Looking to Victoria’s uber-hot investment market, the big block Marine Hotel freehold has returned to sale.
In April 2016, automotive entrepreneur Bobby Zagame sold the freehold investment of the Marine to a private investor for a cool $13 million, representing a tight 3.86 per cent yield.
As hotel sites around the country – particularly the eastern capitals – continue to attract widespread interest, amid shortage of opportunities and a lacklustre money market, the Marine is again up for grabs.
The landmark hotel occupies a 4,670 m² block with 128 metres of frontage to New and Park Streets, a short walk to Brighton Beach and its famous colourful ‘Beach Boxes’. It currently draws passive income of $641,540 with fixed annual rental increases, and five years remaining on the lease, plus options.
The Marine is being marketed by CBRE Hotels’ Mark Wizel and Will Connolly, who note the security of the well-established tenant for a “land bank” investor.
“A purchaser will be afforded significant capital upside once the property approaches vacant possession, whilst in the meantime securing a premium land banking opportunity with a highly desirable covenant firmly in place,” remarks Connolly.
The recent transaction of the Marine, with its 50 EGMs, saw it set new highs for gaming-based operations in Victoria. The sale coincided with the private investor acquisition of the freehold to Dixon Hospitality’s Imperial Hotel, selling for $8.61m at a super-sharp 2.38 per cent yield.
Connolly says that if anything the Victorian market has only gotten ‘hotter’ and with the median price for a residential property in desirable Brighton a lucrative $2.64 million, CBRE is already seeing a torrent of interest.
“We’re experiencing a multitude of buyer enquiries for the asset, which comes as no surprise given the prestige nature of the property and its premier location.”
The Marine Hotel is being offered for sale via an international Expressions of Interest campaign, closing Friday, 28 April.