Mantra pays record $28 million for management rights to Gurner's FV in Brisbane

Hotel and resort operator Mantra Group has paid a record $28 million for management rights for about 1,000 off the plan apartments coming up in Brisbane's Fortitude Valley.

The three-tower precinct is being built by Tim Gurner's firm Gurner and will be christened FV by Peppers, marking the entry later this year of Mantra's luxury Peppers brand in Brisbane, according to a report in The Australian Financial Review.

The FV deal was negotiated by Trudy Crooks and Tim Crooks of Resort Brokers Australia. "We can confirm the deal for the management rights to FV is the biggest ever transacted off-the-plan," she was cited as saying by the AFR.

The previous highest price secured for Queensland management rights is believed to be the $20 million paid by Mantra in 2015 to manage about 160 holiday apartments, restaurants and amenities at Surfers Paradise high-rise Soul under the Peppers brand.

Gurner said as a Peppers-branded residence, FV would offer residents the services akin to a luxury international hotel.

"Although we had a number of offers from competing international groups at higher levels, we felt the balance sheet, strength and resources behind the Peppers brand and Mantra Group business would deliver the outcome we insist on for such a large and iconic project," Gurner said.

More than 80 percent of the 970 apartment in FV have been sold to investors. Amenities include pools, private spa areas, a gymnasium, private dining and moonlight cinema areas. 

At about $28,000 per apartment, the FV deal sets a new benchmark in Brisbane management rights with previous similar deals being struck at rates of between $12,000 – $20,000 per apartment.

Resort Brokers Australia’s Crooks said having the backing of Mantra and the Peppers brand would be vital for FV apartment owners "in a competitive rental market".

FV by Peppers will be Mantra's largest property in Australia and its second largest globally, after the 1,176-room Ala Moana Hotel in Hawaii.

"FV presents us with an excellent opportunity to secure a presence of scale and quality in a prominent location and grow our permanent rental business, with potential short-term accommodation opportunities also foreseeable," said Mantra Group CEO Bob East.

In August last year, Mantra acquired the management rights to nearly 800 apartments on the Gold Coast in a deal with the Raptis Group, having pulled out of an earlier deal to manage about 1,500 apartments across seven towers developed by Metro Property Development.

Two of the FV towers are due for completion in the third quarter of the year with the third tower now under construction and due for completion in 2019.

Brisbane Lord Mayor Graham Quirk said the arrival of Mantra's Peppers brand would be "another exciting boost for the local economy".