The Rydges Tradewinds Cairns has been sold for $34 million to GA Group Australia amid continued strong interest in northern Queensland hotel investment opportunities.
The Rydges Tradewinds features 246 hotel rooms and is located on a substantial 8,138sqm site along the Cairns Esplanade.
The off market sale was negotiated by CBRE Hotels National Director, Wayne Bunz and CBRE Cairns Managing Director, Danny Betros. It is the first hotel acquisition for GA Group Australia.
A spokesman for GA Group, Mark Davie, said GA Group was looking to undertake a substantial refurbishment of the hotel to create a 5/6 star offering for the Cairns market.
This would in turn create substantial local employment opportunities and invest significant capital expenditure into the local economy.
Mr Davie added that recent Smith Travel Research (STR) statistics highlighting the strength of the Australian tourism sector had underpinned the group’s interest in Cairns. STR results for the 12 months to January 2016 show that hotel occupancy rates in Cairns increased by 8.6% to 74.7%, whilst rates increased by 5.9% to $125.87.
This resulted in double digit growth in RevPAR, which increased by 15.1% over the same period.
Mr Bunz attributed the resurgence to a “rediscovery of the reef’, with the region receiving worldwide publicity from David Attenborough’s new Great Barrier Reef documentary series.
The international source markets of Singapore, China and the USA have registered the strongest growth in visitor numbers year to date, increasing 32%, 10% and 7% respectively,” Mr Bunz said.
CBRE’s Mr Betros added that the sale was another positive for the Cairns region, which was benefitting from strong ongoing investment.
“We are very pleased to have secured new capital that is not only looking to acquire the hotel but is also seeking to substantially invest in the Cairns tourism sector,” Mr Betros said.
The hotel was sold by Abacus Funds Management as part of an ongoing asset sell down, with the net proceeds to be applied to the repayment of debt obligations.
The fund has two hotel assets remaining, Rydges Esplanade in Cairns and Novotel Twin Waters on the Sunshine Coast.
Mr Bunz said the strong sale result for Rydges Tradewinds boded well for the upcoming sale of the Novotel Oasis Cairns Resort.
“The Cairns’ market has witnessed record hotel transactions in the past 18 months and with limited to no new supply of new hotels in Cairns in the immediate future, the asset’s sale is expected to attract strong interest,” Mr Bunz said.
Mr Bunz and Mr Betros will be launching the marketing campaign for the Novotel Oasis in the first week of April. The Novotel Resort is a 314 room hotel on one of the largest sites in the Cairns CBD, totaling 1.23 hectares.
“The resort is strategically positioned to capitalise on Cairns’ thriving tourism industry with increased air capacity into the region and the declining Australian dollar driving record growth in domestic and international holidaymaker arrivals,” Mr Bunz said.