The freehold interest in Mount Martha’s The Dava Hotel has changed hands, following a sales campaign by Stronebridge and Wilson Property that attracted 18 offers and culminated in a $15.7m sale.
Situated on the Mornington Peninsula, the sale of the beachfront hotel reflected a yield of 2.7 per cent, an outcome which agents described as exceeding the expected selling range. Being the first time that The Dava Hotel has been offered to market in almost 30 years, Stonebridge partner Rorey James said the market resonated with the fundamentals of the asset which is a blue-chip investment with strong underlying land value.
“We are in a cash rate sensitive market, particularly for assets in excess of $10m that typically require significant debt to purchase. To receive such extensive bidding depth, from a range of buyer profiles, was a terrific outcome.
“Furthermore, to have six offers reflect a yield sharper than three per cent speaks volumes of the markets medium-long term confidence in the retail and hotel sector, particularly given the 12+ years of tenure remaining on the lease.”
Following a string of Mornington Peninsula hotel transactions, including the acquisition of the Rye Hotel by Endeavor Group for approximately $50m, James explained that the 18 tenders received represent over $200m in active private capital looking for similar style assets in Victoria.
Speaking about the interest that was received at a local, interstate and international level, Stonebridge’s Asia practice partner Kevin Tong commented on overseas interest in the land.
“44 per cent of the bids received were from Asian-based investors/land bankers, based locally and offshore. We also received bids from investors backed by Indonesian, Chinese and Singaporean capital which further highlights the confidence this buyer profile has in the Mornington Peninsula market.
“A common theme among the private Asian investors was that there was less of a reliance on yield and a more aggressive weighting towards underlying land and their ability to pass down the asset through to their children in the future.”