Toga Group buys Kurt Braune’s Leisure Inn in Hobart on 9% yield
The Toga Group has acquired the Leisure Inn Hobart Macquarie for $13.65 million possession in a joint venture with a private equity partner with plans to re-brand it as a Travelodge Hotel.
The hotel at 167 Macquarie Street formed part of the collapsed Bluechip Properties Australia Pty Ltd group headed by high-profile Sydney property mogul Kurt Braune.
RP Data records show Bluechip acquired the hotel for $3.75 million in September 2004, spending $6 million refurbishing it between 2006 and 2010.
Bluechip was placed in the hands of receivers Korda Mentha in October last year after running into debt obligation difficulties with Bankwest the major creditor.
Other hotels in the Bluechip group include Woolmers Inn and the Waterfront Lodge in Hobart and Launceston's Penny Royal.
The hotel, built in 1968, had been listed for sale last year with price expectation in excess of $16 million, The Mercury reported in October last year.
The investor report notes that it is as “short stroll” from Battery Point, Salamanca Place and Hobart waterfront restaurant and bars.
The sale price represents an initial yield, after management fees, of 9.55% with the hotel forecast to bring in annual net income of $1.3 million in 2013.
For the year to July 2012 its earnings before interest, tax and depreciation were $1.37 million with revenue per available room of $74.
It was sold as vacant possession with an average daily rate of $107 and an occupancy rate of 73%.
It had been managed by Staywell Leisure under an agreement which was due to expire in November 2013, but with the option to acquire as vacant possession.
The hotel features 131 rooms and has an AAA rating of 3.5 stars. It includes two restaurants, a bar and parking for 38 vehicles, 14 of these spaces leased from an adjoining property.
The sale was negotiated by Rob Cross, Andrew Jackson and Scott Callow from CBRE Hotels, who said the likely intention of the purchase was to install a Travelodge branding and management agreement.
According to the investor report prepared by CBRE, Tasmania’s hotel market has remained stable in terms of supply levels, with the total number of available rooms at 2,327 available per night.
From December 2006 to December 2011, the total number of available rooms has risen by only 1.7% percent.
"A buoyant occupancy rate growth figure was experienced in the 12 months to March 2012 in the Hobart Tourism Region, with occupancy at 74.3% Average room rate saw a 4.2% increase in comparison to the 12 months prior, to $133.14," says the report.
Toga Group's hospitality management division comprises Adina Aparment Hotels, Medina Serviced Apartments, Vibe Hotels and Travelodge Hotels.
Last month Toga Hotels and the NRMA acquired Labor Party favourite, the Art Deco-inspired Hotel Kurrajong in Canberra’s Parliamentary precinct for $7.65 million at auction.
