By Andrew Starke
The ALE Property Group has put seven hotels in Queensland and Victoria up for auction in its latest, and possibly last, tranche of sales.
Two auctions will take place – one in February and the other in March – and these follow the October 2009 auction of six ALE hotels in Melbourne, Adelaide and Brisbane, which were sold under the hammer for a combined total of close to $37 million.
CBRE Hotels and Burgess Rawson have been appointed to steer the sales process, which involves hotels leased to Australian Leisure & Hospitality Group (ALH), which is 75 percent owned by Woolworths.
The auction will involve three Brisbane properties – Stones Corner Hotel, Stones Corner; Royal Exchange Hotel, Toowong; Oxford 152 Hotel, Bulimba – and four Melbourne properties – Royal Hotel, Essendon; Mountain View Hotel, Glen Waverley; Westmeadows Tavern, Westmeadows; and Eltham Hotel, Eltham.
Expected prices for the individual hotels range from $4.5 million to $11 million.
The hotels will be offered for sale individually at two auctions, with the Melbourne properties to be auctioned on February 24 at Crown Casino and the Brisbane hotels to be auctioned on March 3 at the Brisbane Polo Club.
The auction will be steered by Craig Harley, Scott Callow and Joel Fisher, of CBRE Hotels, in conjunction with Raoul Holderhead, Billy Holderhead, Pat Kelly and Dean Venturato of Burgess Rawson.
Harley said the overwhelming investor response to the previous ALE portfolio sales had set a strong precedent for the upcoming auctions.
“In the current environment we are fielding strong investor demand for well positioned commercial properties with strong investment fundamentals,” he said.
“In this instance, investors are being given the opportunity to buy well established, highly successful hotels which provide long term, CPI indexed rental cash flows backed by Australia’s largest and most successful hotel operator.”
All seven properties are being sold with around 19 years remaining on leases to ALH, with options to renew.
Brisbane’s Oxford 152 Hotel is expected to attract particularly strong investor interest.