Commodore fetches $17.5m

If there’s one place the booming resources and property sectors are coinciding it’s in the commercial property sector. And you only have to look at this week’s sale of the Commodore Hotel to prove the point.

The 117-room hotel on the corner of Hay Street and Victoria Avenue has increased almost three times in value in just two years, selling for $17.5 million compared with the $6.5 million purchase price in early 2004.

The result is testament to both an excellent strategic investment by Singaporean brothers Daniel and Richard Tan and their turnaround team led by Hotel Rescue and Design’s Tony Pallotta, which revamped the property with a spend upwards of $4.5 million.

Mr Pallotta said the owners’ faith in the site and his plan – to refurbish the hotel and then provide operational management – has earned the hotel a four-star rating, up from the 2.5-star operation that existed previously.

And the timing of this move could not be better. After a lean period of almost a decade, hotels in Perth are starting to enjoy better times, brought on by the resources boom and everything that comes with it.

“We are starting to see signs of improvement, Perth has stayed still for eight years,” Mr Pallotta said.

He said the rejuvenation of the  Victoria Avenue area was also benefiting the hotel, which has been bought by JF Meridian Trust, part of the James Fielding funds manag-ement operation.

Toga Hospitality has taken out a 20-year lease on the site to operate it as Travelodge Perth. It will embark on a further $2.1 million upgrade to create a 126-room hotel.

Travelodge was last located in Perth at 778 Hay Street, where the Holiday Inn is now.

The Tan brothers have other interests in Perth, including The Victoria building across the road from the hotel, which they bought for almost $4 million in 1995.

When the Tans bought the Commodore it had been split from its neighbouring site on the south side, which now houses St George Apartments, and Victoria Apartments on the corner of St Georges Terrace and Victoria Avenue.

The second site was bought for $8.3 million in 2000. Previously the two sites had been purchased as a single parcel by the previous owner, Lily Investments, for $21 million.

The Commodore sale bodes well for another group with strong Singaporean connections,

Avant Hotels Australia Pty Ltd, which has put the Crowne Plaza Hotel Perth on Terrace Road on the market. Avant bought the property in 1990 for $9 million.