By Andy Young
The Metropolitan Hotel on William Street in Melbourne is on the market and is expected to cost around $7 million.
The hotel, which is the first city hotel to be put on the market this year, is located close to Melbourne’s legal district and is popular with people working in the precinct.
The historic hotel was established in the mid 1800’s and occupies a prime corner location at 263-265 William Street on the corner of Little Lonsdale Street opposite the Mint and on the doorstep of all of the city’s major courthouses.
The Metropolitan is being sold through CBRE and director Josh Rutman said the sale provided a rare opportunity to acquire a prime freehold hotel in the Melbourne CBD in an area set to benefit from the ongoing expansion of the city’s north western pocket.
“Pubs tend to occupy high profile corner positions, which make them particularly attractive to investors,” Rutman said.
“It’s very difficult to find sub $10 million freeholds on the main streets of the Melbourne CBD, with only a handful selling in the past five years.”
The Metropolitan Hotel includes a popular café style bar and dining area at ground level with a guest seating area of approximately 120 people. It has an elevated dining area at the rear which is serviced by a commercial kitchen with pizza oven. The first floor includes a large function space with the property also benefitting from a cellar area with a keg room and office space.
With the hotel leased until 2020, Rutman said the auction was expected to attract interest from both investors and owner occupiers, locally and from offshore, looking to leverage from the property’s irreplaceable corner position within the legal precinct of the CBD.
“The property has a very strategic triple street frontage which will provide ultimate flexibility to the future purchaser once the current lease expires. Many prospective purchasers have indicated that they would look to cut the property into smaller ground floor retail shops and explore the opportunity of constructing additional floors or a rooftop dining area,” Rutman added.
The hotel also benefits from a rare liquor licence, which allows the operator to trade seven days a week 24 hours a day.
“Liquor licences such as these are no longer issued to hotels making this a very valuable commodity and allowing the operator tremendous flexibility on how and when they choose to operate the business,” CBRE’s Scott Callow said.