This article is from the Australian Property Journal archive
A PRIVATE and Singapore REIT investor closed two hotel deals in Melbourne yesterday.
Ascott Residence Trust has bought the Shoan Heights Apartment freehold and business for $11.6 million. The property is located at 19-25 Little Bourke Street in the Melbourne CBD and features 43 serviced apartments, Cheers Bar & Grill.
The property will soon be rebranded Somerset Gordon Heights.
Meanwhile, a private Singaporean investor has bought the base St Kilda backpackers property for $11.75 million. The property at 17 Carlisle Street has a long-term lease to an affiliate of Accor Asia Pacific, for 20 years with plus two 5-year options.
The new 231-bed facility features the RedEye bar, base travel agency, an entertainment room with a large screen cable TV, basement car parking for 17 vehicles and 48 adaptable fully air-conditioned dormitory rooms.
Both sales were negotiated by Jones Lang LaSalle Hotels’ Mark Durran and Marcello Jimenez on behalf of their private owners.
Duran, who negotiated the Ascott deal, said the Australian hotel investment market, which has been dominated by domestic investors in recent years, has seen increased activity by Asian investors this year, both private and REITs.
“Given the long-term lease and strong lease covenant of the tenant, the sale price reflected an initial yield in the order of 6.25%.” he added.
Jimenez, who negotiated the base St Kilda deal, said as well as pubs and major hotels, tourism accommodation assets under $20 million in major cities continue to be very popular.
“Demand for quality freehold and leasehold hotel properties is at a high due to the favourable trading conditions being achieved at present,” Jimenez said.
Australian Property Journal
