Singapore investors pounce on Travelodge Docklands
Singapore-based investors are setting the pace in buying Melbourne hotels with two major inner-city properties snapped up in the past few weeks.
Singapore-based investment group Sing Holdings has made its first foray into the Australian property market with the $107 million acquisition of Travelodge Docklands from Singaporean billionaire Michael Kum.
Separately, Frasers Hospitality Trust has tied up the funding to back its purchase of the Novotel Melbourne in the heart of Collins St for $237 million.
The flurry of Melbourne hotel action comes as analysts predict strong growth in the coming years for the domestic hotel market in light of strong trading conditions.
Colliers International Australian head of hotels Gus Moors, who brokered the Travelodge sale with colleagues Neil Scanlan and Guy Wells, says Melbourne has proven to be “one of the country’s most resilient markets”.
“It has strong occupancy rates and an excellent track record of absorbing new stock when it comes on the market,” Moors says.
Colliers International has also led the campaign to sell Novotel Glen Waverley — 25km from Melbourne’s CBD, with it going on the market by interests associated with Sydney financier Phil Green for more than $70 million.
Moors says he is watching to see how much supply comes through the pipeline in case it leads to possible headwinds.
“But not all that supply comes through and again, Melbourne has that track record of readily absorbing stock,” Moors says.
Sing Holdings’ board of directors told the Singapore Stock Exchange the Docklands purchase was “an opportunity for the company to expand its core business and diversify its portfolio”.
“The hotel will be the company’s first hospitality asset,” they say.
Travelodge Docklands sits on the waterfront, a five-minute walk to Etihad Stadium, and caters to business and budget travellers.
Melbourne has proven to be “one of the country’s most resilient markets”
Kum put the 291-room Docklands property on the market — bought originally in 2001 for $45 million — shortly after he scrapped plans to offload a $1.5 billion chunk of the M&L Hospitality hotels portfolio in Australasia.
The Frasers trust says its purchase of the Novotel Melbourne from LaSalle Investment Management has the “potential to capture higher yielding business”.
“It is also well-positioned to ride on Melbourne’s growing hospitality market, which has seen an increase in occupancy and revenue per available room since 2010.”
Meanwhile, Southbank’s Hilton South Wharf — jointly owned by developer Plenary and US group Host Hotels & Resorts — is also back on the market via JLL Hotels & Hospitality, after a short hiatus, for more than $250m.
The Hilton-operated hotel was originally up for sale last year as Plenary was pushing ahead with plans to build another hotel near the Melbourne Convention Centre and the US group said it would sell a series of properties.
This article originally appeared on www.theaustralian.com.au/property.