- The properties were developed by Far East Consortium.
- The sales come amid significant appetite for luxury hotels.
- Over $1.2B in hotels have been transacted across the first half of 2023.
A portfolio of The Ritz-Carlton Perth and The Ritz-Carlton Melbourne has been listed for sale.
Hong Kong’s Far East Consortium has moved to sell the properties amid heightened demand for trophy luxury hotel investment opportunities in Australia.
“The portfolio is positioned across two of the most sought after and resilient hotel investment markets in Australia, offering geographic and financial diversification,” said CBRE Hotels’ Michael Simpson, who with Tom Gibson, Aaron Desange and Vasso Zographou, and McVay Real Estate’s Dan McVay and Sam McVay will be steering the portfolio sale.
“The two hotels have set the benchmark for luxury hospitality in Australia and are well positioned to capture the leisure and corporate markets in Melbourne and Perth, supported by the strength of the globally recognised Ritz-Carlton brand,” added Simpson.
Opened pre- and post-pandemic
The hotels are operated by Marriot International’s pinnacle luxury brand, The Ritz-Carlton.
The Perth hotel was opened in 2019, marking the first Ritz Carlton in Australia in over 25 years.
It was developed alongside the Far East Consortium’s mixed-use apartment development, The Towers, and sits within the Elizabeth Quay precinct.
The riverfront hotel comprises 205 rooms, the Hearth Restaurant & Lounge, the Songbird Bar, a spa complex, an infinity pool, a fitness centre and event rooms.
More recently, the luxury brand opened its Melbourne doors in March 2023 and is touted as one of the highest hotels in the Southern Hemisphere.
The Melbourne property comprises a 550-seat ballroom, the Atria restaurant, bar and lounge areas, a swimming pool and fitness centre, a spa complex, event rooms and a Level 80 sky-lobby offering panoramic views.
It was developed as part of Far East Consortium’s West Side Place project, providing the city’s first Ritz-Carlton.
Booming demand for luxury
The sale campaign aligns with ongoing pent-up demand for hotel investment opportunities in Australia, with new CBRE data highlighting that over $1.2 billion in Australian hotel assets changed hands in H1 2023 – in line with the corresponding period last year and bucking the trend of declining sales in the office, industrial and retail sectors.
Dan McVay said, “Following years of substantial construction cost inflation, it is now unfeasible to develop world-leading, premium specification luxury hotels in Australia’s capital cities.”
“These Ritz-Carlton’s represent the pinnacle of Australia’s luxury hotel market and are unlikely to see new competition for the foreseeable future.”
The Expressions of Interest campaign will commence at the end of July 2023.
Post-Covid recovery well underway
The latest statistics from Tourism Research Australia, International and National Visitor Survey found that tourist spending in Western Australia has leapt well ahead of pre-Covid levels.
For the year ended March 2023, $15.9 billion was spent in the state, consistently rising from the pandemic low of $8.2 billion, and above the year ended December 2019 figure of $13.5 billion.
While dollars spent are above pre-Covid levels, international visitor numbers remain below December 2019 levels but continued to rise. December 2019 saw 996,000 visit Western Australia from overseas, with the pandemic low at 9,000; the latest numbers are 586,000.
Melbourne recorded similarly encouraging figures. Data from the National Visitor Survey for the year ending March 2023 found the overnight visitor expenditure estimates for Melbourne in 2019 was $8.7 billion, whereas 2023 sits at $11.3 billion, a 30% leap.
The state’s total (including regional Victoria) sits at $15.5 billion in 2019, and $22.3 billion for 2023, a 43% rise from pre-pandemic levels.
Visitors to Victoria saw a similar trend to WA, also recording a lower number post-Covid, but a strong recovery nonetheless. Regional Victoria sat at 6% above pre-Covid levels, with Melbourne sitting at 12% below pre-Covid. The total visitor estimates for Victoria were 27.8 million in 2019, with 2023 at 27.5 million, therefore sitting merely a single per cent below pre-Covid levels.
