Salter Brothers make NEXT hotel move in Brisbane
Australia’s hotel sales market is picking up after a quiet start with Salter Brothers joining the ranks of buyers, purchasing Brisbane’s NEXT Hotel & CBD Retail development from financial services company Challenger for about $150 million.
The purchase comes hot on the heels of The Australian revealing Chinese-backed funds manager iProsperity was targeting Sydney’s Sofitel Wentworth, with the price on that deal mooted at about $314 million, down on the $400 million originally sought.
Salter Brothers has also tapped investment banks UBS and Credit Suisse to raise up to $250 million in two tranches ahead of a potential float of a hotel fund.
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The Brisbane deal was brokered by JLL’s Tom Gibson and Simon Rooney and boosted the Salter Brothers hotel empire to about $1 billion.
Buying the NEXT Brisbane will take their hotel portfolio to more than 2400 rooms, with seven hotels across Sydney, Melbourne, Canberra, Brisbane and the Gold Coast.
The property includes a 304-room hotel operated by NEXT Story Group and the prime retail fronts Queen Street Mall in Brisbane’s CBD.
A wave of deals that includes hotels with attached shopping centres or office towers is underway as buyers look beyond traditional commercial property in search of higher returns.
Rooney says mixed-use CBD retail assets in prime locations are tightly held and in demand, as shown by two recent deals, Dexus buying a half stake in the MLC Centre in Sydney for $800m and then 80 Collins Street in Melbourne for $1.48 billion.
Brisbane’s Queen Street Mall is one of the strongest retail strips in the country and Mr Rooney noted retailers were chasing locations that maximised foot traffic and exposure for their business, which underpinned tenant demand for super-prime retail strips and precincts.
Top city retail strips have defied the gloom around the industry, with JLL citing positive drivers such as surging residential population and white collar employment growth, alongside key infrastructure upgrades.
Formerly known as Lennons Hotel Brisbane, the 4.5-star hotel is primed for growth as it sits near the $3.6 billion Queens Wharf Casino, the $2 billion Brisbane Live entertainment precinct and recently opened $200 million Howard Smith Wharves project.
“This is a timely acquisition for Salter Brothers to enter Brisbane as the market begins to mature, with a record wave of private and public projects under way,” Gibson says.
Scores of new luxury hotels have opened in Brisbane recently, including the W Brisbane, Westin Brisbane, Calile James Street and the popular Emporium South Bank, all coming online.
“With Sydney and Melbourne hotel markets becoming increasingly difficult to enter we are receiving record interest for other core markets, as evidenced by the recent liquidity seen in Brisbane and Perth,” Gibson says.
This article originally appeared on www.theaustralian.com.au/property.
