Tom Gibson, Vice President of JLL’s Hotels & Hospitality Group, together with Simon Rooney, Head of Retail Investments - Australasia for JLL, brokered the deal off-market.

The property includes a 304-room hotel operated by NEXT Story Group and a prime retail component occupying an envious location fronting Queen Street Mall in Brisbane CBD.

Simon Rooney, Head of Retail Investments for JLL, said ‘mixed-use CBD retail assets in prime locations are typically tightly-held and are in high demand nationally, demonstrated by two recent acquisitions – MLC Centre in Sydney (50%) for $800 million and 80 Collins Street in Melbourne for $1.476 billion – both acquired by Dexus. Locally, Marquette Properties recently acquired 130 Queen Street for approximately $77 million.

“The asset benefits from its location on one of the strongest retail strips in Australia. Retailers continue to seek locations which maximise foot traffic and exposure for their business which ultimately underpins tenant demand for super-prime retail strips and precincts, especially in CBD markets nationally.

See also: North Queensland Dunk Island for sale - Tom Gibson JLL

Andrew Quillfeldt, Senior Director of Retail Research for JLL, said, “CBD retail is one of the strongest performing retail sectors at present. It’s supported by positive underlying drivers such as strong residential population growth as a result of the last development cycle, strong white collar employment growth, strong tourism growth and key infrastructure upgrades in most markets. The combination of factors is driving retail spending and tenant demand within CBD markets.

Formerly known as Lennons Hotel Brisbane, the now edgy 4.5 star hotel is primed for growth with its close proximity to the $3.6 billion Queens Wharf Casino, the $2 billion Brisbane Live entertainment precinct and the recently opened $200 million Howard Smith Wharves project.

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“This is a timely acquisition for Salter Brothers to enter Brisbane as the market begins to mature with its record wave of private and public demand-supporting projects underway,” Mr Gibson said.

Brisbane is currently in the midst of a market repositioning, with over $12 billion worth of private and public infrastructure projects including a second runway, new cruise terminal and underground railway projects. Furthermore, with the addition of new and overdue luxury hotel product, such as the W Brisbane, Westin Brisbane, Calile James Street and Emporium South Bank, the market is establishing itself as a major global gateway city.

“With Sydney and Melbourne hotel markets becoming increasingly difficult to enter, we are receiving record interest for other core markets that feature attractive short- to medium-term market fundamentals, as evidenced by the recent liquidity seen in Brisbane and Perth,” Mr Gibson said.

For Year-To-Date through April 2019, the total number of room nights sold in Brisbane has increased by 3.5%, showing the market’s resilience through the addition of new supply.

Melbourne-based Salter Brothers is a global fund manager with a focus on specialist property, credit & private equity, including the ownership of multiple hotel assets in America and Australia. With the addition of NEXT Brisbane, Salter Brothers hotel portfolio now expands to over 2,400 rooms with seven hotels across Sydney, Melbourne, Canberra, Brisbane and the Gold Coast.

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