Two key overseas players have just exchanged a major Melbourne-based hotel asset for $96 million.
MA Financial, a global alternative asset manager, has acquired the Vibe Docklands from Singaporean real estate group Hiap Hoe Limited.
It has also announced that TFE Hotels will operate the property, currently the Docklands Four Points by Sheraton hotel, as the Vibe Docklands under the Vibe Hotels brand.
The hotel was built in 2018 and is located in Docklands’ north-west end with 273 guest rooms, conference spaces, a bar, bistro and cafe, a gym, outdoor pool and car spaces.
This will be MA Financial’s seed acquisition for its new open-ended MA Accommodation Hotel Fund giving investors a chance to invest in the accommodation hotel sector.
MA Financial alternative real estate investments managing director Anthony O’Hea will handle the portfolio for the fund.
“Hotels in Australia have seen a dramatic post-Covid recovery [in 2023], with hotel revenues in line with, or exceeding, pre-Covid levels despite international short-term visitor arrivals having only recovered to approximately 75 per cent of pre-Covid volumes,” O’Hea said.
“This combination of resilience, current asset pricing and the opportunity for further growth makes for a compelling investment proposition.”
MA Financial joint chief executive Julian Biggins said the timing was right for buying assets.
“We believe that the dislocation caused by the global pandemic, increased construction costs and the current macroeconomic conditions create a compelling opportunity to acquire accommodation hotel assets on very attractive terms,” Biggins said.
“This is expected to generate strong risk-adjusted returns for fund investors.
“Accommodation hotels fit perfectly within our specialisation as an alternative real estate asset manager, where we add value through identifying unique situations and actively managing assets for the benefit of investors.”
MA Financial wants to grow their portfolio of such assets to $1 billion and already have investments in hospitality, marinas and other alternative real estate assets.
Savills Australia and New Zealand capital markets team members Mark Durran and Nik Sasic handled the sale.
“Despite the high level of new supply additions of recent years Melbourne offered investors one of the strongest upside opportunities given Melbourne is nearing the end of the current development cycle with the large increases in construction costs over the past three years presenting major barriers to new hotel developments,” Durran said.
“Recovery in international visitation throughout 2024, Melbourne’s extensive events calendar, and corporate demand will all underpin demand growth this year.”
Nik Sasic said the hotel market was recovering.
“Melbourne’s Hotel Market continues to recover with RevPAR growth in the year to December 2023, 16.4 per cent above the prior year,” Sasic said.
“Melbourne has historically demonstrated its ability to soak up and absorb past new hotel openings and this market characteristic of resilience continues to provide confidence to investors,” Durran said.
BlackRock announced this year that it was purchasing global asset manager GIP with all its assets including the Sydney Airport, Port of Brisbane and Port of Melbourne.
