Darwin, 16 July 2014 – The Rydges Darwin Airport Hotel and Resort are to be offered for sale in an International Expressions of Interest campaign. Wayne Bunz and Rob Cross of CBRE Hotels have been appointed to sell the two Darwin International Airport properties, which are expected to attract significant buyer demand.
The hotel and nearby resort are being offered for sale in one line and comprise of a total of 317 rooms, with approval to boost the size of the hotel to 328 rooms.
CBRE Hotels Senior Director Wayne Bunz said the campaign provided a rare opportunity to acquire two of just a handful of true airport hotels in Australia. Both hotels are a very easy walk from the Airport terminal.
“Airport hotels are exceptional investments as they typically outperform competitors in terms of occupancy, rates and overall revenue,” Mr Bunz said.
“Furthermore, the incoming purchaser will have exclusive rights to further accommodation developments at Darwin International Airport, providing significant future opportunities.”
The properties are currently operated by Rydges Hotels, although vacant possession is available if required, allowing for rebranding. Mr Bunz said this would ensure strong interest from Asian investors looking to gain brand profile in the Australian market.
The prime location of the two properties, combined with the strong fundamentals of the Darwin hotel market is expected to underpin buyer interest.
The Northern Territory Government’s Invest NT report recently said; “Darwin has great opportunities to become a world-leading centre for engineering, financial, medical and education services. It is on the cusp of evolving in the same way as Singapore, which has used its location to become a modern thriving city with high quality housing, services and quality of life.
“The properties are expected to be highly appealing to many major chains and will also generate interest from owner operators who are actively seeking to establish their brand in Darwin,” Mr Cross said.
“The portfolio also has significant upside potential given a recent refurbishment and DA approval providing an incoming buyer the option to increase the room inventory.”
Mr Bunz added; “Darwin is booming right now and is the investment hot spot of Australia, with over $50 billion in current infrastructure and development projects occurring in the region. This includes the $34 billion INPEX LNG development, which is the largest single private investment in Australian history.
Real Estate Institute of Northern Territory CEO Quentin Kilian recently said; “I asked an INPEX executive what the effect of the project would be on Darwin and he said, ‘In the 20th century, there were three sleepy little villages in the Middle East - Dubai, Qatar and Abu Dhabi. Look what oil and gas did to them’, so we have to assume, whether it’s on the same scale or less, there will be a huge impact that will change the face of Darwin.”
Another project currently underway is a $60 million upgrade of Darwin International Airport, which will deliver an expanded terminal, an enlarged Qantas club and a new 150-seat Virgin Australia lounge. The project is the biggest in the history of the airport and the increased capacity is expected to provide a further boost to the local tourism industry.
The revamped terminal represents $42.5m of the total bill and will almost double in size, going from 16,000 to 27,000 square metres.
Mr Bunz noted that Darwin had been the strongest performing hotel market in Australia in recent years, particularly in relation to RevPAR growth.
“Demand growth had easily outpaced supply increases, which had been one of the significant draw cards for hotel investors,” Mr Bunz said, adding that there had already been substantial preliminary interest in the Rydges portfolio.
He tipped that the campaign would attract particularly strong enquiries from South East Asia given Darwin was the closest Australian capital city to Asia.
“In recent times there have been a considerable number of Australian hotel transactions involving offshore investors from Asia who are looking to enter the highly viable Australian hotel market,” Mr Bunz said.
Significant stakeholders in the Darwin Airport Hotels Pty Ltd ownership entity include Stewart Baron from Baron Corporation in Melbourne and Phillip Wolanski of the Sydney based Denwol Group.
The sale plans coincide with the owners’ decision to focus on other business interests including the recently announced $60 million venture to build the new 208 room Rydges Hotel at the RNA Showgrounds in Brisbane.
The International Expressions of Interest campaign closes August 28th at 1pm AEST.
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