The Beach Hotel in Byron Bay is expected to be bought for more than $100 million by Moelis Australia.
The ASX-listed company confirmed that it intends to pay “slightly above $100 million” for the pub at 2-10 Bay Street in the popular tourist town, pending finalisation of the sale and purchase agreements, in an update to shareholders issued on Monday morning.
The fund, which currently manages $4.7 billion of assets, including the Redcape Hotel Group, will hold the property in a single asset investment fund, according to the update.
Funds manager Impact Investment paid $70 million for the 4585-square-metre freehold asset, which includes 25 boutique hotel suites, retail and food and beverage areas, in 2017.
Impact partnered with current operators John and Lisa van Haandel, who have managed the property since 2007, to sell the property along with the operating rights, following “several off market approaches”, according to listing agent John Musca, director of JLL Hotels.
“This was the first time in decades that a buyer had the chance to secure both the hotel business, and this iconic property in a stunning location,” Mr Musca said.
Mr Musca said that the campaign drew more than 100 enquiries from domestic and international parties – many lured by the opportunity to purchase in an internationally recognised tourism hotspot.
Four bidders were shortlisted following the conclusion of the campaign last week, with Moelis the preferred bidder.
The expressions of interest process was subject to strict conditions, including the continuation of a long-term moratorium on poker machines at the venue, some staff retention and the new owner being “a reputable long-term industry employer”.
“Understanding a buyer’s vision for the site and their community empathies are very important to us. The leading buyer’s acquisition proposal includes consideration of what locals and the 14,000 daily visitors to Byron Bay really want from the hotel,” said Impact Investment Group’s head of real estate funds management Darren Brusnahan.
Moelis confirmed that it intended to retain “the majority of the existing management operations and venue staff” in its ASX update. The venue will be managed by Moelis Australia Hotel Management.
The fund also confirmed that it intends to embark on a capital improvements program at the property.
“The Beach Hotel Byron Bay is an iconic Australian establishment located on irreplaceable real estate,” Moelis Australia Hotel Management’s chief executive Dan Brady said.
“The acquisition of both freehold and operating interests will enable the required capital investment to further enhance what has made the hotel iconic – that is, a great community gathering place with a fun, sociable, friendly and safe hospitality offering delivered by an engage [sic] and passionate team of local hospitality professionals.”
The deal is expected to be finalised within the next two weeks.
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