Funds and investment management group iProsperity Group (iPG) has closed on one of the most watched hotels deal in Australia, buying AccorInvest’s 23-hotel portfolio for $300 million.
The group, which has been actively growing its hotel business, snapped up the predominantly freehold portfolio of economy-style hotels which has more than 3000 rooms nationally.
As foreshadowed by The Australian Financial Review, iPG had been a frontrunner with other potential contenders for at least some of the assets including the likes of global fund manager BlackRock.
It is understood the deal with iPG closed in recent weeks.
AccorInvest, the hotel investment platform spun off by Paris-listed AccorHotels, listed the portfolio for sale last July. Fifteen of those hotels – all ibis-branded – were acquired from the Abu Dhabi Investment Authority for $200 million in December 2016.
The hotels are spread across major capital cities and regional areas and include the 412-room dual ibis Brisbane and Mercure Brisbane CBD hotels, the 296-room Novotel Brisbane, the 250-room ibis Melbourne Hotel, the 200-room ibis Sydney Airport and the 239-room Mercure Perth.
While AccorInvest’s decision to sell all its Australian hotels could be a signal investors believe Australian hotel values have peaked, it is understood iPG has a management and exit plan to operate the portfolio for several years before potentially selling them again.
The operating agreements with Accor will remain unchanged, sources indicate.
The Asian-backed iPG is a big player in the Significant Investor Visa scheme and has amassed a strong portfolio of commercial assets since bursting on to the scene several years ago.
Willing to recycle
High on its agenda is the growth of its hotels and hospitality arm.
It snagged Vanuatu’s casino-hotel resort Iririki Island Resort & Spa for about $30 million in July and is likely to tip in another $60 million for refurbishments and capital expenditure.
It also owns a controlling share of Aquis Entertainment Limited, the owner of Casino Canberra.
While iPG is an active buyer, it is also willing to recycle. The platform recently sold its Century City Walk Shopping Centre and the adjoining 200-room Novotel Melbourne hotel for a $150 million to a Chinese-backed buyer and Hobart’s MACq 01 Hotel to a syndicate for about $50 million.
It is also marketing the development-approved office tower at 333 Kent Street in the Sydney CBD.
The sale of the Australian portfolio still leaves the AccorInvest platform with more than 800 owned or leased hotels managed on long-term agreements of 30 to 50 years globally.
It remains the most dominant hotel operator in Australia after buying its biggest rival, Mantra Group, for $1.2 billion this year.
The AccorInvest sale comes as sales of hotels slow this year with fewer quality assets on offer.
JLL Hotels & Hospitality Group’s Craig Collins and Peter Harper steered the deal.
iPG declined to comment.