Melbourne group muscles in on two Queensland hotels

The hotels are the first Queensland properties for the company as it pushes ahead with a goal of greater geographic diversification and aims for a target of $1 billion in assets.

The sale comes after the vendor reportedly went into due diligence with a buyer off-market last year to sell the properties for $110 million but the deal fell through.

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The larger property, Watermark Hotel & Spa Gold Coast, has 388 rooms while Watermark Hotel Brisbane has 94 rooms. The two will keep operating under the Watermark brand in the short term.

The hotels feature conference and food and beverage facilities, and SB&G said the acquisition would allow it to expand into the growing tourism market on the Gold Coast as well as the corporate market.

HIS bought the Surfers Paradise site in the 1990s before developing the hotel.

The price for the hotels is understood to be about $100m, although SB&G declined to ­comment on the terms.

“The transaction represents a strong opportunity for growth, given the synergies with our ­existing portfolio of hotels across Sydney, Melbourne and Can­berra, acquired in December 2015,” SB&G Hotel Group managing director Paul Salter says.

“The group anticipates that one of the global hotel brands will be selected for operation of one or both of the hotels ­moving forward.”

The group’s executive director, Michael Gu, says the properties are “attractively priced on a per room basis, materially lower than replacement cost”.

The deal is expected to be completed by June 30.

HIS is a Japan-based global travel group with 271 branches in 156 cities, operating a range of local and international travel agents and tour companies as well as hotels, resorts, theme parks and a travel insurer.

This article originally appeared on www.theaustralian.com.au/property.