Friday 25 January 2008

Diversified property group Devine Limited (ASX: DVN) has announced the $136 million pre-sale of its first apart-hotel development, located at 131-135 Bourke Street in Melbourne.

The 398-room development has been purchased by the Singapore-based, The Ascott Group.

Listed on the main board of the Singapore Exchange, The Ascott Group is the serviced residence arm of CapitaLand Limited, one of the largest listed real estate companies in Asia.

The Bourke Street complex is targeted for completion by the end of 2010. The 25-level development will incorporate conference and recreational facilities and will also feature retail outlets fronting Bourke and Little Collins Streets.

Devine announced the acquisition of the 2,000 square metre site at 131-135 Bourke Street for $18 million in March 2007. Settlement on the land purchase by Devine will occur on 31 January 2008.

Devine founder and Managing Director David Devine said the sale highlights the prime positioning and quality of the development.

"This pre-sale represents a strong result for Devine and demonstrates the success of our strategic diversification into hotel development and our continued expansion within the Victorian market," he said.

"We are looking forward to delivering a premium quality product which will add extra capacity to Melbourne's strong-performing tourism accommodation sector.

"Melbourne is a key market for Devine and we will continue to investigate further opportunities to grow our presence there across our portfolio, including the home and land, and high rise divisions."

The Ascott Group purchase of Devine's Bourke Street development was negotiated by Jones Lang LaSalle Hotels Chief Executive Officer Asia Pacific, David Gibson. Mr Gibson said Melbourne is one of Australia's best performing hotel markets, with occupancy levels consistently around 80 per cent.

"Melbourne has proven over many years to be one of the most resilient hotel sectors in Australia largely due to the Victorian Government's market-leading events program, which is amongst the best in the world," he said.

"We expect occupancies in Melbourne to remain close to 80 per cent in the short term and the annual room rate growth is forecast to average 5 per cent each year up to and including 2012.

"The opening of Melbourne's new Convention Centre in 2009 is expected to fuel even higher demand in the medium-term. Devine's new Bourke Street apart-hotel development is well positioned to cater for this growth."

Devine's Bourke Street development follows the company's completion of its $338 million Victoria Point Docklands complex in Melbourne's Docklands in early 2006. Devine has been actively building its development pipeline in Victoria in the past year, purchasing six prime residential land parcels in high-growth corridors surrounding Melbourne for a total of more than $110 million.

Devine has a current national pipeline of land developments and projects which, when completed and sold, will have an end value exceeding $3 billion.

In May 2007 Leighton Holdings acquired a 40 per cent stake in Devine, injecting $95.6 million in equity and enabling Devine to fast-track its diversification program and undertake further geographic expansion.

Leighton and Devine are also committed to exploring joint venture development opportunities. In this regard, a joint venture with Leighton Properties in respect to the delivery of Devine's $400 million mixed-use Hamilton Harbour project in Brisbane's inner-north was announced to the market in late December 2007.

On 29 August 2007 Devine announced an after tax profit of $21.367 million for the 2006-07 year, 13.2 per cent up on the previous year's result.

The company's December 2007 half-year results are expected to be in the range of 15 to 20 per cent above the $6.987 million profit after tax result recorded for the same period in 2006.

About The Ascott Group

The Ascott Group is the world's largest international serviced residence owner-operator with close to 15,000 operating serviced residence units in key cities of Asia Pacific, Europe and the Gulf region, as well as about 6,000 units which are under development, making a total of close to 21,000 units.

The Group operates three brands - Ascott, Somerset and Citadines. Its portfolio spans 55 cities in 23 countries, 13 of which are cities where Ascott's serviced residences are being developed.

The Ascott Group is headquartered in Singapore. It pioneered Asia Pacific's first branded luxury serviced residence in 1984. It also established the world's first pan-Asian serviced residence real estate investment trust, Ascott Residence Trust in 2006. Today, the Group boasts a 24-year industry track record and serviced residence brands that enjoy recognition worldwide.

The Ascott Group's achievements have been recognised internationally. Recent awards include TravelWeekly China Industry Awards 2007 'Best Serviced Residence', Business Traveller China Awards 2007 'Best Serviced Residence Brand', World Travel Awards 2007 'Australasia's Leading Hotel' and 'New Zealand's Leading Hotel', TTG Travel Awards 2007 'Best Serviced Residence Operator', Securities Investors Association of Singapore Investors' Choice Awards 2007 'The Most Transparent Company (Hotel & Restaurants)', Business Traveller UK Awards 2007 'Best Serviced Residence Company', Business Traveller Asia Pacific Awards 2007 'Best Serviced Residence Brand' and 'Best Serviced Residence' and Forbes China 2008 'China's Best Serviced Apartments'.

For a full list of awards, please visit http://www.theascottgroup.com/aboutus/awards.

Listed on the mainboard of the Singapore Exchange, The Ascott Group is the serviced residence arm of CapitaLand Limited, one of the largest listed real estate companies in Asia. Headquartered in Singapore, the multinational company's core businesses in real estate, hospitality and real estate financial services are focused in gateway cities in Asia Pacific, Europe and the Middle East. The company's real estate and hospitality portfolio spans more than 100 cities in over 20 countries.

For more information on The Ascott Group's property listings, visit http://www.theascottgroup.com/aboutus/group_directory.html.

Contacts:
Mr David Devine, Managing Director, Devine Limited on (07) 3233 1402
Kathy MacDermott, Director, Rowland on (07) 3229 4499 or 0448 844 508