An ASX-listed fund manager has acquired two motel properties in Western Australia’s Pilbara region, in a $27 million deal brokered by leading independent commercial agency Cygnet West.

Located in the heart of iron ore outpost South Hedland, the South Hedland Motel and The Lodge Motel comprise around 240 rooms, while the South Hedland Motel has the capacity to expand to incorporate a further 40 rooms.

Cygnet West Head of Agency Ian Mickle said the properties, which are located around 300 metres apart, had been run as a standard motel operation as well as mining workforce accommodation.

Mr Mickle said the ASX-listed GDI Property Group acquired the properties in a joint venture with Tulla Group, as part of a wider strategy to leverage investment opportunities in mining accommodation.

Over the past 15 years, the motels have collectively generated an average EBITDA of around $6.7 million, with EBITDA in FY22 coming in at $9.7 million, according to ASX announcements.

GDI expects earnings for FY23 are expected to come in 25 per cent higher than FY22.

Mr Mickle said Cygnet West’s marketing campaign sparked significant interest from a wide range of prospective purchasers.

“Income-producing mining accommodation facilities in the Pilbara have historically been an extremely tightly-held asset class,” Mr Mickle said.

“We received high levels of enquiry from local private investors, as well as national and international institutional fund managers seeking to capitalise on a fairly unique opportunity.”

The transaction settled on April 19, reflecting a price of approximately $111,000 per key.