By Vanessa Cavasinni, editor Australian Hotelier
Lantern Hotel Group has sold two of its non-core hotels this month, in an effort to strengthen its overall hotel strategy. The two hotels are the GPO Hotel in Brisbane’s Fortitude Valley, and the Bowral Hotel in the Southern Highlands of New South Wales.
Both hotels were sold by CBRE Hotels on behalf of the ASX-listed pub group. The Bowral Hotel was sold most recently, for $6.35 million – above current book value – to a Sydney-based publican and industry figure who did not want to be named.
Daniel Dragicevich, who was appointed to oversee both hotel sale campaigns, stated that there was a lot of interest in the Bowral Hotel.
“The sales campaign was a success on every level attracting over 50 genuine enquiries throughout the process and 13 initial offers. The current strength of the hotel market continues to drive sales results of this quality and we expect no slowing down in the near term.
“The eventual purchaser was an existing hotelier and industry identity who was a ‘great fit’ for the asset and will significantly enhance the current offering for the benefit of the Southern Highlands region as a whole,” Dragicevich stated.
The popular Fortitude Valley freehold, GPO Hotel, was sold earlier this month for $5.25 million – a 28 per cent premium on its book value at the end of 2015. The high sale price is the result of several attractive qualities for investors in the hotel: it’s leased until 2019 with four further 10-year options, has dual street frontage, and is highly visible within the Valley Heart precinct.
CBRE Hotels director, Glenn Price, who also led the sale campaign, said that this sort of hotel purchase is becoming increasingly popular.
“The market for passive hotel investments has been particularly strong recently as investors seek the safety of long terms leases to experienced operators with strong rental growth prospects,” Price said.
Lantern Hotel Group CEO John Osborne was pleased with both sale prices, as the company continues to divest their non-core properties.