The large-format Grosvenor Hotel on Melbourne’s outskirts has been listed, boasting a short-term tenant and big development opportunity.
The Grosvenor was built in 1860 as a coach stop for the Brighton Road pilgrimage, beside the new rail line connecting the area with inner Melbourne. The St Kilda pub was just one of 15 to spring up in the booming precinct at the time.
In the late 1920s major alterations were made in the Spanish mission style by architect Harry A. Norris, who became famous for helping establish Art Deco in Melbourne. The following decade saw many of the surrounding hotels close under the curse of the Great Depression.
In 2011 the pub was extensively renovated in a ‘cosy, industrial chic’ motif by Red Design Group, capitalising on the raw timber beams and high ceilings.
In 2014 publican Rabih Yanni took over, further expanding the offering, adding a drive-through burger bar to the existing cocktail bar and wine bar, bistro, private dining room, upstairs function room and drive-through bottleshop.
The Grosvenor occupies a generous 1,963sqm block zoned ‘residential compatible’, with triple street frontage, and while under a heritage overlay with the City of Port Philip, is not on the Heritage Register.
A private family is now divesting the freehold, with a 3-year lease in place to Yanni, pulling $525,000 annually in rent.
“The Grosvenor Hotel is a genuine ‘landmark’ hotel offering, with its dominating frontage to Brighton Road along with its envious position in the heart of beautiful Bayside Melbourne – without a doubt one of the premier hotel assets to come to market in 2018,” offers CBRE Hotels’ Will Connolly, who is marketing the asset in conjunction with Vinci Carbone.
The price expectation of $11 million represents a sub-five per cent yield, in a market that has recently seen local sales of the Marine Hotel for 3.3 per cent, and the Water Rat for 2.5 per cent returns.
The Grosvenor Hotel is being sold via Expressions of Interest, closing Thursday 3 May.
