Consolidated hotel focus
18 January 2011,
CONSOLIDATED Properties Group (CPG) is embarking on a concerted drive into the hotel market with the launch of a new management arm.
Consolidated Hotel Group (CHG) has been established to internalise the company’s previously outsourced hotel management operations and to provide a new hotel aggregation vehicle.
It will also undertake a bullish acquisition drive that will see its freehold hotel portfolio treble to around $150 million in the next 12 months.
CPG managing director Don O’Rorke, says the group is ‘looking at’ Melbas on the Park in Surfers Paradise’ but affirmed that it was too early to speculate on a deal. He says the Australian hotel industry is in a reconsolidation phase following the break-up of several major hotel portfolios created before the global financial crisis. CHG will target Queensland and NSW with the ink set to dry on the first acquisition by next Easter.
“Most of these hotel groups, including some that were listed, have gone bust and the properties are now being bought by new owners and operators at much lower prices,” says O’Rorke.
“We think there are some excellent buying opportunities out there at the moment and we are very keen to participate in the new industry consolidation that’s now underway.
“Consolidated Hotel Group has been set up, funded and staffed to allow us to go after those opportunities and take a more aggressive position in the market as both a hotel buyer and operator.“
CPG owns five hotels in Queensland and northern NSW — the Surfers Rowers bar and restaurant at Surfers Paradise, the Boardwalk Tavern at Hope Island, the Links Restaurant and Bar at Hope Island, the Australian Hotel at Murgon and the Sandbar + Grill at Casuarina Beach in northern NSW.
Management of CPG’s hotels was previously contracted to the independently owned Pub Group but will now be managed by CHG.
Pub Group will continue to own and operate two other hotels not connected to CPG, The Beach at Cabarita and The Cove at Burleigh.
O’Rorke says CPG has achieved its revenue targets for 2009 well ahead of schedule and is viewing the current property market and financial environment as the ideal opportunity to set its work pipeline for the next five years and beyond.
Since the company’s re-launch earlier this year after being bought back from its former listed parent Trinity Group, CPG has successfully rolled over all its debt and posted more than $25 million in property settlements comprising more than 500 individual sales.
The sales comprise 90 freehold marina berths priced from $120,000 at CPG’s Hope Island Resort marina and 416 equity memberships in the newly privatised Links Hope Island golf club at an average $30,000 per membership.
Assets include the 26ha Casuarina Town Centre site in northern NSW and landholdings at Hope Island Resort on the northern Gold Coast, which include a golf course housing subdivision, apartment and boutique hotel sites.