Ultra-high net worth Australians and offshore investors are expected to bid for Ritz-Carlton hotels in Perth and Melbourne, after Hong Kong-listed developer Far East Consortium put them on the market with price expectations of about $500 million.
The offering of the Marriott-operated luxury hotel portfolio comes less than four months after the highly anticipated 257-room Ritz-Carlton Melbourne finally opened its doors, atop the tallest tower in FEC’s $2.4 billion West Side Place development at 250 Spencer Street.
Hong Kong’s Far East Consortium is selling its prestigious Ritz-Carlton Melbourne hotel.
The opening of the hotel, which occupies the top 17 floors of the 80-storey skyscraper, marked the entrance of the Ritz-Carlton brand in Melbourne.
The 205-room Ritz-Carlton Perth opened at Elizabeth Quay in 2019 and marked the return of Marriott’s most famous luxury brand to Australia after an absence of 25 years.
“The exercise to sell the Ritz-Carlton hotels in Australia is for capital recycling and it is consistent with our stated group’s strategy,” a spokeswoman for FEC said.
“We have our own hotel brand, which is called Dorsett Hotels, and we have recently opened in both Melbourne and the Gold Coast.”
The offering of the two luxury accommodation palaces comes amid strong institutional investor demand for luxury and upscale hotels on the back of a domestic-led tourism boom including the record sale this week of the Sofitel Adelaide for $154 million to fund manager Salter Brothers,
Other noteworthy sales include Andrew and Nicola Forrest’s purchase of the yet-to-build Waldorf Astoria in Sydney for $520 million, the $192 million acquisition of the Sheraton Grand Mirage on the Gold Coast by Rich Listers the Laundys and Karedis families (a property 25 per cent owned by FEC), and Singapore’s Worldwide Hotels Group buying the dual-branded Novotel and Ibis Melbourne Central Hotel in the Melbourne CBD for $170 million.
Hotel heiress Winnie Chiu came to Melbourne for the opening of the Ritz-Carlton in March. Eamon Gallagher
New data from CBRE, who are co-selling agents of the two Ritz-Carlton hotels alongside McVay Real Estate, tallied over $1.2 billion in Australian hotel assets changing hands over the first half of 2023 – in line with the corresponding period last year, and bucking the trend of declining sales in the office, industrial and retail sectors.
While the decision by FEC, which is controlled by the billionaire Chiu family, to list the newly opened Ritz-Carlton Melbourne appears hasty, given it has yet to establish a trading record, co-selling agent Michael Simpson from CBRE Hotels said the hotel was already the “rate leader” in its market.
He pointed to examples of other hotel sales, including Andrew and Nicola Forrest’s $520 million purchase of Sydney’s yet-to-be-built Waldorf Astoria this year (as well as sales of the W Melbourne and Sofitel Sydney Darling Harbour) to highlight an established trading record is not a prerequisite to a strong sales outcome.
He said he expected interest in the Ritz-Carltons to come from the local investor market as well as a “very high amount of international competition” for these “Asian-style luxury hotels”.
The Ritz-Carlton Perth is also on the market.
Mr Simpson, his CBRE Hotels colleagues Tom Gibson, Aaron Desange and Vasso Zographou, and McVay Real Estate’s Dan McVay and Sam McVay, have been appointed to steer the portfolio sale.
Officially opened on March 23, the Ritz-Carlton Melbourne includes a 550-seat ballroom, the upmarket Atria restaurant, bar and lounge areas, a swimming pool and fitness centre, spa complex, event rooms and a Level 80 sky-lobby offering panoramic views of the city.
The Ritz-Carlton Perth, which anchors FEC’s mixed-use apartment development The Towers. includes the Hearth restaurant and lounge, the Songbird Bar, a spa complex, infinity pool, fitness centre and event rooms.
Co-selling agent Dan McVay said the two Ritz-Carltons represented the “pinnacle of Australia’s luxury hotel market”.
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