Melbourne’s dual branded Ibis/Novotel hotel acquired for $170M
Melbourne is set to welcome a Singaporean property giant and its subsidiary to its accommodation market.
Worldwide Hotels Group subsidiary Legend Land Melbourne has acquired the Novotel and ibis Melbourne Central Hotel for $170 million.
The 472 room, Little Lonsdale St property is Melbourne’s first dual branded hotel.
It was built in 2018 and used to house covid patients during the Covid pandemic.
Since then, both budget savvy travellers and upper market guests have been able to enjoy the unique offering: guests can choose between budget style ibis-branded accommodation in 259 rooms on the lower floors or four-star Novotel rooms on the higher floors.
Legend purchased the property from Well Smart Investment Holdings and it is the largest hotel transaction in Melbourne in more than six years.
The Melbourne hotel features two restaurants, a bar, conference and meeting spaces, recreation facilities and undercover car parking.
CBRE Hotels national director Wayne Bunz negotiated the deal and said the purchase was a strong hedge against inflation.
“We have strong confidence in the Melbourne hotel market and its rapid recovery, given it is Australia’s most populated city and the nation’s events capital, which has consistently demonstrated its ability to absorb new supply. The market benefits from robust corporate visitation and tourist demand and boasts the country’s best cultural and sports events calendar,” Bunz said.
“The Melbourne transaction followed a strong recovery in the city’s hotel market, with Melbourne recording the country’s third highest RevPAR (revenue per available room) growth rate in the year to April 2023, growing by 54 per cent compared to the same period through 2022”.
“Importantly, this recovery highlights the strong absorption of the ten hotels that have come online since the start of 2022 in Melbourne, largely supported by a continued recovery in domestic and international tourism”.
“While the city’s elevated, high-quality supply pipeline dampened investment levels over 2021 and 2022, Melbourne is now showing its ability to absorb this new room supply, which is expected to underpin growing investor interest in the market as the year progresses.”
Worldwide Hotels Group will also acquire the Parkroyal on Kitchener Road, Singapore, for US$388 million, the largest ever single-asset Singapore hotel transaction.
Jonathan Jackson - 6-7-23
