Jonathan Hallinan sells Melbourne hotel
Jonathan Hallinan, whose BMP Corp has built trendy inner-city apartments in Melbourne and Brisbane, is stepping away from apartment building.
His focus now is on hotels. And it’s been a good business decision.
The BRW Rich lister has made $91.3 million selling a new Melbourne CBD hotel off the plan to Indian billionaires Kapil and Rahul Bhatia.
BMP exited the high-rise apartment market in January. At the time, it cited the disappearance of foreign buyers.
And then in May, Hallinan announced he would return to the apartment market next yearand do it through smaller-scale developments.
So instead of apartments, he is in the meantime focusing on developing hotels.
And two of them – both in the Melbourne CBD – have been offered for sale off the plan.
One of the hotels, located at 33 King Street near Southern Cross Station, has been acquired by Indian giant InterGlobe founded and led by the Bhatias.
The deal will see the 241-room 30-level hotel on the corner of Flinders Lane and King Street being developed by BPM for InterGlobe.
the proposed hotel - image supplied
InterGlobe was founded by father and son aviation tycoons Kapil and Rahul Bhatia. According to Forbes, they are worth a combined $US$3.8 billion ($A5.2 billion). They also co-founded India's biggest airline IndiGo, which is owned by InterGlobe.
InterGlobe has a real estate investment portfolio which includes 16 ibis hotels across India, with another seven in development, as well as investments in commercial real estate, technology and travel commerce.
"Given the risks associated with developing in the current lending environment, BPM sought a unique fund-through arrangement to remove any reliance on local financiers," Mr Hallinan told the Australian Financial Review.
InterGlobe plans to fund the delivery of the hotel in instalments.
Maxcon is expected to commence construction in the third quarter of 2018.
Mr Hallinan and fellow Rich Lister John Knowles are also offering a 130-room hotel on Exploration Lane, a block from Victoria's State Library. Expectations for that are around $50 million.
Leon Gettler - 16th August 2018
