Developer Brady hoping for $150m for Melbourne's Voco hotel
Investor appetite for big city hotels will be put to the test this month after developer Brady Group put its new 252-room Voco Melbourne Central up for sale.
Price expectations are understood to be about $150 million for the yet-to-open high-rise hotel opposite Melbourne Central Shopping Centre. It forms part of 380 Melbourne, a $500 million apartment project developed by Brady Group featuring two towers of 52 and 68 levels behind a waved glass facade at 380 Lonsdale Street.
UK accommodation giant IHG Hotels & Resorts signed up to operate the hotel under its upscale Voco brand in 2018, and was originally meant to open the doors in July 2020.
However, Brady Group, headed by veteran developer Tony Brady, pushed back the opening as successive lockdowns hit Melbourne.
Featuring 252 guest rooms and suites, a restaurant and bar, conference and meeting space as well as a gymnasium and swimming pool, the Voco Melbourne Central is now scheduled to open at the end of April.
The offering of the Voco hotel will be buoyed by this week’s announcement that Australia’s international border will open to double-vaccinated travellers on February 21.
However, Melbourne also has the biggest hotel development pipeline in the country and in the past few years – despite the pandemic – has added a number of upscale and luxury hotels to its offering, including a W Hotel, Marriott and Hilton. Later this year, a Ritz-Carlton will open opposite Southern Cross Station.
Hotel portfolio
The last large hotel to sell in the Melbourne CBD was the 4.5-star Vibe Hotel Melbourne bought by Thailand’s Savetsomphob family for $108 million in July 2020.
In February last year, Kuwait’s Sheikh Mubarak AM Al-Sabah put his entire Australian hotel portfolio – three Melbourne hotels with 575 rooms, including the 347-room Novotel Melbourne South Wharf – up for sale with price expectations above $200 million.
While the Novotel has yet to find a buyer, at the economy end of the market, Sydney developer Eduard Litver snapped up the Ibis Budget hotel in the Melbourne CBD for $25 million this month.
Brady Group has appointed JLL Hotels & Hospitality Group’s Peter Harper and Nick MacFie to market the Voco Melbourne Central.
“The Melbourne hotel investment market remains widely sought after yet tightly held with very few institutional grade hotels transacting in the past decade,” Mr Harper said.
“This sale is the first large-scale CBD hotel offering since 2019.”
Mr MacFie said he expected strong interest from high-net-worth individuals, investment funds and private equity groups.
Voco Melbourne Central will be the brand’s flagship offering in Australia. The country’s first Voco at Surfers Paradise, on the Gold Coast, opened in 2018 and is owned by fund manager Salter Brothers.
