Sofitel Brisbane Central fetches $178m
Brookfield has sold Sofitel Brisbane Central on its second attempt.
The 5-star hotel is trading to a 50:50 partnership comprising Millennium & Copthorne Hotels Limited – a subsidiary of Singapore’s City Developments Limited, chaired by Kwek Leng Beng and 49 per cent controlled by his late father’s Hong Leong Group – and its New Zealand listed arm, Millennium & Copthorne Hotels.
The $177.7 million price values each of the (416) rooms at $427,000.
Toronto based Brookfield acquired the asset as part of its takeover of Thakral Holdings in 2012 – worth $410m, it included four other Australian hotels.
It unsuccessfully tried to divest it the year later for c$220m.
The deal comes three days since the Karim family’s Invictus Developments acquired the Quest Woolloongabba from Pellicano Group for $43.8m.
Yesterday, meanwhile, we reported Salter Brothers was in due diligence to acquire the 18 month old Sofitel Adelaide from Daniel Palumba for c$150m.
Sofitel Brisbane Central
On 7432 square metres at 249 Turbot Street, abutting Central Station, the 30 storey Brisbane Hotel was developed in 1984 and for years operated as a Sheraton.
It holds the city’s largest hotel event and meeting facility, with nine rooms able to accommodate up to a total of 1100 people, a gym, pool, restaurant and three retail tenancies.
Thirty seven of the guest rooms are suites.
Brookfield offered the property with optional vacant possession.
Instead, the incoming owners have committed Accor to continue running it as a Sofitel.
Settlement is scheduled in the second half of the year.
Elsewhere in the city, CDL five years ago completed South Brisbane’s Ivy & Even residential complex with 472 apartments.
It also controls the Treetops at Kenmore townhouse site – 11 kilometres south west of town.
In Melbourne the group is behind two residential projects, Fitzroy Fitzroy at 421 Smith St, Fitzroy, and The Marker, at 94 Stanley St, West Melbourne (story continues below).
The company’s REIT, meanwhile, holds the Mercure Perth and Ibis Perth.
“The proposed [Sofitel Brisbane Central] marks the group’s entry into Brisbane’s hospitality sector,” CDL executive chairman, Mr Beng, said.
“Brisbane is amongst the key hospitality markets in Australia that has enjoyed the strongest RevPAR [Revenue per available room] recovering in 2022, significantly exceeding pre-pandemic levels,” he added.
“Brisbane’s pipeline of over $20 billion in infrastructure projects will further enhance the city’s position as a world class sporting, tourism and business events destination,” according to the executive.
“With Brisbane being the host city for the 2032 Olympic and Paralympic Games and the Rugby World Cup in Australia in 2027 and 2029, the acquisition presents an attractive opportunity for the group to enlarge our presence in Australia and enhance our recurring income stream”.
Millennium & Copthorne Hotels controls 38,000 rooms in over 130 hotels in 18 countries.
Another Brisbane hotel sale
CBRE Hotels’ Michael Simpson, Tom Gibson and Wayne Bunz with McVay Real Estate’s Sam McVay and Dan McVay listed the Sofitel Brisbane Central in October.
Their sale is the city’s biggest single asset hotel deal by value – pipping the $150m Salter Brothers paid Challenger in 2019 for the nearby NEXT hotel (which also included a 2000 sqm shopping centre facing the Queen Street Mall).
“The sale of Sofitel Brisbane Central speaks to the renewed focus of both domestic and offshore investors for high quality assets that can tape into South East Queensland’s growth story in the lead up to the 2032 Olympics,” Mr McVay said.
“The sale process…created wide ranging buyer interest with 11 offers received from a mixture of private and institutional capital including a substantial level of offshore interest,” he added.
“There remains a very strong interest in the hotel capital markets for high quality, well located assets,” according to the executive.
“As Brisbane’s largest single-branded hotel, the scale of Sofitel Central Brisbane and the ability for vacant possession provided buyers with the opportunity to capitalise on this South East Queensland growth story”.
The deal comes 18 months since Bill and Mario Gravanis’ Oscars Hotels paid Mapletree Investments c$50m for the Oakwood Hotel, beside the city’s Story Bridge.
In 2020, meanwhile, Syrian born Brussels-based Ghassan Aboud picked up the Fantauzo Hotel, since rebranded the Crystalbrook Vincent Brisbane, from the Deague family, for $75m, while Singapore’s Amaro Holdings spent $67.9m for the 296-room Novotel Brisbane, in South Bank.
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