The Adina Hotel and Melbourne's oldest pub, the Duke of Wellington in Melbourne’s East End have sold for a combined $92 million – marking the end of a 40-year era for the CBD landmarks.
The Duke of Wellington, along with a nine-storey office tower on the same block, sold for $53.5 million, reflecting a sharp yield of 3.45 per cent.
The Adina Hotel at 88 Flinders Street and the Duke of Wellington at 2 Russell Street were purchased by separate buyers, with each asset reflecting new pricing benchmarks for their respective sectors.
The combined properties were tipped to sell for above $80 million, with the final price well exceeding these expectations.
Both properties were developed by the late Andor Schwartz and have been held by the Schwartz family for 40 years. The Schwartz family have long had significant interests in the development, finance and publishing industries.
[Related reading: Schwartz Family List $80 Million Portfolio Including Melbourne’s Oldest Pub]The vendors were the late Andor and Margit Schwartz's three sons: Morry Schwartz, the founder of developer Pan Urban and publisher Schwartz Media, developer Danny Schwartz and Qualitas director Alan Schwartz.
The Adina, which comprises a 65-room hotel, was purchased by a major investor, who outbid a number of Asian-based hoteliers and interstate investors. It is leased to Toga Far East hotels until 2021.
The second asset, the heritage listed Duke of Wellington pub and office building, sold for a record yield of 4.03 per cent to a private family, with Charter Keck Cramer acting on their behalf.
“We were absolutely delighted with the final result achieved on both properties, " Morry Schwartz said.
“There is clearly a window for generational property owners to consider offloading their assets whilst the market is showing some very strong signs.”
The assets were offered via an international expressions of interest campaign undertaken by CBRE Melbourne Middle Markets’ Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai, in partnership with CBRE Hotels’ Rob Cross and Scott Callow.
“Top quality real estate always unearths new capital that may have been dormant for several years – as evidenced by this sale result. The Asian buyer market in particular continues to defy the odds, with a number of groups coming forward with strong offers to acquire these iconic pieces of Melbourne real estate," CBRE's Mark Wizel said.
[Related reading: Historic Fitzroy Pub Expected to Sell for $20 Million]There has been a strong run in the Australian hotel and hospitality sector with high demand for quality assets reflecting high prices being achieved especially in Melbourne and Sydney.
Sydney "bar tsar" Justin Hemmes and his Merivale Group have been on a buying spree across Sydney securing a number of quality hotel venues including Woollahra's Hotel Centennial, the Collaroy Hotel and the Royal Hotel at Bondi.