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TIGHTENING yields in the Australian hotel market has earned the owners of a boutique hotel in the heart of Melbourne more than $1 million a year in capital growth over the past 16 years.
Ricardo and Suzanne Krauskopf have sold the Alto Hotel on Bourke Street for just over $19 million, in a deal that marks just the second time the property has changed hands in the past 100 years.
The Melbourne hoteliers have owned the four-star Alto since 1999, having shelled out just under $1 million for the six-storey, 50 room hotel.
The latest sale price is pitched at a yield of 4 per cent, highlighting the continued demand for Australian hotel properties that saw $2.5 billion worth of sales recorded in the first half of this year.
The latest Melbourne sale follows settlement last month of another boutique property in Melbourne, the Pensione Hotel which sold for about $26 million, also to a Chinese buyer.
CBRE Hotels' Joseph Du Rieu, who handled the sale, says Alto was snared by a private Chinese investor before the close of the official expressions of interest campaign.
"Having been inundated by the initial response, a number of potential buyers emerged seeking similar hotel accommodation assets in the CBD with vacant possession" Du Rieu says.
"The freehold investment interest is subject to a long-term lease, with options until 2042, which ultimately saw many of the traditional hotel players decline the opportunity.
"This sale is further evidence of strengthening appetite levels for premium accommodation assets from Asian investors who consider Australia an attractive investment landscape."
Alto was opened in 2006 after the Krauskopfs transformed the former Unity Hall into a NABERS-rated hotel on a budget of about $8 million.
About three years ago, the couple sold management of the hotel to a new operator on an initial eight-year lease worth $815,000 a year.
The hotel, which has scored a host of industry awards from the likes of Qantas, Trip Advisor, RACV and Tourism Victoria, boasts average occupancy of 94 per cent.
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