalle Hotels.
TA Enterprise said yesterday that the cash consideration of $260 million for the sale makes up the $250 million agreed property value and the adjusted consideration of $10 million.
The hotel has experienced 75.3 percent average occupancy rate and $214.32 average room rate during the first seven months this year.
The sales are associated with a guarantee of $19 million EBITDA (earnings before interest, taxes, depreciation and amortisation) each year for a period of four years, with $10 million of maximum payment.
The $19 million EBITDA indicates a yield of 7.3 percent on the negotiated sale price agreement.
The Swissotel Merchant Court Singapore opened in 1997 and has conference and meeting facilities, swimming pool, an Amrita Spa, and beverage and food outlets.
Among other things, TA Enterprise’s acquisition will be based on the favourable reception of its shareholders.
Tony Tiah and wife Alicia control the TA Enterprise (the name TA is derived from the first letters of their names, Tony and Alicia).
The group owns the Aava Whistler Hotel, which is located in Canada and the Radisson Plaza Hotel and Westin Hotel Melbourne in Sydney.