One of the region’s most active hotel investors, Salter Brothers, has exchanged contracts to acquire the Sofitel Adelaide Hotel from Palumbo Group for about $154 million.
Located at 108 Currie Street in the heart of the CBD, the 251-key hotel is the first internationally branded five-star hotel to be built in Adelaide in 30 years.
The hotel forms part of a 32-storey mixed use tower with two flexible retail tenancies included.
It’s the latest in a string of high-profile hotel deals, including Worldwide Hotels Group’s purchase of the Novotel & ibis Melbourne Central Hotel for $170 million last week.
Last month, Star Entertainment Group and its partners Chow Tai Fook Enterprises and Far East Consortium sold the Sheraton Grand Mirage Resort on the Gold Coast for $192 million, while Singapore-listed City Developments Limited (CDL) bought the 5-star Sofitel Brisbane Central hotel in Brisbane from Brookfield Asset Management for $177.7 million in March.
The acquisition will allow Salter Brothers to capitalise on the significant public and private investment that is currently being undertaken throughout the city.
“We are extremely pleased to acquire this quality institutional luxury hotel asset in one of Australia’s most robust markets,” Salter Brothers Managing Director Paul Salter said.
CBRE Hotels and Savills negotiated the sale.
CBRE Hotels Managing Director Michael Simpson said the sale of the Sofitel Adelaide represented Adelaide’s most significant single asset hotel transaction.
“The developers, who were the vendors in this transaction, literally poured their heart and soul into delivering what is arguably the best internationally branded luxury hotel in Adelaide. We are privileged to have had the opportunity to work with the vendors to negotiate this transaction. The sale of the Sofitel Adelaide has reset the benchmark for the Adelaide luxury hotel market with a record price per key achieved for a CBD asset,” Simpson said.
“We have seen considerable investment activity for the first half of 2023, with the Sofitel Adelaide sale joining a raft of other major institutional transactions we have been involved in, including the Waldorf Astoria Sydney, Novotel & Ibis Melbourne Central and the Sofitel Brisbane, which together exceed $1.2 billion.”
Savills Director Nick Lower said the Sofitel Adelaide had earned its reputation and place on the Adelaide skyline as a leading 5-star hotel product, offering unrivalled luxury and exceptional guest experiences.
“Its presence contributes to Adelaide’s allure as a premier destination, attracting domestic and international visitors alike. The extraordinary record price achieved sets a new benchmark in the Adelaide market, reflecting the property’s exceptional quality and desirability,” Lower said.
“This record-breaking transaction demonstrates the confidence in Adelaide’s hospitality sector and highlights the city’s position as a prime investment destination. The high price per key showcases the value placed on the property, emphasising its distinction in the market and the confidence now being seen in the Adelaide market.”