Melbourne-based fund manager Salter Brothers has joined forces with Singaporean sovereign wealth fund GIC and Swiss-based global private equity firm Partners Group to acquire the Travelodge hotel portfolio from Mirvac and the NRMA for $620 million.
The acquisition of 11 Travelodge hotels and more than 2000 rooms makes it the biggest hotel real estate transaction in Australian history.
“We have done a lot of work on a domestic-only market with no international visitors coming in, and the view is that we have more than enough demand in Australia to support operating back at pre-COVID levels,” Salter Brothers managing director Paul Salter told AFR Weekend.
Looking at the Sydney market where many of the hotels are located, Salter said the “numbers were trending up”.
“What we were seeing prior to this lockdown was more than just green shoots,” he told the AFR.
Once settlement is finalised the hotels are expected to undergo a refurbishment while a new operator will also be sought.
Rahul Ghai, managing director of Private Real Estate, Partners Group, said they had been monitoring Australia’s hospitality sector over the last year for value-add opportunities created by the fall-out from Covid-19.
“This portfolio represents an excellent opportunity to acquire well-located assets and gain immediate scale in the sector at a discount to pre-pandemic prices,” he said.