ASX-listed pub investor Hotel Property Investments has bought its first accommodation property with the acquisition of Quest Apartment Hotel in Griffith, NSW for $15.25 million.
The purchase represents a strong yield of 7.5 per cent. The long-term lease to the Quest franchisee has a remaining initial lease term of over 13 years.
HPI owns a range of pubs mainly located in Queensland and declared a portfolio valuation of its 43 properties of over $663 million as at end of December 2017.
HPI’s holdings include the Regatta Hotel, Cleveland Sands Hotel, Ferry Road Tavern, Southport and Crown Hotel in Lutwyche. It also owns specialty stores located on the pub sites.
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CBRE Hotels’ Scott Callow and Andrew Jackson were the agents for the Griffith freehold building acting on behalf of Railway Street Holdings Pty Ltd – a large regional developer, which has completed previous Quest projects.
Callow said the property generated strong buyer interest from both Australia and Asian buyers.
“This property, which is only 12-months old, attracted strong buyer interest given its operation under Quest, Australia’s largest serviced apartment operator.”
Located in the centre of Griffith – a prominent regional business destination – the 4.5-star hotel is located on a 3,393sq m site.
Jackson said investors were increasingly becoming attracted to regional locations such a Griffith, which benefits from diverse demand drivers including business, industrial and tourism.
“With limited opportunities to enter Australia’s hotel market in major capital cities, investors are shifting their focus to regional assets as highlighted by this transaction,” Jackson said.
“Pricing and scarcity of assets in tightly held CBD markets is forcing investors to look further afield into regional locations in order to secure hotels at attractive yields.”