In Property by Clyde Mooney

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Redcape has completed the sale of its very large-format All Seasons Quality Hotel in Bendigo for around $24 million, completing a process begun before Moelis bought the balance of the portfolio in June.

Occupying 3.56 hectares on McIvor Highway in Bendigo, around 150 kilometres out of the Melbourne CBD, the All Seasons boasts bar and dining areas, wedding and function facilities and extensive amenities, gaming with 100 EGMs, and 77 four-star hotel rooms licensed under US-based Choice Hotels Group.

The Hotel and accommodation businesses are operated by an “experienced private hotelier” mid-way through a 15-year lease, with two further 15-year options. Rental income amounts to $1.56m, with fixed 3.75 per cent annual increases.

Buyer of the freehold interest is reportedly a “private sophisticated Melbourne investor” adding to an existing portfolio of privately-tenanted hotels.

The sale price of $24 million represents a strong 6.5 per cent yield, approaching that of blue-chip passive freeholds tenanted to ALH or Spirit Hotels, and a slightly better return than recent comparable retail investments in Geelong and Healesville, averaging around 5.2 per cent.

The property represents a significant land-bank in Bendigo’s city centre, commercially zoned with distinct arbitrage opportunity. It was marketed by JLL Hotels’ national director John Musca, and vice-president Mathew George.

“As the largest privately tenanted regional hotel investment sale on record the outcome is robust, evidencing not only the quality of the offer but the intense competition for the asset generated by a highly successful international sales process,” said Musca.