Worldwide Hotels Group subsidiary Legend Land Melbourne has bought the Novotel & ibis Melbourne Central Hotel for $170 million, marking the largest Melbourne hotel sale in more than six years.
Well Smart Investment Holdings sold the 472-room hotel amid growing investor confidence in Australia’s hotel sector outlook.
The Novotel & ibis Melbourne Central Hotel was built in 2018 as Australia’s first dual-branded high-rise hotel, comprising a 259 lower-level ibis room component and a 213 Novotel room component.
The hotel featured two restaurants, a bar, conference and meeting spaces, recreation facilities and undercover car parking.
The transaction follows some major hotel deals across the country this year, most recently the sale of the Sheraton Grand Mirage Resort on the Gold Coast for $192 million last month.
Singapore-listed City Developments Limited (CDL) bought the 5-star Sofitel Brisbane Central hotel in Brisbane from Brookfield Asset Management for $177.7 million last March, while Lendlease and Mitsubishi Estate Asia exchanged contracts with Fiveight for the sale and delivery of the Waldorf Astoria Sydney Hotel project in Sydney.
CBRE Hotels brokered the Novotel & ibis Melbourne Central Hotel sale. The property was initially taken to the market last year before an off-market deal was secured with the subsidiary of Singapore-based Worldwide Hotels Group.
CBRE Hotels’ National Director Wayne Bunz said the latest Melbourne deal evidenced the confidence international capital sources had in Australia’s hotel market, given its safe-haven status and ability to provide a strong inflationary hedge.
“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 growth rate in the year to April 2023, growing by 54% 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.”
The deal was part of Well Smart’s capital recycling strategy, which had already seen them acquire Lindeman Island in Queensland.
Simultaneously, Worldwide Hotels Group announced its agreement to acquire the PARKROYAL on Kitchener Road, Singapore, for a total consideration of US$388 million, the largest ever single-asset Singapore hotel transaction.
Novotel & ibis Melbourne Central Hotel
