The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
HotelRalph NicholsonFri 15 Sep 23

City Centre Pub on the Block in Melbourne

Hotel Sophia Hero

A rare freehold hotel with 96 rooms and a popular ground-floor bar has come to market in Melbourne’s centre.

Savills Australia has fielded more than 50 inquiries—many from abroad—in the first week of the sales campaign for the Hotel Sophia on the corner of King and Little Lonsdale streets.

Market analysts say the seven-storey hotel, which has been owned and operated by the same family for about 30 years, could sell for between $30 million and $35 million.

The original two-storey pub, known as The Golden Age, is believed to date back to the 1890s, but in recent years has undergone several major renovations, including the addition of three storeys, delivering a further 48-rooms.

Savills managing director for hotel capital markets Mark Durran said the expressions-of-interest campaign was attracting broad interest from local pub owners, hospitality providers, investment funds and institutional players in the hotel sector, as well as so-called boutique hostel operators.

“These boutique hostel operators tend to take over the mid-market-type hotel offerings and supercharge them, aiming for millennials with a lifestyle offering that is centred around a strongly performing bar or entertainment space,” he said

Durran said there had been inquiries from the UK, Europe, Singapore, Malaysia and Thailand.

The property had also attracted interest from high-net-worth individuals, who liked the freehold and vacant occupancy elements.

“That's pretty rare,” he said.

The Hotel Sophia in Central Melbourne.  The owners believe the lower floors date back to the 1890s.
▲ The Hotel Sophia in Central Melbourne. The owners believe the lower floors date back to the 1890s.

“Most offerings in Melbourne that come up these days are strata; say, a hotel that might be part of a mixed-use development. And that is obviously less sought-after than a nice freehold bit of land.

“It is a timely opportunity to capitalise on Melbourne’s tourism rebound.

“The vacant possession enables an operator to effectively rebrand and reposition the hotel asset.” 

The hotel is close to Melbourne’s commercial office precinct, as well as Marvel Stadium, the Melbourne Convention and Exhibition Centre and Southern Cross train station.

Savills executive Nikola Sasic told The Urban Developer the Melbourne hotel market had done well to absorb what had been “quite a lot of additional stock” during the past few years.

“It just shows that there is demand for accommodation in the Melbourne market,” he said.  “And the rates where they are now post-Covid is very encouraging.. 

“Given where construction costs have gone, I'd be surprised if a lot of those projects that were earmarked for development, those hotel projects, are still going to go ahead.

“So given that there's going to be reduced supply entering the market, these existing hotels are set to benefit from what seems to be a very strong accommodation market in Australia's second capital.”

One of the owners, Sarina Castan, said the family had been operating the hotel for 28 years.

“It's pretty hard work, especially after Covid,” she said.

“We were planning on selling it a few years ago but Covid delayed all that.  We were closed for exactly two years.

“Now it is time to try something new.”

HotelMelbourneAustraliaSector
AUTHOR
Ralph Nicholson
More articles by this author
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
The two towers, of 35 and 34 storeys, help cement the SA capital’s growing status as the best place in Australia for the…
LATEST
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
2 Min
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
3 Min
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
3 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/freehold-pub-in-melbourne-s-centre-on-the-block