Mulpha Australia buys Rydges Esplanade Cairns
Rydges Esplanade Cairns has been sold to Mulpha Australia for AUD$40 million amid continued strong interest in north Queensland hotel investment opportunities.
The off-market transaction was negotiated by Wayne Bunz, National Director of CBRE Hotels, on behalf of Abacus Funds Management Limited.
Rydges Esplanade adds to Mulpha’s stable of Australian hotel and leisure assets, which includes some of Australia’s leading hotels, namely InterContinental Sydney, InterContinental Sanctuary Cove and One and Only Hayman Island.
Mulpha’s broader leisure portfolio also includes Bimbadgen Winery Estate Hunter Valley, Marritz Hotel and Salzburg Apartments in Perisher Valley and Hotel Schools in Sydney and Melbourne.
Mulpha Australia CEO, Greg Shaw, said Cairns was a “thriving Hotel market with strong prospects”.
“We are excited to invest in one of the destination’s leading hotels and look forward to an exciting period of growth,” he said.
“Mulpha continues to actively pursue Hotel investments both directly and through fund and syndicate structures and apply our specialist operational knowledge to maximize returns. We look forward to working closely with Rydges Hotels on this unique asset.”
The 4-star Rydges Esplanade Hotel comprises 242 rooms and a range of facilities, including a restaurant and bar, conference venues, a lagoon pool, gymnasium and tennis court.
Underpinning investor interest has been the strong performance of the Cairns market, which has been the leading hotel market in Australia as a result of record international and domestic travel numbers.
For the year ending July 2016, Smith Travel Research figures show average occupancy rose 6.1% to 82.0%, ADR increased 7.4% to $133.90 and RevPAR surged by 14.0% to $109.74.
CBRE Hotels National Director Wayne Bunz said the figures highlighted that investors were turning their attention to leisure offerings as a result of both the current tourism boom and the tightly held nature of the major CBD markets.
“Market conditions are leading investors to consider regional Australian accommodation assets,” Bunz said.
“In 2015, there were 53 hotel transactions across the country, with 60% of those involving assets in capital city markets and 40% related to regional properties. So far in 2016, 35% of acquisitions have been in the capital cities and 62% in regional and leisure locations indicating a shift in investor intentions,” he said.
Bunz said buyer interest had driven a tightening in regional investment yields, with Cairns properties trading on yields of between 5.88% and 9.3%.
“This is a reflection of investors’ confidence in the market and the significant growth that is being experienced in visitor numbers,” he said.
Bunz said another attraction for purchasers was the fact that hotels and resorts in regional areas were still being sold at prices substantially below replacement costs.