Landmark hotel in $25m sale

Landmark Geelong hotel the Mercure is on the market, with a price expected to reach around $25 million.
Kildair Hotels Group has moved to sell the Mercure Hotel amid strong ongoing demand for hospitality investment opportunities.
CBRE Hotels’ Rob Cross and Scott Callow will steer the expressions of interest campaign for the prominent venue, expected to attract significant interest from private investors and owner operators.
“Last year, a record $2.6 billion in Australian hotels changed hands and this momentum has carried into 2016,” Mr Cross said.
“One of the ongoing constraints has been the lack of purchasable stock and, with high levels of competition pushing up already high prices in Sydney and Melbourne investors are increasingly focused on opportunities in regional areas.”
Opened in 1971, the four-star hotel has 138 guest rooms and suites, a restaurant and bar, various meeting and function rooms, an outdoor pool and spa, gymnasium and 24-hour reception.
A consistently strong performer, the hotel is situated on a 5991 square metre site on the city edge.
Mr Cross said the large site size allowed for future development, subject to the relevant planning approvals.
Mr Callow said Geelong was home to numerous government departments such as the Transport Accident Commission, WorkSafe, Health and Community Services and the National Disability Insurance Agency.
“As such, Geelong is a busy centre for a significant workforce, which underpins business visitation,” Mr Callow said.
“The popularity of Geelong for government and corporate activity is matched by a year round sports and events calendar, helping to underpin the Mercure Hotel’s strong trading performance.”
He said owner operators were expected to show particularly strong interest as the existing management agreement with Accor expired mid next year.
“The ability to achieve vacant possession will be particularly appealing to owner operators, many of whom are looking to expand their networks given the continued improvements forecast for the Australian hotel sector,” Mr Cross said.
Appetite for domestic travel would remain firm and the higher dollar would not discourage overseas visitors, according to CBRE’s Q1Australia Hotels MarketView report.