NOVOTEL SALE REFLECTS HOT BUYERS' MARKET
Written on the 7 December 2016 by Paris Faint
AFTER two decades in the hands of a private syndicate, The Novotel Melbourne Glen Waverley has been sold to the Sydney-based iProsperity Group for $73.6 million.
Colliers International's Gus Moors, Neil Scanlan and Guy Wells finalised the deal with the Asian offshore investment advisory firm, following an expression-of-interest campaign and negotiations.
Moors says the sale reflects increased buyer activity in the Melbourne hotel market within the past year.
"Capital flows have continued to move from Sydney towards Melbourne during 2016," he says.
"While the Sydney market witnessed significantly more transactional activity over 2014/15, Melbourne has had a strong finish to 2016."
The Novotel property, located on Springvale Road, is subject to a triple net lease to Accor Asia Pacific until July of 2018.
According to the Colliers sales team, this was the major calling card of its value.
"The unique offering of a limited fixed-lease term with vacant possession thereafter resulted in strong interest from owner-operators and investors having existing relationships with hotel management companies," said Moors.
"Traditionally hotels operate under management agreements whereby returns to an owner vary depending on performance of the asset.
"The near term vacant possession allows the incoming purchaser the option of retaining Accor or changing the branding and/or operating entity of the hotel."
The hotel boasts 200 rooms, a restaurant and bar, meeting spaces, gym, indoor pool and underground car parking.
Colliers expects Melbourne hotel and accommodation properties will continue to be hot assets in 2017.
Author: Paris Faint