Hotel Property Investments (HPI) has listed two of its regional pubs assets for sale in a move to capitalise on the bullish market conditions for freehold investment hotels.
The Hotel Allen in Townsville and the Grafton Hotel in Cairns are both leased to Wesfarmers subsidiary, Liquorland (Qld) Pty Ltd. Coles (Liquorland) currently operate 89 hotels in Queensland, Western Australia, South Australia and New South Wales under the Spirit Hotels brand.
HPI has appointed CBRE Hotels’ National Director Daniel Dragicevich and Queensland Directors Paul Fraser and Glenn Price to steer the Expressions of Interest process with the support of CBRE Metropolitan Investments Director Darren Collins.
Mr Fraser said; “The freehold hotel market has become a national marketplace in the past seven years with many investors from the southern states and from the west purchasing assets in Queensland. Queensland legislation enhances the underpinned values of these assets, providing the operator the ability to sell off-premises liquor.
HPI is the largest landlord to Coles (Liquorland) nationally in the hotel space with a portfolio of 43 assets.
Mr Price said the lease covenant to Coles - the second largest hotel operator in Australia – would be one of the drawcards for prospective purchasers, as would the location of the two properties.
“Both Cairns and Townsville offer significant baseline populations and are not heavily reliant on the mining sector, positioning both regional cities as secure investment locales” Mr Price said.
The Hotel Allen occupies a large 6,186sqm site with three street frontages. It is situated between the Townsville CBD and The Strand, a 2.2km, beachfront promenade.
The property is secured by a strong covenant and high cash flow in the short term, with potential to develop or reposition the property in the future. Due to the current commercial zoning, the scale of the holding could enable a purchaser to create a staged mixed use precinct in the future.
The Grafton Hotel is located in the southern Cairns suburb of Edmonton on a 3,968sqm land parcel offering 69 metres of frontage to the Bruce Highway. The area is a major residential growth corridor with surrounding development including a mix of retail and commercial properties anchored by an IGA shopping complex.
The timing of the divestment coincides with CBRE Hotels’ recent sale of the Mansfield Tavern in the outer Brisbane suburb at a record yield of circa 5.8% for a Coles covenant.
David Charles, Managing Director and Chief Executive Officer of HPI, said; “We have watched closely the compression of yields in the sector and are looking to leverage the current market to maximise value for security holders for the longer term.”
Sales campaigns for both Hotel Allen and the Grafton Hotel will close on Wednesday the 26th April 2017.
The Hotel Allen in Townsville and the Grafton Hotel in Cairns are both leased to Wesfarmers subsidiary, Liquorland (Qld) Pty Ltd. Coles (Liquorland) currently operate 89 hotels in Queensland, Western Australia, South Australia and New South Wales under the Spirit Hotels brand.
HPI has appointed CBRE Hotels’ National Director Daniel Dragicevich and Queensland Directors Paul Fraser and Glenn Price to steer the Expressions of Interest process with the support of CBRE Metropolitan Investments Director Darren Collins.
Mr Fraser said; “The freehold hotel market has become a national marketplace in the past seven years with many investors from the southern states and from the west purchasing assets in Queensland. Queensland legislation enhances the underpinned values of these assets, providing the operator the ability to sell off-premises liquor.
HPI is the largest landlord to Coles (Liquorland) nationally in the hotel space with a portfolio of 43 assets.
Mr Price said the lease covenant to Coles - the second largest hotel operator in Australia – would be one of the drawcards for prospective purchasers, as would the location of the two properties.
“Both Cairns and Townsville offer significant baseline populations and are not heavily reliant on the mining sector, positioning both regional cities as secure investment locales” Mr Price said.
The Hotel Allen occupies a large 6,186sqm site with three street frontages. It is situated between the Townsville CBD and The Strand, a 2.2km, beachfront promenade.
The property is secured by a strong covenant and high cash flow in the short term, with potential to develop or reposition the property in the future. Due to the current commercial zoning, the scale of the holding could enable a purchaser to create a staged mixed use precinct in the future.
The Grafton Hotel is located in the southern Cairns suburb of Edmonton on a 3,968sqm land parcel offering 69 metres of frontage to the Bruce Highway. The area is a major residential growth corridor with surrounding development including a mix of retail and commercial properties anchored by an IGA shopping complex.
The timing of the divestment coincides with CBRE Hotels’ recent sale of the Mansfield Tavern in the outer Brisbane suburb at a record yield of circa 5.8% for a Coles covenant.
David Charles, Managing Director and Chief Executive Officer of HPI, said; “We have watched closely the compression of yields in the sector and are looking to leverage the current market to maximise value for security holders for the longer term.”
Sales campaigns for both Hotel Allen and the Grafton Hotel will close on Wednesday the 26th April 2017.
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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.
