The Adina Hotel and Duke of Wellington in Melbourne’s East End have sold for a combined $92 million – marking the end of a 40-year era for the iconic CBD landmarks.
The well-known properties – The Adina Hotel at 88 Flinders Street and the Duke of Wellington at 2 Russell Street – were purchased by separate buyers, with each asset reflecting new pricing benchmarks for their respective sectors.
Both properties were developed by the late Andor Schwartz and have been held by the same family for 40 years.
The assets were offered via an International Expressions of Interest campaign undertaken by CBRE Melbourne Middle Markets’ Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai, in partnership with CBRE Hotels’ Rob Cross and Scott Callow.
The Adina, which comprises a 65-room hotel, was purchased by a major investor, who outbid a number of Asian-based hoteliers and interstate investors. The $53.5 million sale price reflected a yield of 3.45% - one of the sharpest seen in the sector in over a decade.
The second asset, the heritage listed Duke of Wellington pub and office building, sold for a record yield of 4.03% to a private family, with Charter Keck Cramer acting on their behalf.
Established 1853, The Duke is Melbourne’s oldest licensed pub - named after Field Marshal Arthur Wellesley (aka the Duke of Wellington). Wellesley famously led the British forces to defeat Napoleon in the Battle of Waterloo in 1815 and went on to become British Prime Minister in 1828.
Mr Morry Schwartz, spokesman for the family that sold the assets, said: “We were absolutely delighted with the final result achieved on both properties. There is clearly a window for generational property owners to consider offloading their assets whilst the market is showing some very strong signs. “
The campaign generated widespread buyer interest, with more than 35 separate bids received on both properties – including groups from Vietnam, Malaysia, mainland China, Dubai, Taiwan and Hong Kong.
Mr Wizel commented on the campaign: “Top quality real estate always unearths new capital that may have been dormant for several years – as evidenced by this sale result. The Asian buyer market in particular continues to defy the odds, with a number of groups coming forward with strong offers to acquire these iconic pieces of Melbourne real estate.”
Mr Rutman said the sale result highlighted the appeal of Melbourne as a major investment market.
“Melbourne has become a truly international city and this has seen a major uplift in investor demand for mixed use assets, particularly with hotel components that can take full advantage of the current tourism boom,” Mr Rutman said.
“In particular, Flinders Street and the surrounding southern and eastern parts of the Melbourne CBD, have matured to a point where both established investors and new entrants will compete to secure a piece of this established precinct.”
He added: “When existing owners of Melbourne CBD properties continue to pursue opportunities; this is a clear sign that there is still confidence in the growth prospects for the city’s commercial market.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
