Global Hospitality Report (August 22, 2016)

Cost Segregation Studies for Hospitality Assets 
By Tim Sauer

HVS prides itself on being a trusted advisor for hotels owners and investors, and we are constantly looking for opportunities to maximize our clients’ cash flows and returns. The following article highlights the basics of cost segregation studies and their potential benefits for our clients. While HVS does not offer this service, we have consulted with cost segregation professionals to maximize its potential benefits in a hospitality context.

HVS Market Pulse: Island of Oahu, Hawaii 
By John Berean

Tourism to Hawaii’s most populous island is booming, with Asian-Pacific countries sourcing a major boost in visitation. Given a number of planned projects across Oahu, hotel developers and major brands are working to meet the demand.

We’re Ready to THINC Africa, Are You? 

There’s nothing more exciting than an industry that has got an opportunity to grow. It was announced this week that the active pipeline of new hotel rooms in Africa is 10 times larger than London, yet 10 times smaller than the US.  Given the size of the continent, Africa has an incredible potential to grow, and new markets are discovered almost on a daily basis. THINC AFRICA will engage with international and regional expert speakers that will not hesitate to come out with thought-provoking opinion. HVS in South Africa has confirmed a sterling list of speakers including Elie Younes, Chief Development Officer for Carlson Rezidor to speak about one of the most successful brands in Africa. To spice it up a bit, it’s now confirmed that more than ten countries will be represented: from Mozambique to Mauritius to Kenya and Angola, offering our delegates a high-level networking opportunity. Come and join us for THINC AFRICA 2016 in a relaxed ambience in one of the most beautiful cities in the world and leave Cape Town enriched by detailed and well-considered comment that is thought-provoking and challenging preconceived ideas.

Renaissance Hotel Kuala Lumpur Sold by IGB Corp for RM765 Million 

Last week, IGB Corporation sold the 921-key Renaissance Hotel Kuala Lumpur (Renaissance KL) to Ventura International Sdn Bhd for RM765 million. A conditional sale and purchase agreement (SPA) was signed between IGB Corp’s wholly-owned subsidiary, Great Union Properties Sdn Bhd, and Ventura International. The hotel commenced operations in mid-1996 with an original investment of RM506.6 million and as at 31 December, 2015, the audited net book value of the asset, which includes all buildings, structures, plant, machinery and equipment as well as fitting, furnishings and fixtures, was RM667.2 million. As a result of the disposal, IGB Corporation expects to make a gain of RM85 million net of tax for the fiscal year ending December, 2017, which would improve its net assets per share and earnings per share by six sen. IGB intends to utilise the proceeds for working capital and to support its continued growth for suitable acquisitions or investments when such opportunity or opportunities arise. After the announcement of the proposed disposal, shares of IGB rose by 1.56% in early trade on 16 August.

A Warm September Forecast for London with the Arrival of this Year’s Hot.E  

This year’s Hotel Investment Conference Europe (Hot.E) is due to take place over 26-27 September at the Hilton London Bankside in London. This will be the first time industry leaders in hotel investment have gathered post-Brexit so there will be plenty to discuss! The event should be in the diaries of anyone looking to invest in Europe. Delegates from more than 30 countries attended last year’s Hot.E and more than one-third of the companies represented were leading debt, equity, and development firms. HVS and HVS Hodges Ward Elliott (HVS HWE) will be at Hot.E this September. From HVS HWE Charles Human, managing director, will be moderating a panel titled Opportunities in the UK; Chris Martin, senior director, will be speaking at the Navigating Hotel Management Agreements session; and Puneet Kanuga, director, will be moderating a panel called The Money Hall – a Focus on Private Equity. For more information or to book your place, click here.


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