New Mercure sells at 5 per cent yield
Another Mercure backed hotel has sold, this time in the south east Melbourne growth corridor of Pakenham.
The four month old venue – built on a site which for generations accommodated the family home of the Bourke family, which established the then-neighbouring Pakenham Racecourse in 1885 – collected $15.8 million from a local investor.
The result reflects a five per cent net passing yield – 100 basis points less than expected.
Stonebridge’s Rorey James and Kevin Tong with Wilson Property’s Ben Wilson and Emma Dunne represented the vendor, builder and hotel operator BFN Developments, which offered it with a 20 year leaseback.
Eight offers
Mercure Pakenham was one of the priciest assets offered as part of a regular bulk auction event for investment properties, last November, by Stonebridge.
Over three levels, the hotel contains 64 suites, a boardroom and restaurant.
The 4287 square metre site also includes 71 car parks.
Mr James said despite some investors being sensitive to last year’s rising cash rate, eight suitors contested (story continues below).
The incoming owner will also be able to claim depreciation benefits for tax, he added.
“Given the brand new building and long lease tenure, the opportunity ticked a lot of the boxes for investors which allowed the campaign to capture interest from a range of investors,” according to Mr Tong.
“With the opening of borders in China we witnessed increased level of enquiry and engagement from groups planning to migrate to Victoria in 2023 which created more competitive tension throughout the campaign,” the agent said.
“Ultimately the asset was purchased by a private family which our team has been dealing with over the past few years,” he added.
The deal comes seven months since brothers Bill and Mario Gravanis paid $85m for Caroline Springs’ WestWaters Hotel and Entertainment complex, which includes a 98 room Mercure.
Last March, meanwhile, the Laundy family picked up Port Macquarie’s Mercure Centro, with 72 suites, for $25m.
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