Aligned Funds Management has wrapped up the first major hotel deal of 2016, buying the Fortitude Valley’s TRYP by Wyndham street art hotel for $20 million.
The Sydney fund manager completed the deal on behalf of an unnamed client, snaring the four-star property and marking its fifth hotel purchase since late 2014.
The 65-room hotel was the first ‘TRYP by Wyndham’ branded accommodation in the Asia-Pacific and was acquired on a yield of 7.8%, with the previous owner selling with a view to building more TRYP by Wyndham accommodation across Australia.
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Aligned Funds Management executive director Glen Boultwood says Brisbane hotels traditionally struggle to attract weekend trade, but that TRYP’s design is a point of difference that has helped it buck that trend.
“In order to get comfortable with investing in the Brisbane hotel market, especially given the forecast future supply, it was imperative that any hotel could generate strong weekend demand to enable it to outperform the broader hotel market from both an occupancy and rate perspective,” Boultwood says.
The unique design of the hotel, coupled with its exceptional location amongst key demand generators and strong food and beverage venues underpinned buyer interest
“The TRYP hotel has a proven track record in this regard. While there are other boutique hotels located in Fortitude Valley, the design of TRYP is unique and we believe it has the potential to become a destination hotel.”
Each floor of the hotel and their rooms is adorned with art and murals by some of the world’s most renowned street artists, while the building’s other features include restaurants, a rooftop bar and a library-themed meeting room.
CBRE Hotels ran the hotel’s sales campaign, with senior directors Wayne Bunz and Rob Cross fielding more than 200 enquiries.
Cross says TRYP’s location was a key factor in achieving a price beyond $20 million.
“The unique design of the hotel, coupled with its exceptional location amongst key demand generators and strong food and beverage venues underpinned buyer interest,” Cross says.
Bunz spruiks Brisbane’s growing infrastructure pipeline as an indicator of the city’s potential for hotel investors.
While there are other boutique hotels located in Fortitude Valley, the design of TRYP is unique and we believe it has the potential to become a destination hotel
“Brisbane has seen consistent economic growth in recent years and has become one of the most sought-after destinations for hotel operators in Australia,” he says.
“Brisbane is powering along and benefitting from record investment projects, including the Brisbane Airport Corporation’s $3.3 billion expansion, extensive public transport infrastructure, the regeneration of the RNA Showgrounds and Echo’s $2 billion investment into the Queens Wharf casino, retail and entertainment precinct.”