Kuwait company plans for $69 million Melbourne hotel
Kuwait-based Action Hotels, an owner, developer and asset-manager of branded hotels in the Middle East and Australia, has signed a deal that will see it building a $69 million four-star hotel at Melbourne Convention and Exhibition Centre.
The hotel, which is expected to open in the first quarter of 2018, will comprise 317 rooms and 14 apartments.
According an Action Hotels statement, that would make it the second largest property in its portfolio.
The deal is for a 92 year lease on the land at the Convention and Exhibition Centre.
Action, which is listed on the London Stock Exchange, is no stranger to Australia. This will be its fourth property in Australia and third in Melbourne.
The announcement of the deal follows the opening of Action’s Ibis Styles Elizabeth Street hotel in Brisbane in March.
Action said it would fund partially through debt for the project and partially through existing resources.
The new hotel will be ideally located.
The Melbourne Convention and Exhibition Centre, which has a pillarless floor space of 30,000 square metres, is the largest convention centre in the southern hemisphere.
It accommodates more than 5500 delegates and hosts everything from meetings, conventions and exhibitions, to concerts, tradeshows and gala dinners.
According to a report from JLL, the venue last year hosted 1030 events with more than 680,000 attendees.
Action said hotel demand in Melbourne outperforms supply.
However, most of Melbourne’s hotel accommodation in the city is upscale or above. Upscale and upper upscale hotels make up 62 per cent of the current supply.
Action says this creates a gap in the market for its own brand of midscale accommodation.
In the statement, Sheikh Mubarak Al Sabah, founder and Chairman of Action Hotels, said: “The hotel is ideally positioned in an attractive market with extremely positive fundamentals and rising demand, in a location that is currently underserved by midscale hotels.”
by Leon Gettler, October 24th 2016
