NSW publicans buy vacant Cairns hotel

The Gravanis brothers, Craig Power and Tierzah Douglas teamed for TPG with a Tamworth portfolio purchase in 2021.

A joint venture between brothers Bill and Mario Gravanis and Tamworth husband and wife, Craig Power and Tierzah Douglas, has swooped on a prime Cairns hotel, accepting an offer of vacant possession.

Pacific Hotel Cairns opened in 1982.

The 11 storey Pacific Hotel Cairns is expected to be rebranded following the c$35 million deal to TPG Hotels (TPG or The Pub Group is a name the publicans bought into with their 2021 purchase of a Tamworth portfolio also branded that, from Bevan and Joan Douglas).

Suites from levels four to nine of the Cairns hotel were renovated in 2022.

Perth based Pacific Hotels was the vendor.

It is also the operator but offered the asset empty.

However, based on the income it was proposing, the result would reflect a 4.3 per cent yield.

CBRE’s Wayne Bunz and Hayley Manvell brokered the deal following an off-market expressions of interest campaign.

Pacific Hotel Cairns

On 3570 square metres at 43 The Esplanade, on the corner of Spence Street, the 4-star Pacific Hotel Cairns contains 207 suites, a restaurant, pool and car park.

Opened in 1982 and last refurbished six years ago, when 31 rooms were added, it derives income from four ground floor tenancies occupied by two businesses: Destination Cairns Marketing and Flamingos Tiki Bar (story continues below).

The Pacific Hotel Cairns lobby.

Two years ago, levels four to nine were renovated.

Storeys 10 and 11 – all up with 44 rooms – aren’t being utilised following a fire in 2021.

“The sale represents an initial yield of 4.3 per cent and a stabilized yield on a three year basis of 7.25pc,” Mr Munz said.

“This demonstrates the demand for Cairns’ accommodation assets with genuine upside,” he added.

“Infrastructure improvements and a lack of new hotel supply is underpinning investors in Cairns, with the supply constraints expected to support the continued recovery of the city’s limited pool of assets” according to the executive.

“This has already been reflected in increased room rates and revenue, with ADR and RevPAR 41pc and 24pc [respectively] above pre-pandemic levels in 2023”.

The sale comes two months since the vendor offloaded the Pacific Hotel Brisbane, for $44.8m to Gold Coast based Singh Enterprises, and nine months since the Coral Cay MacKay was offloaded, to a local investor, for over $11m.

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Marc Pallisco

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