French giant buys up trio of Sydney Olympic Park hotels
French giant AXA Investment Managers-Real Assets is poised to strike the biggest hotel deal of the year after it entered due diligence to buy three hotels at Sydney Olympic Park and a fourth in Canberra for up to $330 million.
The play is the largest the AXA investment unit has made in Australian property since it bought the Eureka funds business two years ago.
AXA is targeting the Abu Dhabi Investment Authority’s 177-room Novotel Sydney Olympic Park, 212-room Pullman at Sydney Olympic Park and 144-room Ibis Sydney Olympic Park. The portfolio also includes the Novotel Canberra, which has significant development potential.
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The decision by the Abu Dhabi sovereign wealth fund to sell shows its willingness to capitalise on the top of the hotel investment cycle after it restructured key elements of the former TAHL portfolio. It is also banking on high hotel occupancies on the eastern seaboard.
The entire Olympic Park hotel portfolio, which was developed in the late 1990s for the 2000 Olympic Games, is operated by the French hotel giant Accor under a 50-year management agreement.
The deal continues a run of transactions in the hotel arena as buyers start to flock to the more than $1 billion worth of hotels that are on the market across most major Australian cities.
Big offers still in the market include the $300 million worth of budget Ibis-branded properties that were offered for sale mid-year by AccorInvest.
That firm is selling its local hotel portfolio to focus on European assets. The 23 hotels and leased properties being offered comprise 1800 rooms in Melbourne, Sydney and Newcastle.
Chinese-backed wealth company iProsperity recently paid about $200 million for Melbourne’s five-star Pullman on the Park hotel and the Park Regis Hotel in Sydney recently sold to Taiwan’s Yeh family for $54.18 million.
AXA’s Australian head of real assets, Kumar Kalyanakumar, was instrumental in Eureka’s $390m purchase of the InterContinental Hotels Group portfolio of nine hotels in Australia and New Zealand in 2005. Mr Kalyanakumar declined to comment last night.
The properties were disposed of with SB&G Hotel Group buying a $500m portfolio including the Intercontinental Melbourne, Crowne Plaza Melbourne, Crowne Plaza Coogee, Crowne Plaza Canberra and Holiday Inn Potts Point in 2015.
The parties and agents JLL Hotels and Savills declined to comment.
AXA’s local operation includes Melbourne’s landmark 101 Collins St building, a stake in Brisbane’s $1.6 billion Indooroopilly Shopping Centre and towers in Sydney.
– with Ben Wilmot
This article originally appeared on www.theaustralian.com.au/property.
