LaSalle Investment Management has sold a hotel in Melbourne for AUD237m (€159m), offloading the 380-room Novotel asset to Singapore-listed Frasers Hospitality REIT.

The LaSalle Asia Opportunity Fund III bought the hotel and an adjoining retail mall in 2011 from Thakral Holdings, a Singapore-based group, and undertook a major redevelopment.

Although the manager has not confirmed the sale, it has said the asset is on the market and that there has been “strong” interest.

When launching a rights issue in Singapore last Friday to raise SGD266m (€175m), Frasers Hospitality Trust said the raising would fund the acquisition of the property and strengthen its balance sheet.

Eu Chin Fen, chief executive at Frasers Hospitality Trust, said in a statement to the Singapore Stock Exchange that the acquisition would provide income diversification mitigating any dilution of the trust’s distribution per stapled security as a result of the rights issue.

This is the second transaction LaSalle has undertaken with Frasers, which bought the Sofitel Wentworth in Sydney for around AUD203m in 2014.

The closed-end LaSalle Asia Opportunity Fund III is being wound up as assets are sold to capitalise on demand for well-located core property around the world, particularly in Asia-Pacific.

As well as selling the Melbourne hotel, LaSalle is reported to be in advanced negotiations with JP Morgan Asset Management to offload the adjoining retail mall for around AUD250m.

When completed, LaSalle will have realised a total of AUD487m from the two properties – more than double its initial purchase price of AUD204m.

LaSalle has refurnished the hotel and overhauled the retail component, adding 60 additional shops and attracting Coach and British fashion label REISS to the mall.

Similarly, LaSalle paid AUD130m for the Sofitel Sydney Wentworth in Sydney to realise a capital gain of almost 60% when it sold to Frasers.

Again, LaSalle refurbished the hotel, in Sydney’s central business district.

Following its latest acquisition, the Fraser Hospitality Trust’s global portfolio of hotels and serviced residences, including those in London, will increase to 15 properties, valued at SGD2.3bn.

The Novotel Melbourne will be its first hotel in Melbourne and fourth in Australia.

In May, Frasers purchased the Maritime Hotel Dresden – a freehold, 328-room property in Dresden, Germany – for €58.4m from Internos Global Investors.