This article is from the Australian Property Journal archive
THE Bursztyn family is looking to capitalise on demand for accommodation properties by putting the boutique Royce Hotel and adjoining office building in St Kilda Rd on the market.
The hotel is expected to fetch in excess of $60 million.
McVay Real Estate’s Dan McVay and Sam McVay have been appointed by the family to sell the asset via an expression of interest campaign closing on Thursday 5th October 2017 at 4.00 pm AEST.
Sam McVay is expecting strong interest from Australian, Singaporean and Hong Kong investors.
He said whilst interest from Chinese investors could be impacted by Beijing’s recent decision to put property and hotels on the restriction list, McVay believes there will be other offshore and Australian players vying for the hotel.
Originally designed in 1920s by Harry Norris as the Rolls Royce showroom, the Bursztyn family acquired the property in the late 1990s and redeveloped the former showroom into a boutique hotel.
Located at 375 – 389 St Kilda Rd, the 5 Star hotel and Freeman McMurrick building is offered with vacant possession. The Royce Hotel occupies a 2,164 sqm freehold site and comprises 100 rooms, the ‘dish’ restaurant, the ‘Amberoom’ bar, a grand ballroom for 300 people, conferencing and event facilities, a gymnasium and 25 undercover car spaces. The Freeman McMurrick building is a four level property comprising 1,125 sqm of lettable area, including 14 undercover parking bays, set on a 491 sqm site.
There is development approval for 67 additional hotel rooms, an expansion of the grand Ballroom and conferencing facilities, the creation of a new rooftop gym / treatment room and additional ground floor retail.
The family operated the hotel privately without an association to a major hotel chain.
Sam McVay said a vacant possession gives the incoming owner an opportunity to sign a major hotel chain as an operator.
“The Royce Hotel has been privately managed as a standalone hotel since its opening in 2000 and now provides the opportunity to introduce branded hotel management to further improve both the sales distribution networks as well as creating cost efficiencies,” Dan McVay said.
Melbourne is currently on the radar of global major hotel chains, with Marriott International last week committing to a new 200-room property at Docklands – its first Australian new build hotel in 20 years.
This comes after Marriott’s W Hotels brand signed a deal to open a 294-room hotel at Collins Arch, which has been sold to Japan’s Daisho for $220 million.
In March, Singapore’s UOL Group snapped up the Hilton Melbourne South Wharf hotel for $230 million to debut its Pan Pacific brand in Melbourne.
“Melbourne is consistently one of the best performing hotel markets in the Asia Pacific and it is a rare opportunity to have the ability to create an additional 67 rooms and increased conferencing in this key location,” McVay said.
Australian Property Journal
