This article is from the Australian Property Journal archive
THE private owner of Australia’s first Le Méridien has successfully secure refinancing of the existing debt facility for the hotel from a wide range of capital sources.
Recently opened in the heart of the CBD, the $100 million 12-storey 235-key Le Méridien Melbourne at 20 Bourke Street, was designed by Melbourne-based architect Peddle Thorp to incorporate the original 1850s façade at the site of the former Palace Theatre.
Adam Bury, executive vice president at JLL, lead the transaction, creating a range of solutions for the owner via a competitive tender process.
“Whilst the Le Méridien Melbourne did have limited trading history, having only opened in the first quarter of 2023, we were able to secure incredibly strong terms for the owner through our strategic and considered approach to potential lenders,” said Bury.
12 financing offers were submitted for the hotel, with the preferred solution was executed within an expedited time frame to secure the best possible outcome for the borrower.
“We see a changed debt market in the second half of 2023, particularly as existing lenders review their existing loan books. However, increasing capital allocation to commercial real estate debt from non-bank lenders ensures that we are not short on options for our clients. In this instance, the quality of asset, location and in-place management agreement proved pivotal for the outcome,” added Bury.
“As Melbourne’s hotel market continues to recover from COVID, we continue to see good levels of both equity and debt interest in the market for the right deals. It is however clear that we are in a new phase of the cycle, and with this imperative that owners seek thorough and well thought out advice for any capital events within their portfolio”.
In the Melbourne CBD hotel market, the landmark Hotel Sophia recently hit the market for the first time in three decades, after major renovations.
