Geocon has purchased Garema Centre for $13.35 million after a hotly contested expressions of interest campaign.
The Canberra-based developer has plans to deliver a $100 million "international standard" hotel at the 1,052 square metre site. Geocon owns and operates the Abode Group hotels.
Located at 70 Bunda Street, Canberra, Garema Centre is a standalone retail building with wide street frontage to Bunda Street and Garema Place. The site is zoned CZ1 which may allow additional uses – subject to approvals.
"The Chief Minister recently announced the ACT government was trying to attract high-end hotels to the city, to help accommodate record numbers of international visitors," Geocon managing director Nick Georgalis said.
"Anyone who travels regularly to Canberra knows there are times when you can't find a hotel room because there just isn't enough supply, particularly for the luxury market.
"The need for more visitor accommodation in Canberra is further evidenced by the fact that there are almost 5000 hotel-comparable room nights available monthly in Canberra on AirBnb."
Colliers International Manager Matthew Winter said the campaign attracted strong interest, recording the highest level of enquiry for a Colliers International listed building so far this year.
“Enquiries for 70 Bunda Street far exceeded that of 50 Bunda Street, with a more diverse group looking to secure the asset," he said.
“Unlike many assets offered for sale this year, the flexibility of the 70 Bunda Street site made it an attractive option to a very broad range of buyers. We saw significant interest from developers, investors, student accommodation providers, owner-occupiers and hoteliers."Garema Centre showed a net yield of 2.9 per cent based on the passing income.
The campaign attracted buyers from Canberra, Sydney, Brisbane and Melbourne.
“We saw significant enquiry from hoteliers, and it is not surprising considering the strength of the Canberra hotel market. Canberra hotels were the best performing in the country, with RevPAR up 12.8 percent, compared to Australia-wide which saw an increase of just 2 percent, June year-to- date," Winter said.
Geocon will now look to deliver an international standard hotel, brining a new hotel brand to the nation’s capital. Architects Fender Katsalidis will be working on the project.
Works are expected to commence in 2019 and with first guests welcomed in 2020.
