Deal falls through for 11 Travelodge hotels

Travelodge Docklands.
Travelodge Docklands.

A deal that could have resulted in motoring organisation NRMA becoming the full owner of the Tucker Box Hotel Group, which controls 11 Travelodge hotels around the country worth more than $600 million, appears to have collapsed.

The motoring organisation was mooted to be a major beneficiary of Mirvac’s exit from the Tucker Box Hotel entity that the pair jointly own.

But Mirvac announced on Wednesday night it had been unable to agree to terms to sell its interest in the Tucker Box Hotel trust. The group said at the end of May that the sale was expected to occur by the end of the 2019 fiscal year and it would realise approximately book value for its stake.

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Mirvac says that, without making the sale, its preliminary fiscal 2020 earnings per share growth guidance would be greater than 3% versus the 2019 fiscal year, against greater than 2% if it had sold its interest in the hotel vehicle.

Mirvac says its preliminary fiscal 2020 distribution per share guidance of 5% growth compared to the 2019 fiscal year remains unchanged.

While apparently unable to agree on sale terms, the pair will continue to hold equal stakes in the unlisted venture that owns the hotels, with about 2000 rooms in total. The NRMA, which has been aggressively expanding into caravan parks, had been negotiating to take full control, but this bid appears to have ended, property executives said.

The group owns three Travelodges in the Sydney central business district as well as hotels in the Sydney suburbs of Manly, Macquarie Park, Bankstown and Blacktown. The portfolio is also represented in Newcastle, Melbourne and Brisbane.

The Mirvac and NRMA 50-50 joint venture last year sold the 74-room Travelodge in Rockhampton to Chinese investors for about $7 million.

The properties are leased to Value Lodging, a subsidiary of Toga Far East Hotels.

The NRMA declined to comment.

The Tucker Box Hotel Group was set up in March 2005 and focuses on the limited-service hotel market in Australia.

Mirvac had the properties in the venture valued at $614 million when it had 12 hotels with 2027 rooms before selling the Rockhampton property last year.

NRMA has a large tourism portfolio and said in its last annual report that it was shifting funds from the investment portfolio into operating businesses.

As part of this, the NRMA sold its interest in a Melbourne Docklands property to reinvest in its transport and tourism businesses.

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