iProsperity Group secures largest metropolitan hotel east of Melbourne CBD, as appetite for hotel and accommodation assets continues to inflate
One of Melbourne’s best-performing hotels, the Novotel Melbourne Glen Waverley, sold late last year for $73,666,666.66.
Colliers International’s Gus Moors, Neil Scanlan and Guy Wells negotiated the transaction with Sydney-based investment firm iProsperity Group, following an expressions-of-interest campaign.
Mr Moors said the sale reflected solid buyer demand in the Melbourne hotel market, with major hotels a rarely offered asset type in recent years.
“While the Sydney market witnessed significantly more transactional activity over 2014/15, Melbourne had a strong finish to 2016, with the sale of the Novotel on Collins and the Travelodge Docklands, which was also sold by Colliers International,” he said.
Mr Wells said a continued appetite for hotel and accommodation assets was expected in both Melbourne and Sydney during 2017.
“Melbourne finished the year with an occupancy rate of 86.6 per cent, up 0.2 per cent, and achieved a recorded RevPAR of $178.38, up 0.3 per cent, which is largely in line with 2015 recorded rates,” he said.
“When considering the somewhat reduced conventions and events held during 2016, this is a strong result. Meanwhile, Sydney recorded an increase in occupancy of 0.6 per cent and a growth in RevPAR of 6.3 per cent during 2016.”
Mr Wells said 2017 was anticipated to be another strong year in the hotel market, with the recently announced “open skies” policy potentially increasing Australia’s appeal and visitation from mainland China.
“The removal of capacity restrictions on flights between Australian and Chinese carriers will allow increased visitation for both Chinese tourists and Australians travelling to China,” he said.
“This comes at a time where Melbourne is beginning to see the start of new hotel openings in a strong pipeline across coming years. Notably, 2017 will see the opening of the 273-room Four Points by Sheraton in Docklands in March, as well as a 160-room Hyatt Place due to open at Essendon Airport in early 2017."
The Novotel Melbourne Glen Waverley had been owned for almost 20 years by a private syndicate, which is subject to a triple net lease to Accor Asia Pacific due to expire in July, 2018.
Located at 285 Springvale Road, Glen Waverley, the Novotel Melbourne Glen Waverley comprises 200 upscale rooms, a spacious bar and restaurant, flexible meeting space, well-equipped gym, indoor pool and underground parking for about 100 cars.
“The surrounding corporate offices and business parks within the city of Monash are strong drivers of performance for the hotel,” Mr Wells said.
“The purchasers view the asset as having trading upside in years to come, with the exposure to the business performance going forward.”