The Jia family’s Well Smart Investments has sold the dual branded hotel it completed four years ago after in 2017 securing a pre-commitment to AccorHotels.
At 399 Little Lonsdale Street, the Novotel and ibIs Melbourne Central is trading for $170 million to Legend Land Melbourne, a subsidiary of Worldwide Hotels Group which, like Well Smart, is Singapore based.
The off-market deal comes 15 months since an unsuccessful public marketing campaign when expectations were c$180m.
Well Smart constructed the 36 level building with 492 suites on a 1080 sqm plot it acquired for $15m in 2015.
It was used as quarantine accommodation during COVID.
399 Little Lonsdale Street
The Little Lonsdale Street property was Australia’s first dual branded high rise guesthouse.
It comprises a 259-room ibis on its lower levels, where there are also two restaurants, a bar, café, meeting spaces and recreation zones, and a 213-suite Novotel on its upper floors.
Business costs are shared with the two brands sharing kitchen, housekeeping and offices, also in the building, as is a basement car park.
Legend Land, a wealth advisor, focuses on mid-scale properties in capital cities; it holds over 40 assets in the Asia Pacific.
Earlier this week, it paid a record for a Singapore hotel – $A507m (US$388m) – for the PARKROYAL on Kitchener Road.
In 2018, meanwhile, it purchased Brisbane’s ibis Styles Hotel.
The group also controls Perth’s Holiday Inn.
Well Smart reweighs
The Novotel and Ibis Melbourne Central disposal comes three months since Well Smart purchased the Cyclone Yasi damaged Lindeman Island with plans to refurbish an ex-Club Med and reopen it as a resort (story continues below).
Its outlay – $10m – was $2m less than the vendor, China based cable TV operator White Horse, led by Australian mining executive, William Han, paid in 2012.
That investor, six years later, proposed a major hospitality-based redevelopment, but couldn’t obtain a permit.
A subsequent sale, last November, worth $20m to Shaun and Samantha’s Juniper Group, also fell through.
Melbourne a safe haven: agents
The result, he added, is the priciest for a hotel in six years.
“We have strong confidence in the Melbourne hotel market and its rapid recovery, given it is Australia’s most populated city and the nation’s events capital, which has consistently demonstrated its ability to absorb new supply,” according to the executive.
“The market benefits from robust corporate visitation and tourist demand and boast’s the country’s best cultural and sports events calendar.
“Importantly, this recovery highlights the strong absorption of the 10 hotels that have come online since the start of 2022 in Melbourne, largely supported by a continued recovery in domestic and international tourism”.
Three were listed last month by by Sam Arnaout’s Iris Capital including the ibis Melbourne, in the CBD, on Therry St, which carries a $100m guide, and smaller assets at Fawkner and Dandenong, combined expected to achieve c$30m.
JLL’s Peter Harper, Nick MacFie and Simon Quinn are on that campaign.
“While the city’s elevated, high-quality supply pipeline dampened investment levels over 2021 and 2022, Melbourne is now showing its ability to absorb this new room supply, which is expected to underpin growing investor interest in the market as the year progresses,” Mr Bunz said.
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