Action Hotels—an owner, developer and asset-manager of branded hotels in the Middle East and Australia—has secured a long-term, 92-year lease on a plot of land at the Melbourne Convention and Exhibition Centre for the development of a new four-star hotel, first announced in May.
The new hotel, which is expected to open in the first quarter of 2018, will have 317 rooms and 14 apartments, and will be the second-largest hotel in Action's portfolio. The hotel will be Action's fourth property in Australia and third in Melbourne. The approximate total project cost is $69 million, which Action will fund partially through a new-debt facility for the project and partially through existing resources.
The Melbourne Convention and Exhibition Centre is the largest convention center in the Southern hemisphere, and currently accommodates over 5,500 delegates. Last year, the venue hosted 1,030 events with more than 680,000 attendees, according to a report from JLL.
Hotel demand in Melbourne continues to outperform supply, underpinned by increases in both international and domestic tourism. Demand has increased by an average of 5.6 percent per year, and has contributed to a 4-percent growth per year in RevPAR between 2009 and 2015.
Hotel accommodation in the city is predominantly made up of upscale and upper upscale hotels, which make up 62 percent of the current supply.
Photo by Leonardo Patrizi