UK's M&G acquires two Melbourne boutique hotels

Melbourne’s Deague family has sold the city's Olsen and Cullen hotels, which are managed under its wholly owned subsidiary Art Series Hotels, in a deal with British investment giant M&G Real Estate for $146 million.

Asian Pacific Group, the family’s property and hotel investment arm, sold the assets, located in Prahran and South Yarra, as it considers taking the hotel brand offshore. Pepper Property Advisory’s Christian McKelvey and Alex Edwards handled the off-market deal on behalf of Asian Pacific Group.

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


Still, Group CEO Will Deague insisted that the company was not selling the Art Series brand, and told The Australian that the company is in talks about sites in the UK and Los Angeles. “The sale comes at an opportune time in the Australian hotel market with record low yields," he told the paper. "We have committed to a very long lease back on all properties, which we will continue to develop and operate as normal.” Large-scale international investors are showing more interest in core hotel assets, the paper noted. Australian hotel numbers are rising, with Melbourne's overall RevPAR up almost 5 percent this year, according to CBRE, which predicted that prices for the area's hotels would continue appreciating. 

CBRE also noted that investor preferences for the hotel sector have increased from 1 percent in 2014 to 12 percent in 2015, but that investment appetite is shifting towards prime core assets.

The deal is M&G's first investment in the Australian hotels sector.

Suggested Articles

Many hotel owners will find themselves in the uncomfortable and unfamiliar position of deciding on a course of action for negotiating with their lende

For the week of Sept. 6-12, occupancy reached 48.5 percent, down 1.6 percent from the previous week.

Tisch joined Loews Hotels & Co in June 2017 from Loews Corp., where he was a VP.