Alliance Hotel Spring Hill - Freehold Investment to Market as Investors Hunt Yield

The Freehold Investment interest in the Alliance Hotel Spring Hill has been listed for sale.

The Real Property of the Alliance Hotel is located at 320 Boundary Street Spring Hill (Lot 1 RP10335. Title Reference 16779239) and occupies a 478sqm* site.

HTL Property Qld Directors Glenn Price, Brent McCarthy and Asia Pacific Managing Director Andrew Jolliffe, along with Ray White Commercial Director John Dwyer, have been exclusively appointed to offer the Freehold Interest in the asset by way of a National Expressions of Interest campaign¹.

Located in the established Brisbane suburb of Spring Hill, the Hotel has a long-standing history in the suburb having been first constructed in 1888*. The aesthetically striking hotel was designed by architect John Beauchamp Nicholson, who also designed the Princess Theatre and the Norman Hotel at Woolloongabba.

The Alliance Hotel is currently leased to PT Hotels & Property Group Pty Ltd until 1 April 2022; with 2 x 5-year options available. (Lease Number 716432606).

The business operation trades by way of the Freehold Property’s Commercial Hotel Licence (number 198505) on terms as per the registered lease. The business operation of the hotel does not form a part of this sale.

Current rent (Investment income) for the Lease Year commencing 2 April 2019 is $194,548 excluding GST.

The Alliance Hotel is situated on a highly visible corner site with three street frontages; Boundary Street, Leichhardt Street and Keid Lane, and offers proximity to the Brisbane CBD, Brisbane’s Central Railway Station, Hospitals, International Schools and the vibrant Fortitude Valley.

The three level Victorian style hotel comprises a public bar, bistro and kitchen on the ground level, chalet bar and function room on the lower level; and a function room and Manager’s residence on the first floor.

“The value of the asset is underpinned by its near CBD location, serving to strengthen the investment opportunity. Investors traditionally seek comfort in the investment fundamentals of the suburb, with Spring Hill offering an inner-city locale enjoying close proximity to a wide range of residential, retail, commercial, education, entertainment, childcare and public transport” advised Ray White Director, John Dwyer. 

“The Freehold Investment Market for Hotels across Australia has been starved of quality assets over the last five years, with minimal transaction events occurring despite an aggressive appetite from potential purchasers due to the low interest rate and low return environment of the wider economic climate. The most recent reduction to the official cash rate to a historic low has some media outlets suggesting that the RBA has given the strongest indication that it might see the Cash Rate go to 0%². Some leading economists forecast that another rate cut is only a matter of time³. This has only served to further strengthen the demand for investment hotels, outlining the succinct differential between borrowing levels and current market yields in the sector” observed HTL Property’s Qld Director Glenn Price.

“The Brisbane Hotel market has been a strong focus for not only locally domiciled hotel investors, but also interstate candidates. As a clear indication that the sector is fast becoming a truly national sector, cross border stakeholders, who have traditionally invested in alternate sectors such as office, retail and commercial, are more frequently sourcing Hospitality, Tourism and Leisure based assets offering higher returns than other traditional investment based sectors” advised HTL Property Qld Director, Brent McCarthy.

“With cash generating docile returns in the current environment, there’s a patent flight to hard yielding assets nationally; and this hospitality indexed property sector represents a worthy tonic to astute investors” concluded HTL Property Asia Pacific Director, Andrew Jolliffe.

The Freehold Investment Interest (Real Property) of the Alliance Hotel is being sold by way of a National Expressions of Interest Campaign, concluding Wednesday, 4 March 2020¹.

^* approximately
¹ Under instructions from Receivers and Managers.
² Article by businessinsider.com.au
³ Article by The Guardian

HTL Property, 28^th January 2020