ResortBrokers has sold the 28-key Spring Hill Terraces Motel & Apartments in the prime inner-Brisbane suburb of Spring Hill.

The freehold passive investment and leasehold were sold in one line for approximately $8 million, setting a record per-key price for an inner-city Brisbane motel at a sub-9% yield.

The property, comprising 21 rooms and seven self-contained townhouses, occupies a 1,672 sqm site along Water, Warry and Kennigo streets, approximately 1.5 km from Brisbane’s CBD.

“The amount of enquiries we received from developers and operators was unprecedented,” says ResortBrokers Managing Director Trudy Crooks, who transacted the sale with Brisbane broker Nathan Benjamin.

“The demand for short-term accommodation properties in Brisbane is greater than ever from purchasers and guests. With the challenges we’re seeing in the construction industry, astute purchasers understand new supply is a long time away. This will ensure the value of existing properties continues to grow year on year.”

Ms Crooks says the transaction is in line with the trend of freehold and leasehold amalgamation in motel sales.

“ResortBrokers is increasingly seeing motel freeholds being reunited with leaseholds for sale in one line,” says Ms Crooks. “In many cases, we are actively recommending to landlords and tenants that a unified sale will deliver better financial outcomes for both parties. Increasingly, landlords and tenants are taking up that recommendation once they see how the numbers stack up for them.”

“We recognised this was a rare opportunity,” says the purchaser. “Central Brisbane freeholds are tightly held and don’t come to market often, so we seized the opportunity. Brisbane is growing so fast, so we’re glad to have a foothold in its prime inner-city accommodation market.”

“This motel is well built, has a solid existing business and a prime location in the heart of Spring Hill near major hospitals. We saw value above the current trade, not as a development site, although it could be one, but we believe its best use for now is as short-term accommodation. In time, we will reposition the motel and apartments and streamline operations through digitisation.”

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