Melbourne, 13 March 2014 –Hong Kong-based Ovolo Group Ltd, part of Hind Hotels & Properties Ltd, has acquired the Oaks on Lonsdale Services Apartments complex in Melbourne following an international Expressions of Interest campaign.
Wayne Bunz and Rob Cross of CBRE Hotels handled the sale of the property on behalf of PPB Advisory, as Receivers & Managers.
Including Oaks on Lonsdale, CBRE has negotiated over $200 million in Australian hotels sales in the first quarter of 2014.
Mr Bunz said the Oaks on Lonsdale campaign had generated significant interest from South East Asia and China as well as a number of domestic investors and owner operators.
“The response was as strong as we have ever encountered, confirming Melbourne as a priority destination for foreign capital into Australia,” Mr Bunz said.
“The international campaign, which kicked off just on six weeks ago, attracted over 220 enquiries and resulted in over 30 inspections.The depth of interest, predominantly from offshore, demonstrates the current demand for quality hotel assets in prime CBD corporate locations.”
Mr Bunz added; “Offshore buyers are extremely keen to get a foothold in Australia with Melbourne and Sydney the primary focus in the first instance.”
The 4.5 star Oaks on Lonsdale incorporates 148 spacious guest rooms, the majority of which are one or two bedroom apartments. The property is situated at the Paris end of the Melbourne CBD, at the heart of the city’s live theatre precinct.
“This sale represented a unique offering in the hotel sector, in that the property is currently subject to a lease agreement to Oaks Hotels & Resorts (Vic) Pty Ltd expiring in 2017, but with the opportunity to secure vacant possession if required.Add to this the strata sell down potential, and it’s no surprise that this one of our busiest ever campaigns,” Mr Cross said.
“In addition to the traditional hotel investors and owner operators, through our offshore network we were also able to introduce a number of new entrants to the Australian market.One of the benefits a global firm such as CBRE can offer in the current climate is the ability to tap into new capital sources, whether that is in South East Asia or Northern Asia, particularly China,” Mr Cross added.
Ovolo Group Ltd. has a strong network of Hotels in Hong Kong and, whilst being relatively new to the Australian hospitality scene, the purchase of this property is part of an agreesive Brand expansion strategy across Australia. Ovolo currently owner operate the Award Winning and much covered Lifestyle Hotel Ovolo on Little Bourke Street in Melbourne.
The sale caps a busy month for CBRE Hotels in Australia following on the heels of the Park Hyatt Melbourne sale to Fu Wah International.
“The Park Hyatt deal represented Fu Wah’s first foray into Australia and it was CBRE’s strong relations with Fu Wah in China that was instrumental to securing this transaction,” Mr Bunz said.
“We are seeing more and more Asian and Chinese capital destined for Australia and there is a much wider buyer pool than we have seen historically for Australian hospitality assets.Cross border collaboration is therefore imperative in securing this inbound capital.”
Mr Cross added that the sales momentum from Q1 was expected to continue over the course of the year, with a number of off market transactions, similar to the Park Hyatt deal, already in the pipeline.
“It’s very much a sellers’ market at present,” Mr Cross said, adding that much of the new capital eyeing Australia was willing to pay a premium to buy assets off market.
“This is particularly attractive to many of the Chinese buyers who require more time to come to terms with the Australian market, our legal processes and to secure the appropriate domestic approvals to proceed with acquisitions.”