Yeh Hotel Group purchases first Melbourne guesthouse off-market

Developed from 1998, the 10-storey building at 594-600 Little Bourke Street contains 121 hotel rooms and 40 office suites. Yeh Hotel Group has acquired 56 of the suites, as well a conference centre, restaurant and bar.

Sydney based Yeh Hotel Group has made its first Melbourne acquisition – an interest in the budget Ibis Little Bourke Street, previously known as Ibis Accor Hotel and before that, All Seasons Paragon.

The 10-level complex has been re-branded, again, to Melbourne Hotel CBD.

The off-market deal includes a conference room, restaurant, bar, meeting facilities and 56 guest suites.

Another 65 hotel rooms which form part of the Melbourne Hotel CBD are leased from third-party owners.

The complex, 594-600 Little Bourke Street, also contains 40 strata offices.

In other hospitality news today, International Hotel Group sold its Melbourne Airport Holiday Inn to developer and investor Pelligra Group on a manage-back basis.

As part of this agreement, Pelligra will undertake a major renovation of the facility.

IHC and Pelligra co-control other Melbourne hospitality assets under construction in Richmond and Werribee.

Melbourne Hotel CBD new name for 600 Little Bourke St

The Little Bourke Street complex, on a 467 sqm block, was developed about 22 years ago by a consortium including hotel investor, philanthropist and Erdigroup director, Les Erdi, who died in January, 2013.

Jeffrey Pinch – Erdigroup’s chairman, with Eric Appel and Michael Naphtali – a trio which last year reportedly banked $15.12 million selling a supermarket in Melbourne’s Scoresby – were other Ibis vendors.

JLL’s Peter Harper and Nick MacFie were the brokers.

While no sale price has yet been disclosed, assuming each suite is worth $300,000, the deal for the hotel rooms alone could be worth in the order of about $19.5 million.

Including the hospitality spaces, the price YHG is outlaying could be closer to about $25 million.

“In addition to being available with vacant possession of management, the property was considered to be an attractive entry point for the tightly held Melbourne market and have a strong location in the heart of the Western Core and Flagstaff precincts of the CBD, adjacent to Southern Cross Station,” the brokers said.

The foyer when the complex was known as Ibis Little Bourke Street. It has been re-branded Melbourne Hotel CBD following its sale to Yeh Hotel Group.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco