Leisure Ventures, an associated company of Hotel Properties Limited (HPL), is acquiring the freehold interest of a 740-acre hotel site in Tuscany, Italy, for EUR 22.6 million ($35.5 million).

Castello Del Nero is a 50-key five star hotel with spa, two restaurants and a fully consecrated chapel in Tuscany Italy. In addition to the hotel and facilities, there is a separate agro-tourism accommodation with 12 apartments, vineyards and olive trees producing grapes and olive oil for sale, plus five additional residences with consent for refurbishment into independent villas.

The entire interest in Castello Del Nero is held by Castello del Nero S.p.A through 1,103,290 shares. For the purpose of the acquisition, Leisure Ventures has set up a wholly-owned subsidiary company in the United Kingdom known as Leisure Ventures Europe Limited (LVEL) which has entered into the sale and purchase agreement with vendor Rej Investments for the sale of Castello del Nero S.p.A.

Under the sale and purchase agreement, LVEL will also discharge the entire indebtedness of Castello of EUR 16.9 million.

HPL will fund the acquisition with a mix of bank financing and internal resources.

As Ong Beng Seng, the MD and controlling shareholder of HPL, is deemed to be interested in the balance 50% interest in Leisure Ventures held through Rizona (Hong Kong), the acquisition is regarded as an interested person transaction under the listing rules of the Singapore Exchange.

HPL says the acquisition will allow the the group to further diversify its hotel portfolio geographically which is in line with the group’s business strategy. It will also allow the HPL to leverage on the wealth of experience of Ong and associates in hotel investment as well as to share the investment risks.