Landmark Brisbane Hotel on the Block

Brisbane’s five-star Sofitel hotel has been listed for sale and is expected to fetch close to $200 million as green shoots emerge across the industry.

The iconic 30-storey brutalist hotel designed by Conrad Gargett Architects was built in 1984 on the hill in the heart of Brisbane’s CBD, above Central Station.

Brookfield Asset Management acquired the hotel as part of a $410-million takeover of Thakral Holdings in 2012.

It listed the property at 249 Turbot Street for sale the following year but it did not transact, despite reports of two hotel groups looking at the property and price expectations north of $200 million.

But it could be a good time for the alternative asset manager to recycle the asset as more international capital looks to deploy Asia-Pacific allocations in Australian markets.

The Urban Developer understands Brookfield is looking to deploy more capital into the Sydney, Melbourne and Perth hotel markets as international travel ramps up again.

McVay Real Estate and CBRE have been engaged as the marketing agents for the blue-chip property and will execute an international expressions of interest campaign that will close mid-November. 

Sofitel hotelBrisbane Hotel on the Block 1″>
▲ The landmark Sofitel Hotel is on the block and could be sold as vacant possession.

The 416-key hotel could be sold as vacant possession, which casts doubt on Accor’s tenure at the property.

The 7432sq m site also included the city’s largest hotel conferencing facilities, gym, pool, day spa, and food and drink offerings.

The property is being marketed as a refurbishment or repositioning investment.

The Urban Developer understands the concurrent leasehold term is 99 years from May 25, 2021, expiring in 2120.

Meanwhile, CBRE research has shown that an an uptick in arrivals has corresponded with a decline in the Hospitality Job Advertisement Index, which fell by 60 per cent in the three months to July 2022.

CBRE’s head of hotels research, Ally McDade, said Covid-19 and international border closures had fuelled the worker shortage, and led to many hospitality workers leaving the sector.

The critical problem Australia faced was competition with developed countries around the world for the same skills and capabilities, McDade said.

“Australia has not been a destination of choice because of travel times, the cost of living and the fact that most visa opportunities are short-term.

“The hope is that policies adopted from the federal government’s Jobs and Skills Summit will support turning this around by increasing the skilled-labour cap and providing extra resources to reduce visa processing times.”

McDade said many operators were also thinking outside the box to shore up their supply of workers for the festive season.

Australian Venue Co is offering $1000 food and drink vouchers and a $1000 referral bonus to help fill 2500 positions to cater for long-lead function bookings.

Article source: Queensland Property Investor

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