One of Sydney’s most famous backpackers has been bought by the family behind the international Wake Up! hostel chain.
The Millett family paid more than $18 million for the four-storey Bondi Backpackers building on Campbell Parade, located directly opposite the iconic beach, after it passed in at auction on Thursday night.
The family emerged late in the piece with a bid of $16.8 million, after a slow start from the opening bid of $15 million.
They then battled it out with one other buyer until the property passed in on their bid of $17.8 million, more than 20 minutes after the auction commenced.
The site enjoys prime views of Australia’s most iconic beach. Photo: Supplied
Half an hour of negotiations then took place between the seller, George Verebes, and the Millett family, overseen by listing agent Craig Pontey, of Ray White Double Bay.
Mr Pontey confirmed that the final sale price was more than $18 million and reflected a yield of just under 4.3 per cent.
Christian Millett, who watched on as his father, Warren, bid for the property later confirmed that they had paid $18.25 million for the site, with location being the key driver behind the decision.
“This site is prime for a Wake Up!. Bondi is craving a quality product,” he said.
Mr Millett said that the family expects the property to be “eventually” be converted into a Wake Up! product, giving a time frame of around two years.
There had been speculation before the auction that the hotel building would fetch for more than the former Bates Milk Bar site, a few doors away, which sold two months ago for $19.2 million.
Mr Pontey said that he had received more than 250 inquiries on the backpackers property and conducted 65 inspections.
“It just goes to show how strong the Bondi market is,” he said.
The family’s The Millett Group currently operates the Wake Up! hostel opposite Central Station, opened in 2002, and has franchised the brand in Copenhagen, Denmark.
The Wake Up! brand is positioned as a premium hostel chain.
In 2014 the family spent $16.2 million to purchase Tomassetti House in Melbourne’s CBD, with plans to eventually convert it into a Wake Up! hostel.
The family also operates the Mill House bar and restaurant on the ground floor of Tomassetti House and the Lord Byron Resort in Byron Bay.
Before the sale Mr Pontey had said there was plenty of potential to improve upon the $1,364,989 a year being generated by the 52-room, 138-bed backpacker business, and the Bavarian Bier cafe and Backpacker World Travel leases downstairs.
He had also received interest from hotel operators and developers – although restrictions on parking would have limited development returns.
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