Why Byron Bay's Beach Hotel in Australia is worth $75 million

Beach Hotel

Melbourne businessman Max Twigg is set to sell Byron Bay’s Beach Hotel in Byron Bay, Australia, for more than $75 million, nearly 10 years after he acquired the property for just over $65 million. The beachfront hotel is officially leased until 2017 by Melbourne’s Van Haandel family and  carries two 10-year options to extend the lease.

“The national hotel investment market has seen a huge spike in values in the past couple of years with the continued low borrowing rate environment directly linking to capitalization rates,” Daniel Dragicevich, of CARE Hotels said, citing the sales of the the Prince of Wales in St. Kilda and the Golden Sheaf Hotel in Double Bay, Sydney. Dragicevich, Tony Bargwanna and Jared Hodge of Ray White Hotels, have been jointly appointed to sell the hotel.

The hotel's central location is expected to attract buyers, but the bigger attraction is the overall strength of Australia's tourism industry. The Byron region attracts more than 1.37 million visitors annually, with patterns spread throughout the year.


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“Byron Bay has become a more tightly held market within the last two years, and cash flow properties rarely become available,” Bargwanna said. “Recent developments in and around Byron Bay, such as Mercato on Byron, Seacliffs Byron Bay and West Byron Housing Development, have also boosted values.”

Source: The Australian


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The 160-room property features more than 5,000 square feet of meeting space, a bar, a fitness center, an indoor pool and a grab-and-go shop.

However, investors are heading into the new year with caution because performance is expected to dip, according to a JLL report.

The transaction, expected to be consummated in the first half of 2020, is still subject to regulatory approval and other closing conditions.