Six-star resort in the offing after Cairns hotel sale
Cairns is proving to be one of Australia’s leading hotel growth markets, with the Rydges Tradewinds Cairns selling for $34 million at the same time as the landmark Novotel Cairns Oasis Resort is listed for sale.
In its first hotel acquisition, GA Group Austraila acquired the Rydges Tradewinds Cairns amid continued strong interest in northern Queensland hotel investment opportunities.
Meanwhile, the upscale four-star Novotel Cairns Oasis Resort, which is the second largest hotel in the city, will be offered for sale through an international expressions of interest campaign, starting next month.
CBRE Hotels’ national director Rob Cross says Cairns is in the midst of an unprecedented boom.
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“The Cairns market has witnessed record hotel transactions in the past 18 months and with limited to no new supply of new hotels in Cairns in the immediate future, the asset’s sale is expected to attract a strong pool of interest,” Cross says.
According to Smith Travel Research Global, Cairns is the leading accommodation market in Australia in terms of growth, with revenue per available room up 15.1% in the 12 months to January 2016 and occupancy levels up 8.6% to 74.7%.
GA Group spokesman Mark Davie says GA Group is looking to undertake a substantial refurbishment of the Rydges Tradewinds Cairns to create a five to six-star offering for the Cairns market.
The hotel currently features 246 hotel rooms and is located on a 8138sqm site along the Cairns Esplanade.
Rydges Tradewinds was sold by Abacus Funds Management as part of an ongoing asset selldown, with the net proceeds to be applied to the repayment of debt obligations. The fund has two hotel assets remaining – Rydges Esplanade in Cairns and Novotel Twin Waters on the Sunshine Coast.
While the Novotel Cairns Oasis Resort is currently operated by Accor Hotels Group under the Novotel brand with favourable management terms, vacant possession is available upon sale.
The hotel features 314 guest rooms and suites, ranging in size from 26sqm to 72sqm, and is positioned on a 1.23ha site.
With limited to no new supply of new hotels in Cairns in the immediate future, the asset’s sale is expected to attract a strong pool of interest
Located at 122 Lake St, Novotel Cairns Oasis Resort is in direct proximity to the city’s major tourist attractions, including the $50 million Cairns Aquarium development on an adjoining site, Cairns Esplanade, Reef Casino, Reef Fleet Terminal and the convention centre.
The large site also offers the possibility for additional development, subject to council approval or alternatively a strata selldown of parts of the resort.
“The resort’s prime position, which benefits from direct frontage to Abbott and Lake Sts, combined with the strong fundamentals of the Cairns hotel market, are expected to underpin strong buyer interest,” Cross says.
CBRE Hotels’ Wayne Bunz and Cross have been exclusively appointed to sell the Novotel Cairns Oasis Resort via an international expressions of interest campaign that closes on May 12.