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News Originally posted at afr.com

Schwartz family takes $80m Melbourne portfolio to market

September 13, 2017

The Schwartz family's $80m portfolio is being brought to market at a time of strong appetite for CBD commercial property and hospitality assets. Photo: Supplied

Melbourne’s high-powered Schwartz family have tipped an $80 million portfolio of Melbourne CBD assets onto the market, including the city’s oldest licensed pub.

The portfolio comprises the 65-room Adina Hotel, a car park, IGA supermarket and other laneway properties at 88 Flinders Street and the 167-year-old Duke of Wellington pub and an adjoining nine-level office tower at 2 Russell Street, opposite Federation Square.

The vendors are the brothers Morry Schwartz, who founded developer Pan Urban and publishing house Black Inc, Alan Schwartz, a director at mezzanine financier Qualitas and married to Stockland director Carol Schwartz (the daughter of retail billionaire Marc Besen), and developer Danny Schwartz.

The three brothers inherited the portfolio from their late parents, the renowned developer Andor Schwartz, who passed away in 2014, and his wife Margaret, who died in June.

Andor Schwartz developed what is now the TFE Hotels-operated Adina Hotel in 2001. The property includes a substantial rear parcel of land connecting to Flinders Lane and Duckboard Lane and a warehouse property home to popular whisky bar, Eau Du Vie.

In 2003, the family acquired the Duke of Wellington for $4.5 million, later added the office tower and recently upgraded the multi-level pub, operated by Dixon Hospitality. The pub has stood on the corner of Flinders and Russell streets since 1850 and operated as a licensed venue since 1853.

The portfolio is being brought to market by CBRE Melbourne’s Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai in partnership with Rob Cross and Scott Callow of CBRE Hotels at a time of strong appetite for CBD commercial property and hospitality assets.

Expecting plenty of interest

Recent nearby sales include a multi-storey car park and office at 114 Flinders Street sold to a Hong Kong investment group HK Realway for about $120 million on a 5 per cent yield, while numerous hotels and pubs have changed hands in Melbourne this year.

“Melbourne has become a truly international city and this has seen a major uplift in investor demand for mixed use assets, particularly with hotel components which can take full advantage of the current tourism boom that we are experiencing,” said Mr Rutman.

“We expect to see a great deal of local and offshore interest for the assets, especially given the scale and quality provided by the portfolio.”

Mr Wizel said CBRE was currently dealing with several offshore purchasers, mostly based in Asia, who are interested in acquiring mixed real estate assets, similar to those that they own in their domestic markets.

“These properties would certainly fit into this category, and based on our recent experience with a property in the precinct, we expect particularly strong interest to come from mainland China, Hong Kong, Indonesia and Singapore,” he said.

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