Super fund Spirit Super ready to buy Hobart hotel and offices
Tasmanian-based super fund Spirit Super is readying to fork out about $300m to acquire the wealthy Schwartz family’s mixed-use hotel and office development in the heart of Hobart.
The property play is the fund’s first big move since it was created in April, when MTAA Super and Tasplan merged to become Spirit Super, with $23bn funds under management and 314,000 members.
Super funds have been relatively quiet in the most recent bout of commercial property action which has been dominated by listed companies and offshore buyers. But the mixed-use development fitted the bill for Spirit, which has both the ability to buy assets outside the norm and a long-term investment focus.
If the deal on the yet to complete project proceeds it will be the biggest ever struck in Tasmania, with the Schwartz family-backed Trawalla Group seeking to capitalise on the national surge in domestic tourism.
The Trawalla Group functions as the family office for Alan and Carol Schwartz managing the family’s investments, and the Hobart hotel and office development is one of their largest projects.
Spirit recently entered due diligence over the hotel and office property which is one of the most stunning in Tasmania, which has experienced a tourism lift as most state borders reopen. Set above Salamanca Place and overlooking Hobart’s Sullivans Cove and Franklin Wharf, Parliament Square is being completed in stages, with the main office building now occupied by the Tasmanian government and the hotel due to reach practical completion in the next few months.
The project features a FJMT-designed office component spanning about 17,300sq m, which is connected to Parliament House and leased to the Tasmanian government until late 2037.
Also included in the sale is the soon-to-be-completed Tasman Hotel, which will be managed by the Marriott Group and feature 152 luxury rooms, styled by interior designer Joseph Pang of JPDC.
CBRE’s Mark Granter, Kiran Pillai, Michael Simpson and Stuart McCann handled the sale but declined to comment on the transaction. The parties also declined to comment.
When it went on the market, marketing agent Mr Granter said he expected the quality of the asset and the government tenancy covenant of 16 years would “attract widespread interest from some of the largest local and international players in the market”.
Mr Simpson said at the time interest in the Tasman Hotel would be underpinned by the strength of the state’s tourism market, with the property positioned to become one of the best hotels in Australia.
The Salamanca side of the project was completed in late 2017 and the hotel is due to open in October after building was pushed back by the Covid-19 pandemic, with delays in materials being shipped from overseas. The hotel is one of several new big chain hotels to open in the Hobart CBD, with the Vibe Hotel opening and the Movenpick also in the city as tourism demand increases.
MTAA was one of the bigger super fund buyers in the property sector and has forged into a wide variety of areas.
It has property investments in areas including the Alkimos Estates in WA and the Flagstone City, in Queensland, where it also has interests including the Spring Mountain Estate. In Canberra it owns 121 Marcus Clarke Street and the R.G. Casey Building.
It Melbourne holdings include 40 Market Street, 670 Chapel Street, and the Ferntree Business Park.
In 2018, MTAA Super also bought the One Hundred Broadway complex in Sydney from Impact Investment Group for about $70m and it also backed Charter Hall to seed a new retail fund, that bought Campbelltown Mall in Sydney’s west in a near $200m deal.
Tasplan held $1.4bn of property investments, mainly via funds run by Lendlease, AMP, Investa and Charter Hall and Goodman.
Ms Schwartz’s board roles include the Reserve Bank of Australia, EQT Holdings Limited and Qualitas Property Partners.
Mr Schwartz sold a legal publishing and software business, Anstat Group, to a listed company in the early 2000s and is now managing director of the Trawalla Group.