Rich list members’ hotel sale

Financial Review Rich Listers Jonathan Hallinan and John Knowles are looking to make $50 million with a hotel sale.

They are selling a 130-room hotel development off-the-plan in the heart of Melbourne.

According to Mr Hallinan, who runs developer BPM, the offers are already coming in.

He claims he has already received 10 offers from big hotel operators to run the proposed 34-storey hotel.

The hotel sits on a 171 square metre site on Exploration Lane, just a block from Victoria's State Library.

However, there is some flexibility in their plans.

Depending on what offers come in, Mr Hallinan says he and Mr Knowles might look at retaining the hotel as a joint-venture investment.

“I’ve known John Knowles for more than 10 years and we have worked on many projects together.” Mr Hallinan told the Australian Financial Review.

“I approached him with the idea of turning the apartment development into a hotel which we are now doing as a joint venture.

“Whether we sell or retain it, the hotel project is proceeding.”

Mr Knowles has owned the Exploration Lane site since 2010, having acquired it for $2.15 million.

Work on the site has already gone ahead with office buildings demolished to make way for the new hotel.  

The plan still requires a modification to the existing apartment permit.

Andrew Jolliffe and and Mark Bullock of Ray White Hotels are handling the sale.

Mr Jolliffe says the hotel development would be attractive for many investors.

“A number of leading international hotel management companies have already expressed an interest in managing the property, which in turn provides investors with a blank canvas to turn this opportunity into a truly unique offering,” Mr Jolliffe told the Australian Financial Review.

“As a major market gateway to Australia, the Melbourne hotel market provides an attractive destination for hotel capital supported by strong trading fundamentals.”

Leon Gettler - 13th April 2018