An abandoned and looted hotel in Melbourne’s St Kilda Road precinct has been listed for sale.
The former four-star Bayview on the Park hotel at 50-52 Queens Road has struggled through three city-wide lockdowns which crippled the city's accommodation industry, pushing occupancy as low 10 and 20 per cent across the year.
The 203-room hotel, normally filled during this period of the year due to global events such as the Formula One, has been closed since March last year as the country entered a nationwide lockdown.
Last year’s Australian Grand Prix was cancelled due to the global health crisis, while this year's has been postponed until November.
Bayview International Hotels & Resorts, a subsidiary of Malaysian conglomerate Oriental Holdings, decided to list the property as a potential development site given its prime location and almost 7000sq m landholding.
In January, videos by local youths uploaded to TikTok revealed the hotel to be in disrepair, with walls covered in graffiti and the drained swimming pool filled with rainwater, litter and dirt.
The images by looters showed that much of the hotel’s furniture, such as beds and tables, were still in the venue, while the elevators were still operating.
The vendors have enlisted JLL’s Josh Rutman, Peter Harper, Piers Jalland, and Nick Macfie to manage the campaign.
JLL head of investment sales Peter Harper, who will be joining The Urban Developer’s upcoming Hotel vSummit on Thursday, March 25, said the time was right for the vendor to go to market with this prominent site given the city was back in business.
“This divestment continues a trend we are seeing across Australia, and particularly in Melbourne, where hotels in prime locations that are nearing the end of their asset lifecycle are worth substantially more as alternative uses.
“Cbus and Gurner’s acquisitions of the Mercure Spring Street and Novotel St Kilda respectively for high-end residential redevelopment are two perfect example.”
Melbourne’s hotel market, where the recovery in “normal” demand has been weaker than other cities, has rebounded in recent months to be at its highest performance levels since early in the pandemic with occupancy lifting to 41 per cent and RevPAR at $61.35.
Hotel revenues fell 58 per cent in Melbourne in 2020, according to figures from analysts STR.
“In the current environment we are seeing more and more hotel owners come to us to better understand their options,” Harper said.
“In many cases alternative uses can be incredibly lucrative and reward their original decision to invest in assets with strong underlying fundamentals.
“We’re currently talking to owners about not only redevelopment but also adaptive re-use for BTR, residential and student accommodation.”
Separately, three Melbourne hotels managed by the Accor group have also hit the market in the first major hotel portfolio listing of the year.
Action Hotels Group, owned by Kuwait’s Sheikh Mubarak A.M. Al-Sabah, has put the hotel portfolio—comprising 575 rooms—up for sale with price expectations above $200 million in one line.
The campaign to sell the portfolio is being steered by Michael Simpson, Wayne Bunz and Scott Callow from CBRE Hotels.
