Mulpha pays $41m for Rydges hotel in Cairns

The Rydges resort in Cairns has been sold to Mulpha.

Malaysian investment giant Mulpha International has struck its first local hotel acquisition in years, buying The Rydges Esplanade Cairns hotel in a $41 million deal.

Mulpha is not expected to stop there with chief executive Greg Shaw revealing the conglomerate is looking for more hotel acquisitions to add to its existing holdings that include the Intercontinental Hotel Sydney and the One and Only Hayman Island resort.

“Mulpha continues to actively pursue hotel investments both directly and through fund and syndicate structures and apply our specialist operational knowledge to maximise returns,” Shaw says.

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The former Ardent ­Leisure chief last year told The Australian that he was keen to expand in hospitality and the group was among the contenders for the Hilton Melbourne South Wharf Hotel in 2015.

Mulpha bought the 242-room Rydges Esplanade hotel from an unlisted Abacus Property Group fund in a deal negotiated by CBRE Hotels national director of sales Wayne Bunz.

Underpinning investor interest has been the strong performance of the Cairns market, which has been the leading market in Australia as a result of record international and domestic travel numbers

Billed as a four-star property, the sprawling hotel sports a lagoon pool as well as restaurants and bars. Bunz says $230 million worth of hotels has sold in Cairns in the past 18 months at an average price per room of $152,000. The Rydges Tradewinds, Cairns and the Novotel Oasis Cairns recently sold to offshore buyers.

“Underpinning investor interest has been the strong performance of the Cairns market, which has been the leading market in Australia as a result of record international and domestic travel numbers,” Bunz says.

For the year ending July, average Cairns occupancies jumped more than 6% while average daily room rates increased 7.4% to $133.90.

Bunz says investors are turning to leisure offerings because of the tourism boom, with inbound arrivals numbers up 10% over the past year, and because of the tightly held nature of the major CBD markets. Of the 53 hotels that sold last year, 60% were in capital city markets while 40% were regional properties.

“So far in 2016, 35% of acquisitions have been in capital cities and 62% in regional and leisure locations, indicating a shift in investor intentions,” he says.

CBRE Cairns managing director Danny Betros says there has been a 5.2% increase in domestic passengers arriving at Cairns Airport in the 12 months to July this year.

– with Ben Wilmot

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