The Abu Dhabi Investment Authority has purchased Australia's largest hotels owner, Tourism Asset Holdings Ltd, giving it ownership of 31 properties in the country's major cities.
An investment unit of the Abu Dhabi fund signed the contract for an undisclosed price, Bloomberg reports. The deal's value is estimated to be $740 million, according to media reports.
The hotels will continue to be operated by Paris-based Accor. The portfolio includes hotels in the mid-market segment operating under the Pullman, Novotel, Mercure, Ibis, Ibis Styles and Ibis Budget brands, according to The National.
Foreign investors are increasingly targeting Australia's prime hotel market, which provides higher yields than Australian commercial properties, analysts say. South Korea's Mirae Asset Global Investments Co. purchased Sydney's Four Seasons Hotel for $316 million in August.
"The mood particularly from offshore purchasers is strong for hotel assets," Rob Cross, regional director for hotels at CBRE Group Inc., told Bloomberg. "They are seeing Australia as a very transparent and secure property market. The operational side of hotels in Australia's corporate market is very strong."
Tawreed Investments, a unit of the Abu Dhabi fund, was part of a consortium that leased two Australian ports for A$5.07 billion in April.
Tourism Asset Holdings launched in 1993 and was privatized in 2002.
"We chose to run a discreet, targeted sale process and we were very pleased with the response we received," Matt Eady, TAHL's chief executive said in a statement, referring to the Abu Dhabi fund transaction. "This sale is the culmination of a successful four-year strategy since taking TAHL's platform independent in 2009."