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In its latest move out of the Australian market, Hong Kong-listed Far East Consortium is selling off its Ritz-Carlton hotels in Melbourne and Perth, and could be sold at top dollar.
The portfolio, which is tipped to top $500 million, comprises 462 luxury hotel rooms managed by one of the world’s largest hotel operators, Marriott International, under its luxury brand, The Ritz-Carlton.
The sale of the properties is being handled by CBRE Hotels’ Michael Simpson, Tom Gibson, Aaron Desange and Vasso Zographou with McVay Real Estate’s Dan and Sam McVay, who also managed the recent sale of the Far East Consortium’s Gold Coast Sheraton Mirage.
“The portfolio is positioned across two of the most sought after and resilient hotel investment markets in Australia, offering geographic and financial diversification,” CBRE’s Michael Simpson said.
“The two hotels have set the benchmark for luxury hospitality in Australia and are well positioned to capture the leisure and corporate markets in Melbourne and Perth, supported by the strength of the globally recognised Ritz-Carlton brand.”
The Melbourne Ritz-Carlton opened its doors in March this year as part of Far East Consortium’s West Side Place project. It comprises 257 hotel rooms, a 550-seat ballroom, the Atria restaurant, and a sky lobby at Level 80.
The Ritz-Carlton in Perth opened in 2019 as the first Ritz-Carlton in Australia in more than 25 years and as the centrepiece of Far East Consortium’s mixed-use apartment development, The Towers.
It comprises 205 hotel rooms, the Hearth Restaurant and Lounge, the Songbird Bar, a spa complex, infinity pool, fitness centre and event rooms.
CBRE data shows Average Daily Rates (ADR)—a key hotel performance indicator—grew a record 23 per cent in the past 12 months, up 26 per cent on 2019 rates. And that has made the sector something of a hedge against inflation.
More than $1 billion in Australian hotel assets have transacted in the first half of 2023, including the Sheraton Grand Mirage Resort on the Gold Coast, which The Star and Far East Consortium owned.
The group acquired the Sheraton Mirage in 2017 for $140 million, and the Laundy and Karedis families recently acquired the 3.5ha Main Beach property for $192 million.
McVay Real Estate’s Dan McVay said the listing would align with ongoing pent-up demand for hotel investment opportunities in Australia.
“Following years of substantial construction cost inflation, it is now unfeasible to develop world-leading, premium specification luxury hotels in Australia’s capital cities,” McVay said.
“These Ritz-Carlton’s represent the pinnacle of Australia’s luxury hotel market and are unlikely to see new competition for the foreseeable future.”
Far East Consortium was greenlit for a commercial tower in Perth’s CBD City Link this year, and it also has a 25 per cent stake in the beleaguered Queen’s Wharf in Brisbane, which has suffered multiple setbacks to its construction program and completion.
