Singaporean group Well Smart Investment Holdings has disposed of its ibis Budget Melbourne CBD hotel to Capit.el Group.
The 3-star hotel is located on Elizabeth Street and offers 146 recently refurbished guest rooms, 24-hour reception and a food and beverage outlet.
The property, which has been operated by Accor Hotels under a long-term agreement, was offered as a freehold strata above four retail shops.
The sale was negotiated CBRE Hotels agents Scott Callow and Wayne Bunz.
“Melbourne has experienced some challenging economic times particularly for the hotel market and this brings about opportunities for astute buyers looking to enter the market,” Bunz said.
“While new supply is an ongoing consideration for CBD hotel markets nationally, the main focus is in the 4.5-star sector, with strong ongoing demand expected for budget accommodation.”
Callow said Melbourne’s budget accommodation industry provided the ideal steppingstone for overseas travellers and seasonal workers looking for a mid-term home.
“We have seen several hotels in the budget market close over the past 18 months which will mean that those remaining in the market will benefit greatly from a resurgence of demand with interstate and international borders open,” Callow said.
The deal comes after Well Smart sold the Mantra Terrace Hotel in Brisbane for a speculated c$16 million last year.
A Sydney-based consortium consisting of Eduard Litver of Capitel Group, Paul Fischmann of 8Hotels and investor Jonathan Hasson bought the property.
Australia’s hotel market saw an increase of 4,924 rooms across the ten major markets in 2021, with Melbourne leading the way.
According to Colliers research, the expansion of Australia’s accommodation market has continued over the past two years with the addition of more than 8,500 rooms in the ten major markets.
Melbourne saw the most significant increase, as 2,339 rooms opened in the city and 588 across the broader metropolitan area this year.