Fund manager Elanor hoping for $100m for Cradle Mountain Lodge

However, Elanor is confident of selling it for around $100 million given strong investor appetite for Tasmanian tourism assets amid a domestic leisure travel boom, and having already received unsolicited approaches to buy it.

Proceeds of the sale will be recycled by Elanor into other hotel assets on behalf of investors in the unlisted fund.

“After recently completing an extensive $10 million refurbishment program, we have received several off-market approaches by parties interested in acquiring Cradle Mountain Lodge, prompting us to formally take it to market,” said Marianne Ossovani, Elanor’s head of hotels, tourism and leisure.

Cradle Mountain Lodge – or the Pencil Pine Lodge as it was first known – opened in 1971 as accommodation for bushwalkers and fishermen after being built by brothers Alec and Ossie Ellis, Marcus Dunstan and Richard Ruddle on 800 acres of land they had acquired.

Around 30 cabins were added by owners Simon and Anne Currant in the mid-1980s, who also renamed it Cradle Mountain Lodge. In 1988, the couple sold the wilderness retreat to P&O Australian Resorts, which undertook an extensive expansion and redevelopment program.

In 2004, Cradle Mountain Lodge was acquired by ASX-listed fund manager GPT after it bought the P&O resort portfolio for $225 million. GPT operated it under its Voyages Hotels & Resorts portfolio.

In 2009 as part of the divestment of its tourism assets, GPT sold the lodge to Queensland businessman Michael McFie for $21 million. When Mr McFie’s hospitality empire collapsed following the GFC, an investor group led by Macquarie’s former head of real estate Bill Moss bought it from receivers for $25 million in 2011.

The lodge was then rolled into Mr Moss’ Elanor Investors Group, which floated in July 2014.

According to Elanor’s 2022 full-year results, Cradle Mountain Lodge (operated under Accor’s upmarket Peppers brand through a franchise agreement), delivered a return of 6.5 per cent. It is the second most valuable asset in the Elanor hotel fund, behind the 170-room Mayfair Hotel in Adelaide, which had a June book value of $87 million.

The lodge’s listing through Wayne Bunz of CBRE Hotels comes as Elanor works on a complex plan to delist its underperforming Retail Property Fund (ERF), which owns a $190 million portfolio of sub-regional and neighbourhood malls.

Offering both cabins and luxury suites, Cradle Mountain Lodge also includes a restaurant, bar and bistro as well as a spa and conference and event spaces.

An incoming owner can acquire the retreat with vacant possession.

Mr Bunz said he expected a high level of interest in Cradle Mountain Lodge given its “coveted global reputation” and the “high barriers to entry for new accommodation offerings in this exclusive World Heritage-listed location”.

“Opportunities to purchase once-in-a-generation assets like this are scarce, especially given the capital appreciation and proven income flow that will make this trophy asset even more attractive to investors,” he said.

Investments in Tasmanian hospitality assets over the last 12 months include Spirit Super acquired the Parliament Square mixed-use development in Hobart for around $330 million in December. The project includes two office buildings and a five-star hotel.