Newman Hotel up for sale
MLG Realty chief executive Marcus Gilmore is selling the Newman Hotel, and with industry sources saying it could fetch $20 million, the deal could set a new record for WA’s regional hotel market.
Built in the late 1960s, the renovated 204-room hotel has an occupancy rate of 80 per cent and a monthly turnover of $1.2 million.
CBRE Hotels’ Ryan McGinnity and Burgess Rawson’s Graeme Clarke have been appointed to sell the hotel after Mr Gilmore relocated to Perth.
Mr McGinnity said the sale was timely, with the State Government unveiling plans to grow the regional town and resource giant BHP Billiton announcing new projects in the area.
“Newman, like most towns, faced significant change in market dynamics following the mining slowdown,” Mr McGinnity said.
“However, the hotel is well positioned to capitalise on a new tranche of projects earmarked for the area.
“Earlier this month, BHP announced the expansion of one of its Newman mines and construction is under way on a new shopping centre next to the hotel.
“There are also several other infrastructure projects expected over the coming years, to assist in the town’s growth.”
Mr McGinnity said the hotel had moved into a primarily food and beverage-focused operation.
“The hotel has been substantially upgraded from the original hotel and is now ready to be run as a great pub and accommodation business,” he said.
“With turnover at around $1.2 million per month, the hotel maintains a strong cash flow.”
Newman has nine iron ore mines surrounding the town.
Mr Clarke said the hotel was operating at a profit, unlike many county hotels that needed significant capital works.
“The Newman Hotel Motel offers an impressive $1.25 million per annum in depreciation, making the after-tax returns exceptional for the buyer,” he said.
The hotel also has a public bar with TAB, restaurant, function room, bistro, beer garden, bottle shop, three commercial kitchens and extensive cool room and storage facilities.
Mr Gilmore, who is returning to Perth to focus on his real estate business, said the decision to sell was bittersweet but he expected the asset would attract interest from existing operators in the North West.
The property also has development potential for further accommodation and expansion of its bottle shop.
Source: The West Australian, Marissa Lague, 5th August 2015
Originally published as: Newman Hotel up for sale
