NEWS PROPERTY

The Rydges on Swanston hotel in Carlton on the Melbourne CBD fringe has been listed for sale with a $40 million-plus asking price by prominent Adelaide-based hotel investor David Horbelt. The 107-room hotel stands on a 1,762 square metre corner site at 701 Swanston Street, overlooking Lincoln Square – a small suburban park – and is close to Melbourne University. The hotel is operated by ASX-listed Event Hospitality & Entertainment, whose other brands include QT and Atura. The five-level building is being offered with the potential for vacant possession and is being touted by selling agents Jones Real Estate and Colliers International as a possible high-rise student housing development opportunity. Title deeds show Adelaide-based Hemer Pty Ltd is the ultimate owner of the Rydges on Swanston. Hemer’s sole director and shareholder is David Horbelt. Mr Horbelt own Prime Hotels, whose portfolio of assets include the upmarket The Reef House at Palm Cove near Cairns and the Rydges South Park Adelaide. Both properties were offered for sale in 2016 but failed to secure a buyer. The Rydges on Swanston is being offered for sale by Paul Jones and Tim Spargo of Jones Real Estate in conjunction with Colliers International’s Guy Wells and Oliver Hay. The agents said the vendor was “open to a range of offers including straight sale terms, joint-venture proposals and long-term settlements”. Mr Jones said the site presented buyers with a “genuine development blank canvas”. “Recent activity in the area has demonstrated a strong demand for quality assets, and the development potential of this site makes this a really rare opportunity,” he said. Mr Well said a new owner had the option to owner-occupy the hotel and take advantage of the locational benefits or to increase the room count and appeal to a broader market set. “With a strong occupancy rate of around 86 per cent coupled with a significant conferencing and food and beverage offering, the hotel earnings are very sound,” he said. “At the same time the development opportunities cannot be understated. “ There is significant potential for a purpose-built student accommodation product or educational offering,” he said. One of the more recent hotel sales in Carlton was the former 225-room Tune budget hotel (now and Ibis hotel) which was bought by Sydney fund manager Aligned for $52 million in 2016.

Retailer Gerry Harvey is looking to offload more of his trophy ­assets, with the luxury Byron at Byron Resort & Spa hitting the market for the first time since the billionaire opened it in 2005. “It’s one of our trophy assets like Magic Millions,” Mr Harvey said, adding that he also considered some of his New Zealand horse farms the prized pieces in his real estate empire. “We have got a lot of assets. As (businessman) Sir Charles Lloyd Jones said some years ago, assets are a burden. I don’t need a lot of the things I have got,” Mr Harvey, who turns 80 on September 18, said he believed the 92-suite Byron at Byron Resort, set amid 18ha of subtropical rainforest just outside the NSW north coast town, was worth between $40 million and $50m. The property is 50 per cent owned by a private entity of Mr Harvey’s, with the remainder held by a Harvey Norman Holdings subsidiary, with the decision to sell made jointly by both parties. Mr Harvey’s timing is spot-on, with global interest focused on Australian leisure assets since the Denver-based KSL Capital Private Equity Group took over Baillie Lodges and this year bought another resort, Silky Oaks Lodge in Queensland’s Daintree, into its portfolio. In 2017 a private equity firm backed by Melbourne’s multi-billion-dollar Liberman family bought through CBRE the world-renowned Byron Beach House Hotel for $70m. It was the single-largest Australian pub transaction — a record that still stands. Byron at Byron selling agent Wayne Bunz said there was a high level of interest in Australia’s destination leisure market. “After several of our high-profile clients approached us to find a location in Byron Bay, CBRE ­Hotels submitted off-market expressions of interest for the Byron at Byron, and subsequently convinced the vendors to take it to a public marketing campaign,” Mr Bunz said. He expected the level of interest in Byron at Byron would be substantial, not only from existing owner-operators and seasoned hoteliers, but also from high-net-worth individuals ­attracted by the prestige of owning a property in northern NSW. “It’s well noted that getting approvals to build this type of asset in Byron Bay and to acquire the land parcel is notoriously difficult, with the location characterised by its high barriers of entry for new accommodation offerings due to environmental protection laws,” Mr Bunz said. “To date, no international branded resort exists in Byron and we are confident that this property could potentially allow an investor to partner with one of the world-renowned leisure brands to enter this tightly held location.” Mr Harvey recently listed his Runaway Bay waterfront apartment project site after toying with developing it for more than a decade. The site is for sale through Gold Coast agent Mark Feltell.

Bathurst’s Edinboro Castle Hotel has changed hands and its new owners are looking to restore the historic drinking hole. There has been plenty of speculation in recent times about the future of the hotel but it was put to rest in a post on the Eddy’s official Facebook page past week. “The rumours are true … The beloved Eddy has been sold!” the post stated. The pub has been purchased by locally run MPK Hotels, adding to their growing local presence which also includes the Hotel Dudley on Stewart Street.

Former Frasers Property Australia chairman Stanley Quel’s management and investment company Greenfliff is converting the luxury residential unit at its mixed-use Grand Victorian mansion property at 413 Bourke Street in Surry Hills into eight hotel rooms. Greencliff bought the property in 2012.

Adelaide’s Watermark Hotel in Glenelg has sold for $25 million, marking the CBD’s biggest pub sale in 20 years. The Elmes family offloaded the property to Australian Leisure and Hospitality Group after owning it for 22 years. The 8395sq m complex at 631 Anzac Highway has 40 gaming machines, a 15-room motel and a drive-thru bottle shop, McGees Property Adelaide’s Grant Clarke and James Juers handled the sale.

Kuwaiti-owned Action Hotels Group has listed the 3.5 star Ibis Glen Waverley for sale, the first major Melbourne hotel to hit the market this year. Action Hotels Group, listed on the London Stock Exchange and founded by Sheikh Mubarak, heir to the Kuwaiti throne, developed the suburban hotel in 2007, in conjunction with Accor. The offering comes as hotel builders and operators flock to the city. At least 10 new hotels are due to open in Melbourne this year. Even Sydney developer, “high-rise” Harry Triguboff, has finally entered the Melbourne market, buying one of Besgate’s sites at 140 King Street, through Colliers International, for a Meriton Suites tower. CBRE Hotels agents Wayne Bunz – a former hotel chef – and Scott Callow are handling the expressions of interest campaign which closes in mid-May. The 155-room hotel is at 297 Springvale Road on the other side of the council offices from Century City and Vicinity’s The Glen shopping centre. It includes a cafe, restaurant, bar, conference and function facilities and a large business centre. Late last year, Mr Bunz sold the Ibis Brisbane to Worldwide Hotels for around $100 million. “On the back of that we had a number of parties approach us regarding this property,” he said. “We convinced Action to take it to market. This is an absolute workhorse of a hotel.” “People might say there’s a lot of hotel stock coming on the market in Melbourne but it’s the most resilient hotels market in the country, because of the year round events calendar,” he said. In late 2016, iProsperity paid $73.66 million for the larger Novotel hotel nearby and industry sources suggest the Ibis will fetch around $55 million.

Ascott Residence Trust (Ascott Reit) is buying a 150-room business hotel near Sydney Airport in Australia for A$60.6 million (S$58.8 million), the hospitality trust announced on Wednesday (March 27) during the mid-day trading break. The freehold limited-service Felix Hotel will be rebranded as Citadines Connect Sydney Airport upon completion of the deal in May 2019, the trust manager said. The acquisition will be the trust’s first business hotel in Australia and its first property to be managed by its sponsor, The Ascott Ltd, under the new Citadines Connect brand. It will be funded by bank loans, divestment proceeds from the previously announced sale of Ascott Raffles Place Singapore, or a combination of both. The deal has an Ebitda (earnings before interest, tax, depreciation and amortisation) yield of 6 per cent. Assuming that the acquisition is fully funded by bank loans, the trust’s gearing will increase from 37.4 per cent as at end-Dec 2018 and accounting for funding for lyf one-north Singapore, to 38.2 per cent, before accounting for proceeds from the Ascott Raffles Place divestment, which is due to complete in May. Rooms at the hotel, which was completed in February 2018, range fro 18 to 40 square metres. The building sits next to the 91-unit Quest Mascot, which is also owned by Ascott Reit and has an occupancy rate of more than 85 per cent. Beh Siew Kim, chief executive of the trust manager, said the acquisition “will enable us to leverage scale and increased operational efficiency from the clustering effect across these Ascott-managed properties.”

A popular Yeppoon tourist park has been listed for sale. The caravan park at 9 Scenic Hwy, has 103 sites, including 12 cabins and 21 permanent residences, as well as 12 non-powered and 58 powered caravan sites.