Plenary Hosts Partial Sale of South Wharf Hotel
Published 29 April 2011
Plenary Group is pleased to announce a partial sale of Hilton Melbourne South Wharf to Host Hotel and Resorts LP ("Host"), the largest lodgings real estate investment trust in the United States.
Mr John O'Rourke, Principal, Plenary Group said there had been strong interest in the hotel asset from a number of external investors.
"Having a global hotel investor like Host make its first Australian investment into the new Melbourne Convention Centre precinct is a great endorsement for the development", he said.
After its first full year of operations the hotel is enjoying exceptional occupancy on the back of strong convention and corporate demand.
Mr O'Rourke said that Host's 75% investment in the capital of the Hilton Melbourne South Wharf is invested on a preferred equity basis.
"This works well for Plenary as we can utilise the strong operating cash flows being delivered by Hilton to service the capital, whilst we retain a material stake in the asset and its long term upside, as the broader South Wharf precinct continues to mature", he said.
In December 2010, Plenary Group entered into a 50/50 joint venture with Colonial First State Retail Property Trust for all of the retail and car park development within South Wharf. This includes the restoration of the heritage riverfront cargo sheds that Plenary expects to open as a food and beverage precinct in the second half of 2011.
Mr O'Rourke said, "The new waterfront food and beverage offering would round out South Wharf and be another major attractor for all precinct visitors".