Rydges Gladstone sold as $5m seed for new hospitality fund
Melbourne-based fund manager C2 Capital has purchased Rydges Gladstone as the seed asset for a new hospitality fund in a deal worth about $5 million.
The C2 fund is mandated to acquire hospitality assets to satisfy significant demand from investors hoping for an above-market yield in the sector.
“We are very pleased with this acquisition and excited about our move into sustainable, affordable luxury hospitality projects,” C2 Capital director Sunil Kumar says. “We have great faith in the steady growth in the region.”
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Event Hospitality and Entertainment put the hotel on the market in June along with Rydges Port Douglas.
Apart from the 95-room Rydges Gladstone in the heart of the Queensland township, C2 Capital is negotiating to buy four other hotels over the next 12 months and will also be developing new affordable luxury hotels.
Commercial real estate and hospitality executive Kurt Braune from KBCG acted on behalf of C2.
“This purchase was a very strategic acquisition for C2 Capital as the local economy slowly recovers from the post-mining boom,” Braune says.
“As part of the turnaround strategy for the hotel, we will be undertaking a significant upgrade to enhance the guest experience as the property is tired and in need of a makeover. This will include additional facilities including a gym, co-working areas and a food and beverage offering that will cater to health-conscious guests.”
Upgrades to the property will start early next year.
CBRE Hotels agents Paul Fraser and Hayley Manvell handled the sale. Fraser says the deal is an example of an astute buyer identifying a counter-cyclical opportunity to invest in Gladstone.
“The hotel has great bones and can be renovated to capitalise on the market’s improving fundamentals and the resurgence in the Gladstone economy,” he says.
CBRE has witnessed renewed investor interest in regional Queensland properties, which signifies a perception that these markets have bottomed and are in a recovery phase.
This article originally appeared on www.theaustralian.com.au/property.