Barossa Motor Lodge sells for $1.85 million

Colliers International sells 3.5-star motel accommodation in Tanunda.

A high-yielding motel investment asset in Tanunda, South Australia’s thriving wine region, has sold for $1.85 million.

The Barossa Motor Lodge, located at 182-186 Murray Street and currently leased to proprietor Scrub Country Pty Ltd, sold through Colliers International, via an expressions of interest campaign. 

Investment Services director Oliver Totani, and executive Tom Isaksson, handled the transaction. 

“This investment had strong interest from the broader investment market, as they continued to chase strong yield,” Mr Totani said. 

“Given the property’s location and purpose-built form, we fielded interest from potential owner-occupiers, including motel and low-cost accommodation providers, who may look to gain control of the leasehold over time.”

The motel offers 3.5-star-rated accommodation, including 40 individual units, a central reception area, 160-person restaurant, bar, commercial kitchen, function room and manager’s quarters.

In addition, improvements include a landscaped garden and lawn area, in-ground pool with spa, tennis court, visitor parking for about 40 vehicles and a carport for each motel unit.

“The Barossa Motor Lodge is a rare motel investment opportunity in the world-renowned Barossa Valley, offering established facilities with potential for further development in this highly regarded international tourist destination,” Mr Isaksson said.

“This is a successful investment in one of Australia’s most popular tourist destinations and substantial improvements.”

Mr Totani said the property presented an opportunity to acquire a strong commencing net yield with the potential to add extensive value.

It has a current net income of $180,563.30 per annum, plus GST, and comes with a five-year lease, which commenced in December 2013, plus further four-by-five-year options to renew. 

Within the world-famous Barossa Valley wine region, the motel is located about 80 kilometres north-east of the Adelaide CBD and close to more than 50 wineries. 

“The Barossa Valley is to Adelaide what Chianti is to Tuscany,” Mr Totani said. “Tanunda is the largest township in the wine region, ensuring ongoing tourist demand for accommodation, with the Barossa Motor Lodge set to be a key beneficiary moving forward.”

“All in all, with approximately 1.315 hectares of residentially zoned land, this strategic land-bank underpins what is already a sound investment opportunity.”

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