HOTEL heavyweight Australian Leisure & Hospitality Group, Coles and Sandalford Wines owner Peter Prendiville are among the big names understood to be circling the assets of Compass Hotel Group.
HOTEL heavyweight Australian Leisure & Hospitality Group, Coles and Sandalford Wines owner Peter Prendiville are among the big names understood to be circling the assets of Compass Hotel Group.
Compass went into receivership in March after struggling with big debts and this week its portfolio of 12 Perth hotels was listed with commercial agents Jones Lang LaSalle and CB Richard Ellis.
The properties include the iconic Albion Hotel in Cottesloe, the Kalamunda Hotel and the Carine Glades Tavern.
The hotels are being offered for sale as a portfolio and individually, and market analysts are expecting significant interest from local publicans and corporate investors.
JLL Hotels national director John Musca said Western Australia’s hotel market was the most tightly held in the country, and a very tough location to develop new licensed premises.
He said JLL had presented more than 90 offers for hotels from Compass Group’s portfolio during the past couple of years.
“There are a lot of people locally who are very keen to try and buy one or two of these hotels,” Mr Musca said.
“At the same time ... there are obviously a couple of groups who have made approaches to try and buy the whole portfolio of hotels.”
Mr Musca said WA had the lowest number of pubs per capita in the country and it was the hardest state to secure an approval for a new hotel or tavern, particularly for a new large format bottle shop or liquor store.
These unique market conditions meant Perth hotels occupied a special space in the hospitality scene, and with a small number of venues within a growing population he predicted these suburban venues would only get bigger and busier.
CBRE Hotels director David Kennedy said the last major hotel transaction in Perth was the sale of the Cottesloe Hotel in 2010, for $18 million to the Prendiville Group.
“We have had calls for the last three years from people saying if ever these hotels come back on the market, let us know,” Mr Kennedy told WA Business News.
“Because they were picked up pretty much in 2008, 12 hotels that was a big slice of our market, which virtually meant there has been very little product to sell for the past three years.”
One market analyst said Compass had paid top-of-the-market prices to build its portfolio of WA pubs and, in the current market, investors were quick to smell “blood in the water” and adjust their offer to suit.
The expression of interest campaign for the hotels will start in mid June and run until mid July.
Compass announced a half-year loss of $3.4 million in March, which it blamed on $5.1 million worth of asset value write-offs as a result of Perth’s weak property market.
