Melbourne, 28 January 2014 – The Oaks on Lonsdale Serviced Apartments complex in Melbourne is to be offered for sale via an International Expressions of Interest campaign.
Wayne Bunz and Rob Cross of CBRE Hotels have been appointed to sell the freehold interest in the property on behalf of Receivers and Managers, Brett Lord and Stephen Longley of PPB Advisory.
Mr Bunz said the campaign was expected to generate significant interest, predominantly from South East Asian and Chinese investors looking to gain a foothold in the Australian hotel market.
It follows the announcement last week that the Park Hyatt Melbourne had been sold to China’s Fu Wah International Group in its first significant foray into the Australian property market.
“Melbourne is considered a priority destination for foreign capital into Australia,” Mr Bunz said.
“Without exception, global investors, particularly South East Asian and Chinese buyers, will not enter other Australian markets until they have made an initial acquisition in either Sydney or Melbourne – the capital city with the strongest revenue per available room growth during 2013.”
The 4.5 star Oaks on Lonsdale is prominently located within the north-east corridor of the Melbourne CBD, in the heart of the city’s live theatre precinct.
Completed in 2007, the property offers 148 spacious guest rooms, the majority of which are one and two bedroom apartments. There are also five levels of parking for 56 cars.
The property is currently operated under a lease to Oaks Hotels & Resorts (Vic) Pty Ltd expiring in 2017, with a further three, five-year lease extensions available.
“A fully leased hospitality asset is a rarity in the Australian hotel market and as such we expect that non-traditional institutional buyers, as well as traditional hotel buyers will express interest in this offering,” Mr Cross said.
“Most Australian hotels and serviced apartments are subject to Management Agreements and therefore have a variable income stream over time. However, the lease to Oaks ensures the hotel income is not subject to these fluctuations, nor will the income stream be affected by future supply increases in Melbourne.”
In addition, Mr Cross said the property was expected to appeal to owner operators and strata developers.
“Vacant possession is available if required, thus allowing for a rebranding or owner occupation,” Mr Cross said.
“The incoming owner could also look to strata-title and sell-down the individual apartments as an alternative exit strategy.”
“An additional opportunity for value upside is to incorporate food and beverage facilities into the property. None currently exist but there is space for these facilities to be developed”.
The international Expressions of Interest campaign closes Thursday 27 February, 2014 at 2.00pm AEST.
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