Brookfield hoping for $175m for Sofitel Brisbane
Canadian alternative asset manager Brookfield is having a fresh go at selling Brisbane’s biggest hotel, the 416-room Sofitel Brisbane Central, which has come to market with an asking price of around $175 million.
Spanning a large 7432sq m site at 249 Turbot Street above Central Station in the heart of the Brisbane CBD, the 30-storey complex includes the city’s largest conferencing centre and five food and beverage outlets. It was acquired by Brookfield as part of its $410 million takeover of listed hotel owner Thakral Holdings in 2012.
Since then, Brookfield has tried a number of times to sell the Accor-managed Sofitel Brisbane, alongside more successful divestments of other properties in the Thakral portfolio including the Sofitel Gold Coast and Novotel hotels in Wollongong and at Sydney’s Brighton Beach.
This time, Sofitel Brisbane is being offered for sale with the potential for vacant possession, allowing an incoming owner to refurbish and reposition the hotel and install a new brand and operator.
McVay Real Estate and CBRE Hotels are handling the international expressions of interest campaign on behalf of Brookfield.
Despite the divestment, Brookfield Asset Management, which owns and manages 156 hotels and 31,000 rooms as part of a US$264 billion ($423 billion) global real estate portfolio, has signalled its intentions to make fresh hotel acquisitions in Australia.
Speaking at a hotel conference in May, Ruban Kaneshamoorthy, Brookfield Asset Management head of real estate investing in Australia, said the alternative asset manager was looking to deploy funds in markets like Australia.
“On a global basis, Australia is one of the top five places people want to visit. There’s transparency, and we’ve got the economic tailwinds of the commodities cycle coming through,” Mr Kaneshamoorthy said.
Finding a buyer this time round for the Sofitel Brisbane may be assisted by Brisbane’s rising global destination status after securing the rights to host the 2032 Olympics and the strong demand for flagship luxury CBD hotels following the sale of the Hilton Sydney for a record $530 million to Hong Kong-based investment manager Baring Private Equity Asia and the KKR-led acquisition of the Sofitel Sydney Wentworth for $315 million in October last year.
Brisbane has been one of best performing capital city hotel markets since the onset of the pandemic. According to analysts STR, Brisbane recorded a 66 per cent average occupancy rate for the first eight months of 2022, higher than Sydney (59 per cent) and Melbourne (56 per cent).
On a revenue per available room (revPAR) basis – the key industry metric – a Brisbane hotel room is generating $134 a night, on par with Sydney ($138) where hotels have a much higher cost base, and significantly better than Melbourne ($117).
The last significant hotel deal in the Brisbane CBD was the 296-room Novotel Brisbane, which Thai investors sold for $67.9 million two years ago to a subsidiary of Singapore-based Amora Holdings.
Just outside the CBD, Syrian billionaire Ghassan Aboud purchased the Fantauzzo Hotel (now called the Crystalbrook Vincent Brisbane) beneath the Storey Bridge from the Deague family for between $70 and $75 million in September 2020.
Last September, Sydney’s hospitality kings Bill and Mario Gravanis paid about $50 million deal to buy the Oakwood apartment hotel at the entrance to the Storey Bridge from Singapore real estate giant Mapletree Investments.
