A range of buyers such as private equity funds, family-run funds and syndicates, high net worth individuals and the veteran hoteliers are all likely to run the ruler over the Oaks.
McDonald said the sale of the Windsor Castle to Harvest Hotels highlights the market’s willingness to pursue assets underpinned by “robust trading fundamentals in key growth locations”.
JLL hotels managing director John Musca said unlike other asset classes that have seen the cost of debt slow market momentum, the hotel market has continued unabated with nearly $2 billion of capital flowing into the sector in the past 12 months.
This has seen a wide range of new buyers enter the market and the trend is expected to continue.
“The flight to scale is increasingly competitive from both institutional and private owners across the country, with levels of liquidity at unprecedented levels,” Musca said.
This has been reflected in recent deals such as the Smorgan family’s acquisition of the Continental Hotel in Sorrento, Victoria, the Fairfax family’s Sydney pub portfolio and ASX-listed Johns Lyng Group chief executive Scott Didier’s purchase of the Great Northern Hotel in Byron Bay.
“For those who accumulated wealth in mining, media, software, logistics or any other sector, once you finalize a business case, owning an iconic pub hotel in reality is far more fulfilling and exciting than any other form of investment,” Musca said.
Another deal concluded by Savills Hotels was the $22.5 million sale of the Lord Roberts at 64 Stanley Street, Darlinghurst. Owner Sue Cameron sold the freehold going concern of the “Lord Bob”, to Adam Macfarlane, who is a new entrant to the sector.
Savills Hotels’ Nick Butler, Selin Ince and Nick Lower said the sale price reflects the strength of the asset class, with city fringe hotels having enjoyed a measurable bounce back into profitable trading post-pandemic.