SINGAPORE (EDGEPROP) - Millennium & Copthorne Hotels (M&C), the wholly-owned hotel subsidiary of City Developments (CDL), has entered into a sale and purchase agreement with Bursa Malaysia-listed Ivory Properties to divest the Copthorne Orchid Hotel & Resort Penang in Malaysia for RM75 million ($25 million).

Ivory Properties will acquire the freehold land that the hotel resides on, the 318-key hotel, and all the fixtures, fittings, equipment and tangible personal property.

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This divestment follows the sales of Millennium Cincinnati in the US for US$36 million ($49 million) and Copthorne Hotel Birmingham in the UK for GBP17.2 million ($30.8 million). In total, CDL would gain a combined sales of $104.8 million and pre-tax divestment gains of $50.3 million, of which $23.9 million will be recognised next year.

M&C operates 66 hotels in Asia, Europe, the US and New Zealand. CDL privatised it on Nov 19, 2019, after delisting it from the London Stock Exchange at a valuation of GBP2.23 billion. The company has restructured costs and redirected marketing resources towards domestic tourism.

The divestment is in line with the group’s strategy to extract value from its non-core hotel assets, streamline its portfolio and recycle capital following the onset of the Covid-19 pandemic, since return on equity of hospitality revenue and profits are not likely to recover in the near term, according to the press release by CDL.

M&C also expects to dispose of one or two more hotel assets between now and end 2022.