Bell City Hotel rings for $160 million

Bell City Hotel on Bell Street in Preston.
Bell City Hotel on Bell Street in Preston.

Hong Kong private equity firm Gaw Capital is moving to buy the landmark Bell City Hotel in Melbourne for more than $160 million in what is shaping as one of the largest hotel deals of the year.

The hotel, student accommodation and office complex hit the market late last year via JLL Hotels but is now likely to be snared by the offshore group that has close ties vendor Elanor Investors Group.

Gaw Capital has a solid record of investment in Australia, and in 2016 teamed up with Abacus Property Group for a $200m opportunistic investment fund targeting industrial assets on the nation’s east coast. It specialises in buying under-used real estate assets, redesigning and repositioning them, as does Elanor.

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Gaw Capital says it has raised $US9.6 billion ($12.7 billion) in equity since 2005, with $US14 billion under management.

Gaw is no stranger to hotel assets, having bought the Standard Hotel in Manhattan for $US323m, with the acquisition price $US77 million lower than the 2014 reported selling price of the hotel.

It is understood Gaw is yet to exchange on the high-profile Melbourne hotel and office property, but a deal is close.

Gaw Capital president and managing principal Kenneth Gaw could not be reached for comment last night.

Bell City Hotel vendor, the $1.1 billion real estate fund manager Elanor, bought the 844-room mixed hotel and student accommodation property for just over $142 million just over three years ago. Elanor executive Marianne Ossovani declined to comment.

The fund has reached the end of its three-year life — hence Elanor’s decision to sell the hotel in the Melbourne suburb of Preston.

The four-star hotel and three-star student accommodation is presently managed by Mantra and Breakfree, which was recently bought out by French giant Accor in a $1.2 billion deal — Australia’s largest.

Part of the hotel site can be redeveloped with a permit for a complex of 377 apartments, 520 car parks and commercial space.

– with Ben Wilmot

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