City Developments Limited (CDL) has agreed to divest the Copthorne Orchid Hotel & Resort Penang in Malaysia for MYR75m (around $18.5m).

CDL’s wholly-owned subsidiary Millennium & Copthorne Hotels Limited (M&C) entered into the sale and purchase agreement with Berhad Malaysia-based Ivory Properties Group.

The transaction includes the 318-room Penang hotel, the freehold land that the hotel resides on, all fixtures, fittings, equipment, and tangible personal property.

The company said that the move is part of its strategy to extract value from its non-core hotel assets, streamline its portfolio and recycle capital amid the Covid-19 pandemic.

According to CDL, the sale of the Penang hotel is expected to lead to a pre-tax gain of S$9.2m next year.

It is said to be the group’s third non-core hotel asset divestment this year, a combined sales value of S$104.8m.

Earlier this year, M&C agreed to sell Copthorne Hotel Birmingham in the UK for £17.2m. The sale is expected to be completed in the third quarter of the next year.

It followed the sale of Millennium Cincinnati in the US for $36m.

Overall pre-tax divestment gains for CDL is said to amount to S$50.3m, of which S$23.9m is expected to be recognised next year.

London-headquartered M&C has been privatised by the group last year. It has a network of 66 hotels across Asia, Europe, the USA, and News Zealand under the Millennium Hotels and Resorts global brands. Seven of these are managed by third parties.

Additionally, M&C operates 79 hotels under franchise and management contracts.

The company said it is currently evaluating other unsolicited offers for its non-core assets. These offers may be subject to re-zoning and regulatory approval for change of use from hospitality, it added.

In 2011, CDL Hotels Holdings Japan, a subsidiary of M&C, announced £113m investment to expand its hotel portfolio with the opening of a new property in the Tokyo district of Ginza, Japan.