Geelong motel fully booked as buyers eye accommodation boom
The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
A humble motel has become hot property in Geelong as the city navigates an accommodation shortfall.
The city’s Bay City Motel became the first motor inn to trade in Geelong for several years, drawing huge interest during the campaign.
Agents originally considered the best value in the prime 1215sq m property at 231-235 Malop St to be its development potential, but the level of inquiry from industry operators caused them to switch their marketing campaign.
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The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
CoreLogic has reported the freehold to the motel complex had sold for $4m, but the Advertiser understands the sale price taking into account the business was circa $5m.
Colliers, Geelong agent Chris Nanni said interest in the 18-room motel hit record levels for the agency, with 270 groups inquiring on the property.
“We were quickly blown away by the amount of inquiries we had from moteliers all around the country,” Mr Nanni said
“Owner-occupier motel operators, or stand-off motel operators who have got five, six motels under their belt, who get managers in to run them. That was a big surprise.”
Mr Nanni said the potential buyers could add value to the existing motel by creating extra rooms, repurposing the large residence on site or reshape the vacant restaurant.”
The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
The level of demand shouldn’t be a surprise, given the tourism industry regularly highlights the shortage of accommodation in Geelong.
“They’ve seen the need as there is a shortage and the demand and supply equation isn’t balanced,” Mr Nanni said.
“Particularly when you throw in the Spirit of Tasmania, the Commonwealth Games, and how this region is booming from a tourism point of view.
“That was attractive to existing motel operators because they had seen what had happened at their motel.”
Mr Nanni said the buyer already operated another motel in Geelong.
Bay City Motel has 18 standard, superior and deluxe rooms covering 674sq m of floorspace, plus a 50sq m restaurant (serving about 65 people), which has been vacant for about seven years.
The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
The Bay City Motel in Malop St, Geelong, attracted huge interest from accommodation industry players.
A four-bedroom manager’s quarters adds another 255sq m of floorspace used on the 1215sq m property.
The motel was built around 1984 and remained under the same ownership until this year’s sale.
Tourism Geelong and The Bellarine statistics show the region currently draws 2.3 million overnight visitors annual in a $1.1b industry.
The motel has annual turnover of more than $760,000 a year.
Mr Nanni said the sellers ran a tight ship, with two full-time employees (including the vendors) and three casual staff.
Hotel accommodation is become a more contested space in Geelong with a number of operators building or planning new establishments.
While Franze Development’s Holiday Inn is taking shape on Ryrie St, near the Quest Apartments in Gheringhap, other developers including Gurner and Amber Property Group have launched projects with key hotel components.
