French giant buys Sydney Olympic Park hotels
French giant AXA Investment Managers-Real Assets has forged into the local hotel market, buying a four-strong portfolio in Sydney and Canberra for $330.4 million.
The purchase, backed by the group’s insurance arm, was made from Middle Eastern sovereign group Abu Dhabi Investment Authority, which carved the hotels out a $900 million portfolio it picked up in 2013.
The purchase, flagged by The Australian in September last year, will result in the French group taking ownership of the 831-room Australian hotel portfolio.
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“This transaction presents a rare opportunity to invest in a portfolio of high-quality and extremely well-located hotels as well as to build on our team’s strong track record of hotel investments,” AXA IM-Real Assets head of Australia Kumar Kalyanakumar says.
“While these assets already offer strong fundamentals in their own right, they are also set to benefit greatly from a number of value-adding initiatives we have earmarked which will be further enhanced by a forecast growth in tourism and a number of transport infrastructure improvements in Canberra and western Sydney.”
The acquisition, brokered by Savills and JLL, was the largest hotel transaction in the nation over the past 12 months. The portfolio spans four hotels — three in the Sydney Olympic Park precinct and one in Canberra’s CBD.
They consist of the Pullman Sydney Olympic Park, which has 218 rooms, the Novotel Sydney Olympic Park, with 177 rooms, and the Ibis Sydney Olympic Park, which has 150 rooms. The Novotel Canberra, with 286 rooms, was also part of the deal.
The three hotels in the Sydney Olympic Park precinct sit together. AXA IM-Real Assets believes their proximity, along with their diversified product offering across three brands, provides a unique opportunity to create value via “strategic asset management initiatives”.
While these assets already offer strong fundamentals in their own right, they are also set to benefit greatly from a number of value-adding initiatives we have earmarked which will be further enhanced by a forecast growth in tourism and a number of transport infrastructure improvements in Canberra and western Sydney
The entire Olympic Park hotel portfolio, developed for the 2000 Olympic Games, is operated by French hotel giant Accor under a 50-year management agreement.
The former Sydney Olympics site is a top events precinct, which played host to 10.5 million visitors and more than 5500 events in the last financial year.
The hotels are leveraged to events held at the three major stadiums, ANZ Stadium and the Spotless and Qudos stadiums.
AXA IM-Real Assets also pointed to the strong economic, residential and employee population growth in western Sydney as driving the area.
The precinct is also set to benefit from major infrastructure projects under the NSW government’s recently released Three Cities Plan, which aims to bring 47,000 jobs to the area.
The Novotel Canberra is one of the city’s best performers.
The sale by the Abu Dhabi sovereign wealth fund showed its willingness to capitalise on the top of the hotel investment cycle after it restructured key elements of the former TAHL portfolio.
AXA IM-Real Assets already runs a €2.3 billion ($3.65 billion) portfolio worldwide for its clients. The hotels in the portfolio are mainly operated by leading brands.
– with Lisa Allen
This article originally appeared on www.theaustralian.com.au/property.
