Travelodge hotel portfolio sells for $620M
The Salter Brothers have spent a record $620 million on the purchase of the Travelodge hotel portfolio from Mirvac and the NRMA.
On Friday the Melbourne-based fund managers exchanged contracts to acquire the 11 Travelodge hotels and over 2000 rooms.
The acquisition is part of a new joint venture with two of the world’s biggest real estate investors: Singaporean sovereign wealth fund GIC and Swiss-based global private equity firm Partners Group.
Paul Salter, managing director at Salter Brothers admitted it was a “big play” telling AFR Weekend, “We have done a lot of work on a domestic-only market with no international visitors coming in, and the view is that we have more than enough demand in Australia to support operating back at pre-COVID levels.”
The Travelodge portfolio contains several flagship properties including Martin Place and Wynyard in the Sydney central business district, on Wentworth Avenue in Surry Hills and the Travelodge Southbank in Melbourne.
Prior to the acquisition, the biggest since Salter Brothers paid $500 million for the Eureka portfolio in 2017, managed approximately $2 billion of assets including hotels such as the InterContinental Melbourne.
There were 18 bidders for the Travelodge portfolio, which sold for $100 million over its 2020 book value, highlighting the resurgence in the commercial property sector in Australia.
Settlement requires Foreign Investment Review Board approval and is expected to happen closer to the end of the year.
The hotels will all be refurbished and a new operator will be sought.
“We’re hoping that post-refurbishment and COVID, we can do in excess of the [pre-pandemic] numbers,” Mr Salter said.
Seven out of the eleven hotels are in Sydney with Mr Salter saying it historically had a strong market and would recover after this latest lockdown.
Irit Jackson, 26th July 2021
