This article is from the Australian Property Journal archive
TOURISM Asset Holdings Limited has decided to sell the beachside hotel Novotel Melbourne St Kilda after receiving significant unsolicited interest.
TAHL CEO Matthew Eady said there had been significant unsolicited interest in the property given its premier location, strong ongoing cash flow and attractive alternate use as a residential development.
“Given the strength of investor and developer interest, we have decided to consolidate that into a formal sales campaign,” he added.
CBRE’s senior director Wayne Bunz and associate director Mark Wizel are selling the property by expressions of interest, which closes on the 26 July.
Bunz believed the Novotel represented a unique opportunity and was certain to be keenly sought after by traditional and non-traditional, national and international investors.
The recently refurbished hotel includes 211 rooms over six levels and is located at 16 The Esplanade. The 5,791 sqm site includes excellent onsite parking facilities and is zoned Residential 1 under the City of Port Phillip.
He said that in the current market, buyers are looking for unique assets that will allow value add opportunities.
“The Novotel St Kilda presents just such an opportunity, by combining a strong income producing hotel that will generate a healthy return on equity, with significant vacant possession opportunities including the potential to re-develop the site in the future.
“The comparative resilience and diversification of the overall Australian economy as well as the high liquidity and stability of our local market continues to drive offshore interest,” he added.
Wizel said St Kilda was arguably one of the most lucrative residential markets in Melbourne.
“This is an extremely rare opportunity to acquire an asset generating strong cash flow with short-to-medium term redevelopment potential located on the famous St Kilda Esplanade.
“Residential apartment projects in St Kilda have consistently achieved a higher rate per sqm compared with the Melbourne average over the past decade mainly due to the substantial imbalance between supply and demand,” Wizel said.
The agents are expecting strong interest from local and overseas buyers with a large contingent of Singaporean, Malaysian and Mainland Chinese developers expected to closely examine the opportunity.
Wizel said Asian-based developers have invested $450 million in Melbourne development opportunities over the past 18 months.
Property Review
