Victoria’s Tudor Inn Hotel sold on a 3.79% yield setting a new national record for an ALH-tenanted investment. The CBRE Melbourne team of Nathan Mufale, David Minty, Scott Hawthorne, JJ Heng and Mathew George CBRE Hotels negotiated the $15,660,000 sale of the 1281 Nepean Highway, Cheltenham.

The on-market campaign generated a total of eight offers including three domestic and five international offers at the conclusion of the process.

An unconditional outcome and 90-day settlement were achieved as a result of the heightened competitive tension generated by the sale process.

Anchored by listed tenant Endeavour Group, the well-known Tudor Inn Hotel was offered with a seven year lease returning a net income of $592,855 per annum.

The improvements occupy a 4,789sqm landholding with 60 car spaces.

“The sale price of $15,660,000 is 32% above book value for the asset,” Mr Mufale said.

“To generate over $100 million in offers represents the increased weight of capital currently competing for blue chip assets in Melbourne’s commercial property market.”

Mr Heng added, “Large Activity Centre landholdings with income are highly sought after by international investors on long-term purchasing strategies.”

The sale of the Tudor Inn Hotel follows the divestment of a number of other ALH tenanted properties this year, all with the Endeavour Group as long-term tenants; but none of which has until now reached a sub 4% yield.

Sales in comparison to other ALH asset sales below: (source CBRE)

• Tudor Inn Hotel Cheltenham, VIC Aug-21 $15,660,000 - 3.79%
• Royal Exchange Hotel Toowong, QLD Aug-21 $14,050,000 - 4.01%
• Boundary Hotel Bentleigh East, VIC May-21 $33,000,000 - 4.23%
• Noosa Reef Hotel Noosa Heads, QLD Apr-21 $13,900,000 - 4.98%
• Kedron Park Hotel Kedron Park, QLD Mar-21 $4,600,000 - 4.98%
• Pelican Waters Tavern Pelican Waters, Calourndra, QLD Mar-21 $10,800,000 - 4.15%
• Edinburgh Castle Hotel Kedron, QLD Mar-21 $7,500,000 - 4.65%
• Morwell Hotel Morwell, VIC Mar-21 $3,060,000 - 4.74%

To request a sales analysis please email either of the CBRE selling agents via the below contact details.