Mantra pays $52.5m for famous Art Series Hotels
One of the nation’s largest hoteliers, Mantra, has bought the Art Series Hotels group in a $52.5 million deal, in a bid to boost its presence in the luxury sector.
The deal adds more than 1000 suites and apartments to Mantra’s existing stable of 128 hotels and includes the freehold title to commercial lots and offices.
Inspired by Australian contemporary artists, Art Series Hotels operate in Victoria, South Australia and Queensland. Mantra will now control the leasehold and management letting rights across the portfolio.
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The vendor, Melbourne’s wealthy Deague family, says the Art Series Hotel portfolio has been a $570 million play for the Deague Group over the past eight years, with four individual owners now controlling the bricks and mortar of the seven hotels including The Olsen, named after legendary Australian artist John Olsen, with 224 rooms in Melbourne’s South Yarra.
Deague Group chief executive Will Deague says Mantra approached his group to buy the leasehold over the seven properties and will retain the Art Series moniker as well as most staff.
This is a rare opportunity to acquire a collection of exceptional hotels
Deague says the four and five-star hotels average 91% occupancy.
“We believe the time is right to exit the five-star hotel space,” Deague says.
Despite the sale to Mantra, the Melbourne family is not lessening its grip on Australian hotels. It is developing a $100 million six-star, 165-room hotel at the Howard Wharves development under Brisbane’s Storey Bridge.
“The idea is to hold this asset. It will be one of the top three hotels in Australia,” Deague says, adding the hotel will include two 1000-seat conference facilities and would open in early 2019.
An eighth Deague hotel, in the Melbourne suburb of Box Hill, is due to open later this year.
All up, the Deague group has 1750 apartments under construction, including one of Melbourne’s tallest residential developments, comprising more than 520 apartments in suburban Box Hill.
Meanwhile, Mantra Group chief executive Bob East says the acquisition enhances the listed hotelier’s existing portfolio and presented a unique opportunity for Mantra Group to increase its footprint across three key locations in a single transaction.
“This is a rare opportunity to acquire a collection of exceptional hotels,” East says.
This article originally appeared on www.theaustralian.com.au/property.