With Queensland hot, Lantern to offload Bundaberg hotel

(Bundaberg Queensland)

The northeast Australian state of Queensland continues to draw interest as investors test the waters.

ASX-listed Lantern Hotel Group, which operates a portfolio of hotels predominantly in New South Wales, is looking to offload the Central Hotel in Bundaberg, in Queensland.  

CBRE Hotels, which earlier this year issued a bullish outlook for the hotel industry, will market the hotel via an "Expressions of Interest" campaign, common in Australia and used to shortlist potential suppliers before then seeking detailed bids from the shortlisted tenderers.

The listing follows a spate of transaction activity for Lantern. The group recently placed the Cairns Courthouse Hotel on the market, in addition to transacting three hotel deals over the past nine months.

Lantern CEO John Osborne said the move to sell the Central Hotel in Bundaberg was in line with the firm’s strategy to divest non-core assets and focus on its NSW portfolio.

“The Central Hotel has been a passive investment for Lantern and is subsequently superfluous to our current business model,” he said.

The Central Hotel is being offered as a going concern, including both the business and property components.

CBRE Hotels Queensland Director Paul Frazer commented on the sale: “The hotel represents a fantastic opportunity for an owner operator to get a foothold in the local market, with the price point likely to attract a wide range of buyers.”

The hotel, located in the Bundaberg CBD, also includes gaming.

“We believe the market will see plenty of potential in the asset. The hotel’s underpinned trade allows for a foundation to be built upon and strategic CAPEX investment into areas such as the gaming room and the unused upper level of the hotel, will diversify the current mix of trade,” CBRE's Glenn Price said.

The Expression of Interest process will conclude on July 14th, 2016. A guidance price was not given.