The Dava Hotel – 614 Esplanade, Mount Martha
The freehold interest in Mount Martha’s ‘Dava Hotel’ has changed hands following an international Public Tender campaign run by Stonebridge’s Rorey James, Nic Hage & Kevin Tong in conjunction with Ben Wilson from Wilson Property.
The sale marks the first time the beachfront hotel had been offered to the market in ~30 years and follows a string of Mornington Peninsula hotel transactions – notably the Rye Hotel which was reported to be acquired by Endeavor Group earlier this year for ~$50m.
The result of $15.75m reflected a yield of just 2.7%, an outcome which the selling agents said far exceeded the expected selling range.
Stonebridge Partner Rorey James said the market clearly resonated with the fundamentals of the asset, being a blue-chip investment with strong underlying land value. Adding that the 18 tenders received represent over $200m in active private capital looking for similar style assets in Victoria.
“We are in a cash rate sensitive market, particularly for assets in excess of $10m that typically require significant debt to purchase. To receive such extensive bidding depth, from a range of buyer profiles, was a terrific outcome. Furthermore, to have 6 offers reflect a yield sharper than 3% speaks volumes of the markets medium-long term confidence in the retail and hotel sector, particularly given the 12+ years of tenure remaining on the lease.”
Interest was received at a local, interstate and international level, with Stonebridge’s Asia Practice Partner Kevin Tong commenting that “44% of the bids received were from Asian based investors/land bankers, based locally and offshore. We also received bids from investors backed by Indonesian, Chinese and Singaporean capital which further highlights the confidence this buyer profile has in the Mornington Peninsula market.”
“A common theme amongst the private Asian investors was that there was less of a reliance on yield and a more aggressive weighting towards underlying land and their ability to pass down the asset through to their children in the future.”
Stonebridge have also just sold the Coles Supermarket in Hampton for $17.2m, trading at the same 2.7% yield as the Dava Hotel. They have recently listed another land bank opportunity along the Mornington Peninsula, located at 66-70 Mt Eliza way in Mt Eliza. It is scheduled to go auction on the 1st of December.