Mildura motel sold after renovation
Carpe Diem Property has sold one of four regional hotels from a fund formed four years ago with Redhill Hospitality Group.
The freehold for the Boulevard Motor Inn, at Mildura, is trading for $7.65 million to an owner of similar venues in the area and in New South Wales and Queensland, Adhirah Pty Ltd.
On 3035 square metres at 385-389 Deakin Avenue – also the Sturt Highway – a few blocks from the heart of town, the 4-star venue contains 48 suites, a restaurant and bar, targeted to the corporate mote inn market, which Carpe founding partner Simon Wheatley said has dramatically increased recently in Victoria and New South Wales.
Annual revenue for the beds is $1.786m the executive said; all up the lettable area spreads c1500 sqm.
Also with a restaurant – paying $500,000 annual rent – the hospitality component traded on a 12 per cent yield.
Another buyer snapped up a much smaller residential plot neighbouring the Boulevard Motor Inn.
Manenti Quinlan & Associates’ Ray Larkin and Malcolm Mathie with Professionals – Mildura’s Tony Roccisano were the agents.
The result was against a target of $8.5m when the properties were listed nine months ago – a result which would have reflected a 13pc trailing EBITA yield on FY24 profit.
Carpe’s first motel exit
The Boulevard and land deal demonstrates a 42pc internal rate of return.
It is Carpe’s first motel exit since it began investing in the sector in 2021 for three funds.
Red Hill Investments also holds an eastern seaboard portfolio, with a combined c500 rooms.
Boulevard Motor Inn proceeds will be put into its other projects, a spokesperson said for the partnership said.
“After acquiring it several years ago as of the assets in the Red Hill Regional Accommodation Fund 2, we have tripled revenue…and undertaken some upgrades,” Carpe Diem Partner director, Simon Wheatley, said, adding it spent hundred thousand dollars.
“The performance reflects our strategic initiatives and the strength of regional markets we identified and commenced investing into in 2020,” according to the executive.
“The annual property yield has varied but was high in FY24 in particular, yielding over 20pc on invested equity.
“We continue to have strong investment interest in the sector and believe it to be an early stage opportunity ripe for aggregation and consolidation.
“We are already one of the largest owners of freehold going concern assets in the sector in Australia with assets across three states.
“We are in early stages of engagement with potential major cornerstone investors for a rollout of this strategy Australia wide, and welcome additional discussions”.
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