Lindsay Fox and Max Beck circling Melbourne’s St Kilda Novotel, but Perth and Brisbane the short-term hotel sweet spots

Lindsay Fox and Max Beck circling Melbourne’s St Kilda Novotel, but Perth and Brisbane the short-term hotel sweet spots
Lindsay Fox and Max Beck circling Melbourne’s St Kilda Novotel, but Perth and Brisbane the short-term hotel sweet spots

Novotel-St-Kilda-420x0

Property tycoons Lindsay Fox and Max Beck are among those reported showing interest in the prized Novotel Melbourne St Kilda overlooking Port Phillip Bay, which has been marketed both locally and to international investors.

The hotel was listed for sale in June by Tourism Asset Holdings Limited (TAHL) with market observers expecting a price between $55 million and $60 million.

An international marketing campaign has been handled by Wayne Bunz and Mark Wizel of CBRE Hotels with expressions of interest closing yesterday.

The recently refurbished hotel, which has 211 rooms over six levels on a 5,791 square-metre site boasting 270-degree views of Port Phillip Bay, has reportedly caught the eye of Fox and Beck. Fox owns the nearby Luna Park.

The pair has undertaken a number of joint ventures together including Essendon airport and a retail project in the Melbourne suburbs, the Australian Financial Review reported.

Other buyers believed to be circling the Novotel, include Stewart Baron’s private development company Baron Corporation, as well as  local Asian investors and offshore Asian investors from Singapore Malaysia and Hong Kong.

Overseas investors identified as possible bidders include Singapore hotel magnate Michael Kum and Singapore-listed developer Chip Eng Seng Corporation.

The strong interest shown in the Novotel comes as a new report from hotel researchers STR Global was released this week, favouring the Brisbane and Perth hotel markets in the short term, but revealing very little new hotel stock set to be added to either the Sydney or Melbourne hotel markets in the next four years, keeping vacancy rates tight.

Th report revealed that Melbourne has a development pipelines comprising just 2% of total room stock with only Sydney having a smaller development pipeline of the major capital cities of 1.7%.

According to STR Global Melbourne had a 1.5% rise in occupancy to 76.9% and 0.5% growth in room rates to $176 over the past year.

In the Sydney CBD market, the occupancy rate fell to 84.2% while room rate growth was 2.4%.

The research compiled by STR Global indicates that there will be strong growth in Perth and Brisbane hotel room rates and occupancy levels over the next year driven by demand from the resources sector.

However, these markets could weaken in the medium term due to a strong pipeline of new hotel stock.

The hotel occupancy rate in Perth climbed 3.8% to 85.3% over the year while the average daily room rate rose 12.8% to $218, reported STR Global.

However, Perth will see an extra 881 new hotel rooms added to its existing stock over the next two to four years – around 9% of total room stock.

The Brisbane hotel daily room rate increased by 4% over the year to $185, while occupancy levels rose 1.1% to 79.1%.

Brisbane has an even bigger supply pipeline than Perth with an additional 1,300 rooms added – 11% of total room stock – over the next two to four years.

The latest Roy Morgan Research Holiday Tracking Survey for the May quarter found an increasing number of Australian plan to take a holiday over the next 12 months, but no increase in the percentage who will holiday at home.

According to Roy Morgan 68% of Australians (12.8 million) intend to take a holiday over the next year, up from 67% for the May 2011

However, only 55% will take their holiday in Australia, unchanged from last year but down from 57% in May 2007.

The percentage of Australians intending to go overseas for their next holiday is steady at 9% when compared to same period last year, although this has been slightly increasing over the past five years.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?