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6 July, 2023

Singapore based hotel group makes largest Melbourne hotel transaction in six years

Legend Land Melbourne, a subsidiary of Singapore’s Worldwide Hotels Group has dived headfirst into the Melbourne market, buying the city’s first dual-branded hotel.

The 472-room hotel located at 399 Little Lonsdale Street combines both Novotel and Ibis hotel brands and was sold for a cool $170 million by Well Smart Investment Holdings.

The property was finished in 2018 and used at the height of the pandemic to house COVID patients. It has since found favour with both budget and luxury markets as it offers 259 rooms at a lower price point through Ibis and higher points through four-star Novotel rooms on the higher floors.

The acquisition of the Novotel and Ibis Melbourne was negotiated by CBRE Hotels national director, Wayne Bunz, and represents the largest hotel transaction in Melbourne in more than six years.

“We have strong confidence in the Melbourne hotel market and its rapid recovery, given it is Australia’s most populated city and the nation’s events capital, which has consistently demonstrated its ability to absorb new supply,” Bunz, said.

“The market benefits from robust corporate visitation and tourist demand and boasts the country’s best cultural and sports calendar.

“The Melbourne transaction followed a strong recovery in the city’s hotel market, with Melbourne recording the country’s third highest revenue per available room (RevPAR) growth rate in the year to April 2023, growing by 54 per cent compared to the same period through 2022.

“Importantly, this recovery highlights the strong absorption of the ten hotels that have come online since the start of 2022 in Melbourne, largely supported by a continued recovery in domestic and international tourism”.

“While the city’s elevated, high-quality supply pipeline dampened investment levels over 2021 and 2022, Melbourne is now showing its ability to absorb this new room supply, which is expected to underpin growing investor interest in the market as the year progresses.”

Worldwide Hotels Group has also announced the acquirement of the Parkroyal on Kitchener Road, Singapore for USD $388 million (roughly AUD $593 million), the largest ever single-asset hotel transaction ever in Singapore.

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Ibis Melbourne Legend Land Melbourne Novotel Melbourne Wayne Bunz Worldwide Hotels Group