The proposed $220 million-plus sale of Sydney's Four Seasons Hotel to Thakral Holdings and Singapore's GIC Real Estate is in danger of collapsing.
The consortium had been conducting exclusive due diligence on the property and was expected to strike a deal by today, but Thakral managing director John Hudson said the sale ''wasn't working''.
Mr Hudson declined to comment further, citing confidentiality, but industry sources said it was now considered ''unlikely'' Thakral and GIC would purchase the site.
It is understood the buyers believe the asking price is too high and are uncomfortable with the long management contract to current operator Four Seasons Hotels and Resorts.
The selling agent for the property, Jones Lang LaSalle Hotels's Geordie Clark, said the consortium was still negotiating with the vendor but declined to comment further. The Four Seasons Hotel is majority owned by Chicago-based Walton Street Capital.
Four Seasons Hotels and Resorts holds a minority stake in the asset.
The pair bought the hotel, then Regent Sydney, in June 1998 for about $155 million and undertook a $60 million refurbishment.
It is believed Thakral and GIC had been considering a partial conversion of the hotel.
Thakral has been unsuccessful in attempts to expand its hotel division this year.
A consortium between Thakral and GIC had been short-listed to buy the $400 million-plus InterContinental Group hotel portfolio, but missed out to Eureka Funds Management in August.
It is understood The Four Seasons Hotel is not the only asset in trouble from over-enthusiastic vendors. The sale process of Sydney's 445-room Avillion Hotel rumoured to be facing a similar problem.