Caydon sells Vibe Hotel Melbourne for c$108m

TFE Hotels opened Vibe Hotel Melbourne at 1-5 Queen Street in May. Caydon has now sold the property for a speculated $108 million.

Caydon has offloaded another Melbourne hotel, this time in the city.

Vibe Hotel Melbourne, which opened in May at 1-5 Queen Street, is speculated to be selling for $108m to Sino Pacific Trading Company Limited, the food importing business owned by Thailand’s Savetsomphob family.

The mooted purchaser paid the same price for the 145-key Vibe Darling Harbour, in Sydney, in March – its maiden Australian purchase.

The Melbourne property rises 23 storeys and includes 206 rooms, a bar, gym, indoor swimming pool, restaurant and conference facilities.

At the north west corner of Flinders Street, it was constructed into airspace of the 1873 Cobden Buildings – which between 1955-2011 was occupied by Fletcher Jones and more recently was rented to street-wear brand Culture Kings.

Caydon, directed by Joe Russo, paid Malaysia’s Creative Wealth $18m for the 737 square metre plot which made way for the hotel, in 2016. At the time it had been approved for a residential project.

In mid-2018, TFE Hotels announced the property would be its tenth Australian Vibe.

Largest Australian hotel sale this year: agents

Mr Russo appointed JLL’s Peter Harper and Craig Collins to sell Vibe Hotel Melbourne off-market.

The brokers said their sale price is the largest for an Australian guesthouse this year (story continues below).

“This is the first sale of a major operating Melbourne CBD hotel for several years,” Mr Harper added.

“Most investors recognise that relative to the size of the market, Melbourne hotels are incredibly tightly held, and regardless of the environment they need to act decisively to secure high quality opportunities when presented.

“The transaction follows several other notable sales across Melbourne including the Ibis Little Bourke Street, Holiday Inn Melbourne Airport, Next Hotel Melbourne (under construction) and Pullman Melbourne on the Park, all of which were undertaken by JLL”.

Mr Collins said investors consider Australia’s hotel sector to have strong underlying fundamentals, and that the long-term outlook, is strong.

“This is no different in the current environment as, on a daily basis, investors have been expressing their desire to enter the market or grow their existing holdings.

“Whilst this is just one of two major hotel transactions to occur nationally this year, there would no doubt have been more had existing owners not delayed their investment strategies.

“We are confident that all quality offerings put to the market in the coming months will be keenly contested”.

Seven months ago Caydon sold a new nine-level, 97-suite Sebel Moonee Ponds, seven kilometres north east of Melbourne, to the local Scerri family for $40m.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco